George Osborne signals spending cuts for next seven years …
The chancellor, George Osborne1, warned on Monday that austerity2 may continue until 2020 as he set out plans for a new fiscal mandate that will require further welfare3 cuts to build an overall budget surplus by the end of the next parliament. In his keynote speech to the Conservative party conference in Manchester, he said the budget surplus, a post-war rarity for UK governments, could be achieved without raising taxes, but added: “We have to confront the costs of modern government and cap working age welfare.” Osborne’s highly political move is designed to set out a fiscal target that Labour cannot match and refocus the public mind on the long-term battle to bring public spending under control territory that the Tories regard as their own.
In a speech that repeatedly reflected the Tories’ need to find a response to Labour leader Ed Miliband’s conference pledges last week, Osborne also set out plans to freeze petrol duty until after the election and blocked the planned 2p rise in fuel duty next September.
David Cameron will try to build on the voter-friendly promises on Tuesday by setting out plans for a radical shakeup of family doctor services by unveiling a 50m scheme to offer seven-day-a-week access to GP surgeries. In the largest reform of family doctor services in a decade, GP surgeries will be given extra resources to open from 8am to 8pm, and patients will be offered the chance of consultations through a Skype service. Tory strategists believe the commitment to a budget surplus will provide the biggest political dividends in the runup to the 2015 election.
Osborne said the twin fiscal mandate would be to achieve a budget surplus by the end of the parliament and to ensure capital spending grows at least in line with GDP. His officials said the two pledges could only be met by “extremely tight, sustained controls on departmental spending and by capping welfare through the parliament”. The budget deficit in 2013-14 is set to be 120bn and is forecast to fall to 43bn in 2017-18, so further cuts will be needed in the following three years.
Labour has so far only said that it will match coalition spending for 2015-16, but it would be a large ideological leap for it to embrace a budget surplus by the end of the next parliament, especially since the triple lock on pensions will see some welfare spending rise. The Tories presented their proposals as a break with the past, pointing out that the British government has only run a surplus in seven of the last 50 years and three of the last 20 years. Among G8 nations, only Germany is in surplus.
Setting out the virtues of balancing the books, Osborne said: “Never again should anyone doing my job be so foolish, so deluded, as to believe that they have abolished the age-old cycle of boom and bust. “So I can tell you today that when we’ve dealt with Labour’s deficit, we will have a surplus in good times as insurance against difficult times ahead. Provided the recovery is sustained, our goal is to achieve that surplus in the next parliament.
That will bear down on our debts and prepare us for the next rainy day.” Saying he was offering “a serious plan for a grown-up country”, he insisted: “This time we are going to run a surplus. This time we are going to fix the roof while the sun shines.”
Labour claimed Osborne had rebranded a new fiscal rule only after totally failing to meet what was in effect a similar set of deficit targets due to have been met by the end of this parliament.
Theresa May told conference: ‘If leaving the European convention is what it takes to fix our human rights laws, that is what we should do.’ Photograph: Phil Noble/Reuters
The new target is more stringent than the discarded ones in two respects: Osborne would not have the option of cutting capital spending faster than GDP growth and he would be required to reduce the national debt in cash terms rather than as a percentage of GDP. Battling to strike the right balance between optimism and complacency, Osborne said he was optimistic about the UK’s economic prospects, saying the “sun had started to rise above the hill” after years of recession and flat growth. But he said much more needed to be done to ensure improved living standards for this generation and the next and warned that family finances would not be “transformed overnight”.
“There is no feeling at the conference of a task completed or a victory won,” he said. “The battle for turning Britain round is not even close to being over.” Cameron will announce that GP practices in nine regions across England will be eligible to participate in a 50m scheme to enable them to test out a series of initiatives to ease patient access to GPs5. The scheme will be rolled out across the country after the general election if the pilot schemes are successful.
The changes are modelled on a scheme in the Greater Manchester area in which six GP practices have pooled services. Prescriptions will be issued electronically and patients will be allowed to visit doctors6 throughout their area. The scheme was brought in after it was revealed that almost a third of all patients’ trips to the city’s 17 hospitals were to emergency wards.
Cameron will say: “Millions of people find it hard to get an appointment to see their GP at a time that fits in with their work and family life. We want to support GPs to modernise their services so they can see patients from 8am to 8pm, seven days a week. We also want greater flexibility so people can speak to their family doctor on the phone, send them an email or even speak to them on Skype.”
Conservative sources confirmed that the 50m fund would in effect pay for about 50 surgeries, a level of funding that would require 8bn rolled out at this cost throughout England’s 8,000 GP practices. However, the government believes that the costs of creating a 24/7 “Tesco NHS” in general practice would be “much lower than that”. “This is a start-up cost and we will see who can deliver the service at the lowest cost and use that as a template,” said the source. “It’s always expensive in the beginning.”
The government’s analysis is that patients are going straight to A&E because they are unable to access their GP. The result is that hospitals become clogged up with patients, especially the elderly, with the average length of stay for those aged over 80 being more than 14 days. Jeremy Hunt, the health secretary, has announced that after taking greater control of the care of frail elderly patients from April 2014, GPs would be asked to offer more targeted care for those with long-term conditions from 2015.
Hunt was criticised recently by the Royal College of General Practitioners after he claimed that the GP contract, introduced in 2004, had so undermined the personal link between patients and doctors that many elderly people were better known to A&E staff. Dr Chaand Nagpaul, chair of the BMA’s GP committee, said: “GPs are always open to new ways of working that can benefit patients. For this to work, the government needs to address issues around GP numbers and support services.
Without extra GPs, the existing workforce will have to be stretched over seven days, meaning potentially reduced services during the week. It will also requireadditional resources and investment in support and diagnostic staff such as district nurses and access to community care so GPs can meaningfully provide a full service across the week, and it remains to be seen if the money set aside will be enough to deliver this. “The BMA will be interested in the results of this pilot and are committed to working with the government to improve access to care for patients, but the GPs across the country that we represent will need more detail on how it will work in reality, particularly when it comes to staffing and resources.”
Sarah Wollaston, a GP and Totnes MP, said a seven-day service was something “we must do”, although she conceded that it would be impossible without more family doctors and nurses.
In other announcements at the conference on Monday, the home secretary, Theresa May, said the party was prepared to withdraw from the European convention on human rights7 after the next election and detailed a fresh drive8 to curb the appeal rights of 70,000 people who face deportation each year.
- ^ More from guardian.co.uk on George Osborne (www.theguardian.com)
- ^ More from guardian.co.uk on Austerity (www.theguardian.com)
- ^ More from guardian.co.uk on Welfare (www.theguardian.com)
- ^ Video will start automatically on this page (www.theguardian.com)
- ^ More from guardian.co.uk on GPs (www.theguardian.com)
- ^ More from guardian.co.uk on Doctors (www.theguardian.com)
- ^ said the party was prepared to withdraw from the European convention on human rights (www.theguardian.com)
- ^ detailed a fresh drive (www.theguardian.com)
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George Osborne signals spending cuts for next seven years …