Chancellor Signs Off £11.5bn Spending Cuts

Chancellor George Osborne has reached agreement with Cabinet colleagues over the extent of cuts to their budgets for the year after the next general election.

The Treasury said the new agreements among government departments would produce savings of £11.5bn.

A spokesman said: "We've completed the spending round savings early and without all the arguments you normally get. This shows our determination to take the tough decisions needed to deliver our economic plan and to turn Britain around."

Sky News political correspondent Sophy Ridge said the sign-off would come as a "huge relief" for the Chancellor.

"I'm not completely convinced by the Treasury's argument that there were no rows over this spending settlement," she said.

"For example, Defence Secretary Philip Hammond and Business Secretary Vince Cable were pretty late in signing off cuts to their budgets so I think there was clearly concern among some Cabinet ministers.

"But at the same time this is a clear win for the Chancellor and I think he will be pretty relieved to have had it signed off at all."

Mr Osborne indicated there would be further cuts in the number of civilians employed at the Ministry of Defence, but no further reduction in military manpower under the settlement agreed with Mr Hammond.

There will be no reduction in military manpower under the settlement

He also promised £10m a year to help uphold the military covenant and to spend more money on cyber warfare.

Before the 2010 election Prime Minister David Cameron pledged to protect universal pensioner benefits such as bus passes and winter fuel allowance for the duration of the Parliament.

But Mr Osborne would not commit to funding pensioner benefits beyond the 2015 poll, acknowledging "we have got to look at how we can afford them".

Mr Cable was understood to be holding out until he was sure that he had reached a settlement which would safeguard measures to boost growth.

Shadow chancellor Ed Balls said he would adopt Mr Osborne's day-to-day spending limits for 2015-16 if his party wins the election, but indicated that a Labour government could borrow more to pay for infrastructure investment.

"If George Osborne had done that last year or the year before, we wouldn't have had such a flatlining economy," he told the BBC.

"I think he is so complacent and out of touch, I'm not going to make the same mistake."

Mr Osborne will announce the details of the Whitehall cuts in the Government's spending review on Wednesday, in which he will also reveal plans for an infrastructure plan using savings to invest in roads, railways, education and science.

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