Chancellor George Osborne said he was determined to press ahead with the Government’s multi-billion programme of public spending cuts, declaring: “We have to see this through”.
Mr Osborne is expected to outline the most savage reductions in state spending since the Second World War when he unveils his Comprehensive Spending Review on Wednesday, slashing £83 billion from Whitehall budgets as he bids to eliminate the structural deficit within four years.
He said that the CSR would aim to squeeze welfare payments and Government waste as hard as possible, in order to preserve cash for healthcare, schools, early-years education and crucial infrastructure projects, like London’s Crossrail link, the proposed Mersey Gateway road bridge and the Diamond Synchrotron scientific facility in Oxfordshire.
Mr Osborne declined to discuss press reports that he will save billions by cutting thousands of police officers and abolishing Child Benefit for 16-19 year-olds, currently paid to teenagers who stay on in education or training.
He said: “The priority has been to target waste and welfare, to invest in our healthcare, to have real increases in our school budgets and to invest in the things that are going to make our economy strong...
“We have got to make some tough decisions but the priority is healthcare, children’s education, early years provision - particularly for some of our poorest - and the big infrastructure developments like Crossrail, Mersey Gateway, the synchrotron, broadband.
“Those things are actually going to get us out of this stronger and able to pay our way in the world.”
Mr Osborne was accused of “economic masochism” by shadow chancellor Alan Johnson, who said the coalition Government was planning to cut “too deeply and too quickly” and was risking a lengthy period of stagnation with the economy “bumping along the bottom”.
But the Chancellor insisted he would not shy away from the cuts he believes are necessary to avoid a crisis of confidence in Britain’s economy which could drive up interest rates.
“Our plan is the plan that will restore credibility to the public finances,” said Mr Osborne.
“It is what the IMF, the OECD, international observers say is necessary. It is what British business says is necessary.
“So we have to see this through, and the course which I set in the Budget is the one that we have to stick to.
“People in this country know we were on the brink of bankruptcy, and if we are going to have growth and jobs in the future we have got to move this country into a place where people can invest with confidence.”
Mr Osborne has been at the Prime Minister’s country residence Chequers, putting the final touches to the CSR statement in a meeting with David Cameron, Deputy Prime Minister Nick Clegg and Chief Treasury Secretary Danny Alexander.
After weeks of tough negotiations with spending ministers and a semi-public spat with Defence Secretary Liam Fox over the budget for the armed forces, Mr Osborne said that the settlement was now “complete”.