I was in the House of Commons today to hear George Osborne deliver the Government's spending review. His statement set out a four year strategy to wipe out Britain's annual budget deficit and get on top of the country's debts.
The last Government had run out of money, and knew that cuts would have to be made. They had even planned for reductions of, on average, 20% across Government departments, but had not allocated a single penny of where those cuts would need to be made.
In the Budget in June, George Osborne had warned that because of the terrible state of Britain's finances that cuts might need to be up to 25% across the Government, but today because of the progress that has already been made in cutting costs and inefficiencies he was able to announce that the cuts will be 19% on average over the four year period - so just below 5% a year for four years. This is of course 6% lower than previously predicted and lower than the 20% cuts the last Labour had expected they would have to make.
Reforms to help save money and improve the efficiency of services are being made right across Government. 192 Quangos are being abolished, and a further 118 merged. Welfare reform will save £7 billion and ensure that people are always better off in work than on benefits and that the typical household supported by people in work should never be worse off than a household where no-one is working.
There had been concerns about some cuts in services and benefits raised during the election campaign and George Osborne was able to reasure people on these points.
Sure Start will remain a universal service and to support early years education every 3 and 4 year old will be entitled to 15 hours of free education a week.
The temporary increase made by Labour in the cold weather payment has been made permanent.
We will also keep the universal benefits for pensioners, in recognition of the fact many have worked hard and saved all their lives; free eye tests; free prescription charges; free bus passes; free TV licenses for the over 75s; and Winter Fuel Payments will remain exactly as budgeted for by the previous Government.
For Equitable Life policy holders George Osborne announced a payments scheme worth £1.5billion, which was around four times greater than that which had been proposed by the ombudsman. Those who had With Profits Annuities were particularly hard hit, as they were retired and were unable to move their savings elsewhere. As a result, the Government will cover the cost of the total relative loss they suffered.
I was also pleased to note that the Department for the Environment is maintaining its spending on investment in coastal and flood defences, which are vital in particular to people living along the coast and Romney Marsh.
There will be much debate about the spending review, but I believe that it got the balance right between the need to reduce the country's debts, reforming public services and being fair to people who need the support of the Government most.