Comprehensive Spending Review

9.49.00am BST (GMT +0100) Wed 10th Oct 2007

Alistair Darling [© Crown Copyright 2005]

Commenting on the pre-budget report and Comprehensive Spending Review, Liberal Democrat Shadow Chancellor and Deputy Leader, Vince Cable MP said "Today's announcement of falling growth and the tightest spending round in a decade is the result of ten years of neglect by Gordon Brown. For too long The Prime Minister callously disregarded the mounting problem of personal debt, fuelled by irresponsible lending. With households now facing 160% income to debt ratios and spending a fifth of their income servicing existing debts, it has become inevitable that spending and growth will fall."

Commenting on the Chancellor's tax proposals Dr Cable said The Liberal Democrats have long called for action on non-domiciled individuals and welcome any proposal which ensures they pay their fair share of tax. However, it is peculiar that after criticising the Conservatives for an unworkable charge on non-doms, the Chancellor has opted for the exact same thing. Surely it makes greater sense to tax these individuals as UK citizens after a set period of time. Today's Inheritance Tax proposals will be a great relief to many married couples who wish to transfer their house to their children. However this does nothing for the many families who have separated or chose not to enter into a marriage or civil partnership."

Commenting on the Chancellor's spending proposals, Dr Cable said With a crushing spending squeeze on local government it seems inevitable that Council Tax will rise by as much as 5% each year. This will mean that Council Tax will have more than doubled since Labour came to power. This unfair tax must be abolished and replaced with a tax based on an individual's ability to pay. Health spending growth is halving and doesn't even reach the 4.4% requirement recommended by Sir Derek Wanless of the minimum amount of spending necessary to improve health services. This announcement was intended to be a statement of political bribery, but with no election it has had to pay heed to economic reality; with an economy heading for turmoil and a squeeze on spending which will damage our public services. The Government has ducked the tough choices which needed to be made on public spending, rather than cutting wasteful projects such as ID cards, Child Trust Funds and the NHS IT Scheme and reallocating the money saved to front line public services."