The Chancellor George Osborne today outlined his Spending Review as he said that the Coalition government was set to bring Britain ‘back from the brink’ of bankruptcy.
Mr Osborne announced cuts to defence, transport and benefits as he laid out details of his plans to claw back the Budget deficit by 2015/16.
As part of the cuts, the Green Investment Bank, announced by the Labour government, will only receive £1 billion of funding rather than the £2 billion announced by the previous administration.
Meanwhile in the transport sector, Mr Osborne promised that £30 billion is set to be invested over the next four years, and while subsidies to public transport will be cut, big projects such as the London’s Crossrail and Mersey Gateway Bridge will be retained.
The Department for Energy and Climate Change (DECC) will have to cut £5 billion a year while the Department for Environment, Food and Rural Affairs (Defra) will have to save £8 billion a year despite taking on extra responsibilities following a cull on quangos.
The Society of Motor Manufacturers and Traders (SMMT) however praised the review, stating that whilst ‘challenging decisions had to be taken’, the government had shown its commitment to prioritising areas that will generate growth including ultra-low carbon transport and skills.
"Across industry, businesses have had to take difficult decisions on how to make best use of limited resources and we welcome government taking a similar approach to ensuring long term stability for the economy," said SMMT chief executive, Paul Everitt. "While some measures will require even tighter budgetary control, industry is supportive of decisions that promote our products and the UK as an attractive place to do business."
However green groups attacked cuts to public transport and green investment after the Government confirmed that subsidies paid to bus companies would be cut while rail fares would rise by three percentage points above inflation.
Friends of the Earth’s transport campaigner Richard Dyer said: "Making rail travel more expensive will make driving and flying more financially attractive, with serious consequences for the environment, while widening the M62 and M25 will increase traffic and emissions.
"Increasing fares and building roads will do nothing to achieve the Government’s aim of cutting carbon from transport – it should be investing in public transport and schemes to encourage greener travel instead," he added.
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