Labour left us with the largest deficit since the Second World War. We borrowed £1 in every £4 that we spent. We had to take tough decisions to bring our economy back from the brink of bankruptcy.
While recovery from such a deep recession is never straightforward, Britain is moving out of intensive care - from rescue to recovery. The Spending Round sets out how we will secure that recovery.
Of course the choices are difficult, and there is no easy route out of a mess as big as the one Labour created. The departmental settlements I have announced today will reduce current spending by £11.5 billion in 2015-16. But every decision we have taken is based on three principles: delivering reform, prioritising growth and ensuring fairness.
Through reform, we are determined to get more from every pound we spend. We are clamping down on waste across Whitehall - £5 billion of the savings today come from efficiency savings. By reforming elsewhere, we are able to announce that we will not cut the number of soldiers, sailors or airmen. By homing in on efficiency and driving through public service reform, we are delivering better services and bringing down Government spending.
To deliver growth, we are investing in education, enterprise and the economic infrastructure we need so that we can win the global race. Today I have announced there will be over £300 billion in capital spending guaranteed over the next decade. We are setting out long-term funding to science and schools, boosting apprenticeship funding, and prioritising education – we will provide for 180 new Free Schools in 2015-16. I know that Government spending alone cannot create growth. Enterprise does. We need to provide the schools, science, transport links and reliable energy that enable business to grow.
To ensure fairness, we are making sure that those with the broadest shoulders bear the greatest burden. We are also reforming welfare so that it is fair to both those who need it and those who pay for it. That is why we have announced an overall cap on welfare spending from April 2015 and have set out a package of reforms that will put in place new conditions on people claiming out-of-work benefits: half of jobseekers will have to go to a jobcentre once a week, claimants must do an Upfront Job Search and wait 7 days before claiming benefits, and claimants will be required to learn English if they don’t already speak it.
The decisions we take are not easy, and I know that times are difficult.
But with today’s Spending Round, we make more progress towards an economy that prospers, a state we can afford, a deficit coming down and a Britain that is on the rise.
Chancellor of the Exchequer