Clegg seeks to calm public 'anxiety' over spending cuts

Nick Clegg has sought to calm fears over the impact of spending cuts, insisting they will be spread over four years and not implemented immediately.

The deputy prime minister told the BBC he understood "people's anxieties" about October's spending review, likely to see departmental budgets cut by 25%.

But it was wrong to say a "Sword of Damocles" would fall overnight as cuts would be spread out until 2015.

Labour have accused the coalition of "gambling" with people's jobs.

Mr Clegg was speaking after research for the BBC suggested North East England would be least "resilient" in the face of spending cuts, as it has a higher proportion of public sector jobs.

The Treasury is currently holding meetings with individual ministers ahead of the October's spending review, likely to be the toughest in a generation.

'Spread evenly'

All departments, excluding the NHS and international aid, have been asked to find four-year cuts of between 25% and 40%.

Mr Clegg told Radio 4's Today programme there were "difficult decisions" ahead but talk of billions being taken out of the economy immediately was misleading and only added to people's fears.

The cuts would begin in April 2011, he said, and would be "spread evenly" over the next four years - equivalent to an annual 6% budget reduction over four years.

"While I totally understand people's anxiety, I don't think we should aggravate that anxiety by pretending there is a sword of damocles coming down straight away," he said.

Asked about worries that the cuts could tip the economy back into recession, he said he always believed the recovery would be "choppy and uneven" but the risk of not dealing with the deficit was even greater.

Mr Clegg denied the spending review would exacerbate the North-South divide, saying the economy had been unbalanced - and over-reliant on financial services in London and the South East - for many years.

He was "acutely aware" of the dangers facing parts of the country "over-reliant" on the public sector, and ministers were committed to spending £1bn to support job creation in vulnerable areas including tax incentives for private sector firms to set up there.

"I wish we could flick a switch and rebalance the economy overnight," he said. "This does take time."

Political risks

Later, in a speech in London, Mr Clegg said the spending review would be "tough" but an essential part of a "five year plan to put the UK back in the black".

Past generations had "got it wrong" in running up big debts and although it would require "many years of patient execution", the government was committed to "taking the necessary steps to ensure a fair and prosperous future".

"A thriving economy cannot be built in the long term on shifting sands of debt," he said.

By setting out a long-term framework to reduce spending, he said he hoped public sector managers would have a "little space to plan carefully" for the future and "not panic and take the wrong decisions".

He said he was "under no illusion" about the political risks that the Conservatives and the Lib Dems faced in what he said was "an unavoidable task" of re-adjusting public spending.

But he insisted; "It is not being done with any ideological relish, it is not being driven by some desire to cut the state back.

"Some of the hyperbole I have heard is just preposterous - this idea, that somehow, it is back to the 1930s. After the spending round, we are still going to be spending £700bn of public money - more than we are now."

But Labour - which argues that the coalition is cutting too much too fast - said the cuts would most affect the least well-off.

"The government's reckless approach to the economy is a gamble with growth and jobs," said shadow business secretary Pat McFadden.

"We already knew they had turned their backs on supporting regional growth, with decisions like the scrapping of the regional development agencies. Today we have further evidence that their approach will hit the poorest areas hardest."