Minister warns Brown over spending cutbacks

Author: By Michael Savage, Political Correspondent

In an interview with The Independent, Lord Adonis issues a clear message to sceptics as well as to the Prime Minister that he will not tolerate any attempt to sacrifice the high-speed line, which could cost the public around £8bn.

It comes as pressure grows on Gordon Brown from his own party to “come clean” over spending and admit that some sacred cows will have to go. Data released by the Centre for Economics and Business Research today suggests that around £100bn in tax rises and spending cuts will be needed by 2018 to restore the public finances.

The Prime Minister’s support for a high-speed rail line, ultimately linking London to Glasgow, was central to the deal that saw Lord Adonis move to the Department for Transport (DfT) last year. Allies believe he could walk out of Mr Brown’s Cabinet should backing for the project waver. The Government’s spending plans beyond 2011 remain a mystery, though the Chancellor, Alistair Darling, has promised that more details of future spending will be laid out ahead of the next election. Mr Brown has said that “hard choices” will have to be made, but has stubbornly refused to reveal where spending cuts will come.

However, Lord Adonis signalled that he will not compromise over his chosen pet project, despite the prospect of a decade of spending cuts. “High-speed rail is a long-term project. The fact that we have constrained finances for the next few years shouldn’t lead us to constrain our ambition,” Lord Adonis said. “On the contrary. What we’re planning for is the infrastructure we will need over the next generation. We won’t be spending serious money on it for at least five years. The bane of infrastructure planning in this country has been the failure to think for the long term and to cancel projects because of very short-term funding constraints.”

The jockeying among ministers for a major slice of a limited pot of money is set to kick off in earnest after the Pre-Budget Report in the autumn, when Mr Darling will announce his projections for the economy. The Independent understands that some tentative discussions over future spending plans have begun at an official level.

Currently, several departments are working on the basis that they will continue to be looked upon favourably by the Treasury. Officials at Ed Balls’ Department for Children, Schools and Families are hoping that the Government’s pledge to raise the compulsory age for education or training to 17 in 2013 and 18 two years later will save them from major cuts. However, the Secretary of State for International Development Douglas Alexander’s aid budget is only guaranteed to rise until 2013. No commitments have been made beyond then.

Doubts over the future of high-speed rail have increased over recent weeks, with Britain’s transport budget already under intense pressure ? and it could yet be raided further to prop up other departments. The recession has triggered clauses committing the Government to help rail companies cover losses in expected revenue, while the renationalisation of the East-coast mainline rail franchise also looks set to leave a hole in the DfT’s accounts running into hundreds of millions of pounds.

But Lord Adonis said that “neglect on the part of successive governments” had left Britain’s transport infrastructure lagging behind that of other countries. “I believe passionately that we will only become a thoroughly modern country when we have a thoroughly modern transport system,” he said. “Developing the plan for high-speed rail is as big a reform as we have carried out. The Prime Minister is absolutely committed to that, too. If we are going to be a successful country in the 21st century, we are going to need a modern rail system that must include high-speed rail between our major conurbations.”

He admitted there would be “difficult decisions” to make on spending over the coming years, but high-speed rail must not be included in any cuts or delays. “The difference between doing it [the high-speed line] soon and doing it in another generation would be huge,” he said. He is determined to have a clearer read out of costing and timescale for the project by the end of the year.

Meanwhile, the Labour MP Jon Cruddas told The Independent that Mr Brown needed to end his Government’s “sense of denial” over the future of spending. “We can only start to have the debate about what we will champion when we acknowledge the consequences of a massive, global recession,” he said. “I don’t know anyone who doesn’t realise spending cuts are coming ? they understand that the world has changed. But we are letting the Tories off lightly by not comparing what our priorities are to theirs in the new financial climate.”

Yesterday, Britain’s top civil servant also warned that any future government would have to deal with the “immense” challenge of much tighter public finances. Sir Gus O’Donnell, the Cabinet Secretary, told the BBC that future ministers would have to decide where their priorities lay in light of shrinking budgets across Whitehall. Vince Cable, the Liberal Democrat Treasury spokesman, has also called on both the Tories and Labour to concede that some “big programmes” will have to go.

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