Brown facing revolt over plans to raid health, transport and education budgets to pay for latest round of spending
Gordon Brown was facing a Cabinet revolt today as it emerged his latest round of spending on ‘social housing’ will be paid for out of other Government departments’ budgets.
The Prime Minster yesterday unveiled an additional £1.5 billion to build 110,000 ‘social homes’ which will form the centrepiece of Labour’s pre-election fightback.
But the plan will not be funded with new money, ministers confirmed yesterday.
Instead, half the cost will be funded by ‘underspends’ from other Government departments, including health, transport and education.
The rest of the cash will be taken from the Department of Communities, which is responsible for housing.
Mr Brown’s big relaunch came as a new poll showed voters trust the Tories more to decide where to cut spending.
Bemused: Little Nelson Nodder, 11 months, looks away as his mother Lina talks to the Prime Minister at the medical centre yesterday
Today’s ComRes survey for the Independent shows 31 per cent of people trust the Conservatives most to decide where public spending cuts should be made, 21 per cent Labour and 14 per cent the Liberal Democrats.
The Department of Transport is expected to provide funding from underspending on the widening of the M25, while the Home Office is expected to provide around £50million.
After the Prime Minister yesterday published his Building Britain’s Future masterplan, one minister told The Times: ‘There is nothing there. we’re going to be out of power for years.’
The Prime Minister’s latest Government relaunch was also overshadowed when Lord Mandelson revealed that the Government is shelving plans to set out Whitehall budgets beyond 2011.
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The Treasury has denied any decision had been reached and No 10 said it was a matter for the Chancellor.
By pulling rank over Chancellor Alistair Darling, Lord Mandelson prompted Cabinet disarray, with the Treasury insisting Mr Darling had not made any decisions on the timing of the next public spending review, which had been due this autumn.
Critics said that would mean voters being asked to sign a blank cheque for Labour at the election.
David Cameron said the debacle was typical of a party determined to ‘cover up the truth about cuts’.
In an extraordinary attack on Mr Brown, the Conservative leader said: ‘We shouldn’t be surprised. I believe there is a thread of dishonesty running through this premiership.’
Turf war: Lord Mandelson seemed to be pulling rank on Alistair Darling
He predicted ‘riots on the streets’ unless politicians are honest about the need to rein in public spending.
Opposition MPs said there were even doubts over how a package of measures set out yesterday – including a big rise in public housing, costing £1.5billion – would be paid for.
Setting out his policy priorities for the next year, the Prime Minister promised new ‘entitlements’ for users of public services.
For example nobody needing to see a cancer specialist should wait for more than a fortnight, while patients requiring any kind of hospital treatment should get it within 18 weeks.
Other key measures include:
• A personal tutor and one-to-one tuition for pupils who need it
• Powers for local authorities to give priority on council house waiting lists to local people over migrants
• Free NHS checks for over-40s
• A tougher age rating system for computer games
• A £150million ‘innovation fund’ for hi-tech industry
• New rights to protect women from violence
• A compulsory licensing requirement for wheel clamping firms
• Legislation to remove remaining hereditary peers in the House of Lords.
There is only one year left for which the Government has made specific spending plans, 2010/2011.
Business Secretary Lord Mandelson, who became Deputy Prime Minister in all but name in last month’s reshuffle, insisted yesterday that it was impossible to forecast further because it was unclear how the economy would perform.
But Mr Cameron said: ‘Cancelling the spending review is nothing to do with economic uncertainty and everything to do with political manoeuvring.’
He said Mr Brown was claiming spending on public services would continue to rise, when even the Government’s own figures showed it would have to fall. ‘I would rather
fight an election on a straightforward, frank and honest platform than just try to pretend “Oh, it’s all fine”,’ said Mr Cameron.
‘That would be the worst of it: you go in to an election pretending you are not going to have to make spending reductions, then you have to make them, and then you really do have riots on the streets because people do not have faith in their politicians.’
Pressed to say whether he believed the Prime Minister was a liar, Mr Cameron said: ‘I didn’t quite put it like that.
Gordon Brown being given a kiss by Lillian Allstrum, 92, at the Barkantine Medical centre on the Isle of Dogs in east London yesterday
‘I’ve always tried to use my words carefully but I think there is a huge amount of deceit about the Government’s spending programme.’
Pressure on the Government was increased yesterday by a stark warning from international economists.
The Organisation for Economic Cooperation and Development called for ‘more explicit’ spending cuts and tax rises to address a deficit expected to hit an eye-watering 14 per cent of GDP by 2010.
In its annual health-check of the UK economy, it warned that recovery will be slow, with unemployment rising to 10 per cent and there is likely to be a permanent drop in the overall size of Britain’s economy.
Shadow Chancellor George Osborne said the OECD had ‘ torpedoed’ the policy relaunch by the Prime Minister.
Veteran City economist Roger Bootle, of Capital Economics, said: ‘The trouble is not that the economy-is uncertain – it’s that it’s only too certain.
‘We all know it’s in dire straits and that public spending is too high. That’s why the Government doesn’t want to have a comprehensive spending review.’
Attack: David Cameron accused Gordon Brown of deceit over spending
Liberal Democrat leader Nick Clegg said both the Prime Minister and Mr Cameron were treating the voters as if they were children who were ‘too young to know the truth’.
The Tories are the party most trusted to make spending cuts after the election, according to a poll.
The ComRes survey for the Independent found that 31 per cent of people trusted the Conservatives most to decide where cutbacks should be made, compared with 21 per cent who said Labour and 14 per cent for the Liberal Democrats.
However, the poll also showed the Tories’ overall lead slipping from 16 points last month to 11 this month. It puts the Tories on 36 per cent, Labour on 25 per cent and the Lib Dems on 19