Chancellor refuses to rule out cuts to policing in Wednesday’s spending review, which will include cuts to many government departments

The Home Office has agreed a deal on police cuts that are expected to hit frontline services despite heightened security concerns, George Osborne has revealed.

Confirming all government departments have settled their future spending plans for this parliament, the chancellor refused to confirm the exact nature of cuts to British policing.



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He suggested, however, that he may still find the planned £12bn worth of welfare cuts, and at the same time introduce a transition scheme for those on tax credits.

He also hinted that the forecasts for the public finances, due to be published by the Office for Budget Responsibility on Wednesday alongside the spending review, will show a worsening deficit this year. He stuck to his commitment to secure an overall £10bn surplus by the end of the parliament.

Speaking on the BBC’s Andrew Marr Show, Osborne refused to say the spending on frontline police could be protected but claimed the spending review would show a 30% increase in the overall counter-terror budget.

Asked if frontline police were going to be protected, he replied: “There had been difficult decisions.”

On welfare spending, Osborne said he had listened to those asking him to ease the transition to a “lower-welfare higher-wage” economy, but said his central judgment was that the government needed to make savings in the welfare budget.

He insisted the important thing was to get to the right destination. He said those who had asked the government to help with the transition for those losing tax credits have raised perfectly legitimate questions. “I have always been someone who has thought it is not a weakness to listen to good arguments,” he said.

Asked about the specific £12bn welfare cut target set out at the 2015 election, Osborne: replied “I am pretty confident we can deliver what we promised the British people we would deliver.”

His remarks suggest he is likely to slow the pace of the tax credit cuts, and find savings in the housing benefit budget to fund the loss of income.

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With police chiefs and former home secretaries arguing that further cuts to the police budget will hinder the intelligence fight against terrorists, Osborne said: “Every public service has to make sure it is spending the public’s money well and there can be efficiencies made in the police in how they buy their equipment and how they operate they run their back offices. Increasing the counter-terrorism budget by 30% involves money going to the police as well as our security services to make sure we can deal with marauding gun attacks. The resources are there to deal with the terrorist threat.”

But he said he was confident the security services would have sufficient resources to keep the population safe if Islamic State launched an attack in the UK.

“Precisely because we are making difficult decisions in other parts of our budget, we can give our military more kit, we can increase our counter-terrorism budget by 30% and we can also take action to prevent guns coming into this country and deal with gunmen on the streets.”

He said the spending review had been the smoothest of the three he had conducted, with nothing imposed on ministers and no deep disputes within government.

John McDonnell, the shadow chancellor, said Osborne’s deficit plans were in chaos. Only half the deficit will have been eradicated, debt will be £1.5tn, and last month we have borrowed more than in than any month in the last six years.

He said he was very worried by the cuts to the police service. “If he says the police cuts will not take place then I will support him. There will be no political game playing on this,” McDonnell said.