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Brown admits need for cuts in spending...

PRIME MINISTER Gordon Brown finally admitted yesterday that spending cuts would be necessary if the UK is to rein in its &pound;175bn projected government deficit and put the country back on the path towards fiscal sustainability. <br /><br />In a speech to the Trades Union Congress (TUC) Brown said: &ldquo;Labour will cut costs, cut inefficiencies, cut unnecessary programmes and cut lower priority budgets.&rdquo; But he stressed that frontline services will not be hit by spending reductions.<br /><br />Opposition parties also gave details of their proposals for tackling the fiscal crisis. Liberal Democrat Treasury spokesman Vince Cable argued for a freeze of public sector pay and a radical review of public sector pensions. <br /><br />&ldquo;Painful and difficult&rdquo; cuts are needed over the next five years, he said, because government borrowing is so high.<br /><br />There should be no ring-fenced areas of spending, he said, and big budgets in health, welfare, defence and education must be tackled.<br /><br />Cable said opposition parties had been too slow to make detailed plans.<br /><br />&ldquo;The time for generalities is over,&rdquo; said Cable, a former chief economist of oil giant Shell.<br /><br />While spending cuts have been the focus of the argument, Stephen Herring, senior tax partner at accountants BDO Stoy Hayward, has criticised the major parties&rsquo; lack of debate about where increased tax revenues will come from. <br /><br />In terms of&nbsp; spending cuts, he said&nbsp; that there was going to need to be a dramatic reduction in spending if the deficit is to be eliminated. <br /><br />&ldquo;Anything which will protect employment and economic growth should be exempt from cuts,&rdquo; he said.<br /><br />He added that broad-based cuts which affect everybody by a small amount and that do not attack either individuals or specific areas of the community would be best .