The West is in ‘grave danger of financial collapse’, Kenneth Clarke warned last night.
We face ‘quite the most dramatic’ spending cuts in ‘living memory’, the former chancellor added as the Coalition prepares to unveil plans to rein in the unprecedented budget deficit left by Labour.
‘I actually am one of those who believes, with a grave danger of financial collapse, we’re not out of the woods in the Western world yet,’ he said in the extraordinary address.
‘There is an extremely serious financial crisis.’
His remarks appeared to contradict the Prime Minister, who insisted days ago that the Coalition’s early decisions have put Britain ‘out of the danger zone’.
Mr Clarke said the UK had ‘rescued ourselves at the moment’, but added: ‘If we fail to deliver with the [cuts] programme we’re going to set out, we’ll be back there all too soon.’
Speaking ahead of next week’s comprehensive spending review, which will see most Government departments’ budgets cut by 25 per cent over four years, the Justice Secretary said: ‘These are difficult circumstances.’
In unscripted remarks to a conference of prison governors, Mr Clarke said the review would be ‘quite the most dramatic in living memory’.
That also undermined attempts by Mr Cameron and Liberal Democrat Deputy Prime Minister Nick Clegg to assure voters that £83billion cuts will not mean an end to life as we know it.
Both have pointed out that by the time of the next election in 2015, government spending will simply have been reduced to the same level as in 2006.
But Mr Clarke insisted: ‘There’s no one alive who remembers a crisis of this kind. It is not the usual public spending squeeze.’
Blaming the last government for the financial crisis, he added that he had never ‘hidden my disapproval of a state that spends the equivalent of half of the GDP’.
‘The current levels of spending are simply unsustainable and it would be irresponsible for the Government not to get to grips with it,’ he added.
By James Chapman and James Slack
Last updated at 4:01 PM on 15th October 2010
Source: Daily Mail