Mar 11 2013
Prime Minister David Cameron has rejected calls for cuts in NHS budgets, as he came under pressure from the Conservative right to rein in spending in next week's Budget.
Senior backbencher Liam Fox issued a call for a public spending freeze of between three and five years, and challenged Mr Cameron's decision to protect the budgets of the NHS, schools and overseas aid.
In a high-profile speech in London, the former defence secretary also called for a capital gains tax holiday to encourage investment, and an end to universal benefits for pensioners, such as bus passes and the winter fuel payment.
Dr Fox said that a three-year public spending freeze would save the Government £70.4 billion a year, providing funds to cut taxes as well as reduce the deficit. Extending the freeze over five years would save a total £345 billion, he said.
And he said: "We must also ask whether ring-fencing departmental budgets makes sense in a period of prolonged austerity."
Downing Street insisted that the Prime Minister's view on the need for "ring-fence" protection for the NHS, schools and aid was unchanged.
In a message expected to be warmly greeted by many on the Tory right, Dr Fox said it was time for Government to cut spending and welfare, in order to allow taxpayers to keep more of their own money.
"I believe that the country will be at its best when the Government is small and people are left to enjoy the fruits of their own labour," said Dr Fox. "I believe that in leaving money in people's pockets, economic activity will follow. People will buy houses, invest for their future or just go shopping. Whichever is the case, it is creating a society that is sustainable for the future in a way that our current welfare-dependent and debt-ridden economy is not."
Speaking to the Institute of Economic Affairs, Dr Fox called for a "systematic dismantling of universal benefits and turning them into tax cuts".
But Mr Cameron said: during a visit to Milton Keynes: "There are many good suggestions coming from many quarters and as Prime Minister I'm never short of advice. Plenty of people are giving me advice and there is one piece of advice I won't take and that is the piece of advice that says 'You ought to cut the National Health Service budget'."