Report calls for £50bn public spending cut

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The government should freeze state pensions for a year and scrap child benefits and the identity card scheme, a report on the future of public spending has said.

A study from the Taxpayers' Alliance and the Institute of Directors detailed "practical proposals" which the government could take to save £50bn from its annual budget.

The report, which comes in a week when both the Conservatives and Labour said they would cut spending, outlines 34 specific measures, proposing a total of £42.5bn in annual savings for 2010/11 and £7.5bn in the years thereafter.

Other proposals include withdrawal from unproductive areas in which the "government should not be involved" such as Surestart, school building and the Eurofighter upgrade.

The biggest saving would be through the abolishing of universal weekly child benefits of up to £20 per child, saving an estimated £8.5bn.

And the report proposed scrapping one in ten jobs in the civil service and a similar proportion of jobs from state-funded health and education services which do not involve direct contact with patients or students.

The report's authors said the aim was to highlight specific cuts rather than vague efficiency savings.

The chief executive of the Taxpayers' Alliance, Matthew Elliott, said: "After years of simply spending more and assuming the taxpayer will pick up the bill, the situation has changed.

"These proposals offer practical, reasonable ways to save large amounts of money and politicians in Westminster would do well to take them on board.

"Taxpayers cannot afford to sustain the current rate of spending, and they want to see an end to their money being spent unwisely."

But Kate Green, chief executive of the Child Poverty Action Group, attacked proposals of "deep, swingeing cuts to education, training and to support for children".

"These policies would damage children and families long after the recession is likely to have ended in the UK," she said.

"The Taxpayers Alliance and Institute of Directors propose abolishing child benefit, the popular, effective and well targeted scheme on which many families rely, and replacing it with a complex, error prone and expensive to administer means tested system.

"Child benefit is the cornerstone of policy to support families, to means test now wouldn't just throw the baby out with the bathwater but the bath as well.

"The answer at a time of fiscal constraint is for society to come together, but more means testing will stigmatise the poorest families more.

"All should pay a fair share, and those with the broadest shoulders should take more of the burden.

"The report says nothing about how resources could be more equitably raised, such as by reducing tax perks given out through low rates of tax for the wealthiest."

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