Osborne - carriers may be sunk by cuts

My dispatch for today's Herald from the TUC in Liverpool. This is news which will not go down well in Glasgow were "wurr super-carriers", as Ian Davidson MP would have it, are being built.

Thousands of defence jobs in Scotland are under threat as the first victims of the looming political battle over cuts in public sector spending.

As Prime Minister Gordon Brown took the symbolic step of admitting to the TUC conference that he would cut "lower priority budgets" but protect vital public services the Shadow chancellor in contrast said an incoming Conservative government would hold an immediate budget to rein in the government deficit.

In a speech to rival Mr Brown’s address to the TUC in Liverpool, George Osborne did not provide any fresh details of proposed Tory cuts. But asked whether he could identify specific savings for a snap budget he highlighted major defence projects, including the £4bn Royal Navy super carriers being built on the Clyde and Rosyth.

“I do not know the details of some of the major defence projects which have been the subject of speculation in the newspapers,” said Mr Osborne. “I simply do not know what the break clauses are in the Eurofighter programme or the A400M or the aircraft carriers.”

While Mr Osborne signalled that defence would be one of the areas ripe for cutting the Labour Defence Secretary Bob Ainsworth also hinted at "major shifts" in defence spending as the government prioritises resources for the war in Afghanistan.

The Defence secretary urged a "wide-ranging" debate about future priorities but did not say what might be squeezed.

Despite the reprieve delivered for the Benbecula missile range by Scottish Secretary Jim Murphy yesterday it now seems inevitable that the defence industry in Scotland will suffer hard in under what all parties now accept would be a period of stringent cuts.

Harry Donaldson, the general secretary of the GMB union in Scotland, said cancellation of the carrier contract would represent a death blow to British shipbuilding.

“We need to remind ourselves that 10,000 jobs are secure on this project over six years. The Tories now threaten the very viability of the UK shipbuilding sector,” said Mr Donaldson.

“If this threat is carried out it would leave a major gap and lead to job losses all across the UK and in particular Rosyth, Scotstoun, Govan and VT Portsmouth.”

The Shadow Chancellor revealed the plans for a snap Budget after insisting that cutting public spending would not choke off a recovery.

Mr Osborne said that Gordon Brown’s admission that cuts were inevitable amounted to a white flag and claimed that the Tories had “comprehensively" won the spending argument.

The Prime Minister though believes that he will be able to draw the Tories into exposing their cuts agenda and present himself as the leader who rode out the recession and can protect the public sector from Conservative excesses in the future.

“When our plans are published in the coming months, people will see that Labour will not support cuts in vital frontline services on which people depend,” Mr Brown told trade unionists.

“Labour will not put the recovery at risk, protect and improve your frontline services first and make the right choices for low and middle income families in the country."

Brown claimed his government "faced the Tories down – and we have been shown to have done the right thing by hardworking British families" by spending during the recession.

“There is a fundamental difference between the parties as to how to come through this recession and avoid it being deeper, longer and more damaging," said Mr Brown.

“It was not the much heralded speech promising cuts in public spending,” said Paul Kenny,GMB general secretary at the Liverpool gathering. “Instead he promised investment and he guaranteed frontline services. This is in stark contrast to what the Tories are saying.”