When we came into office, we inherited an economy that was on the brink. With the largest budget deficit in Europe and no plan for tackling it, Britain faced huge economic risks. These could only be dealt with by a clear plan to deal rapidly with the worst financial position this country has faced for generations.

On Wednesday, we set out that plan. And while the scale and pace of the action we need to take is unavoidable, we can choose how we do it. The Spending Review sets out those choices: to spread the burden fairly, to promote economic growth, and to invest in the life chances of our children. These are hard choices that affect millions of people, but they are the right choices to set our country back on the road to prosperity.

We have spread the burden fairly by protecting the key services that the most vulnerable in our society rely on. Social Care has been given a funding boost worth £2bn, the NHS and schools have been protected and our plans for social housing will deliver up to 150,000 new affordable homes.

We have promoted future fairness through a £7 billion ‘fairness premium’ that will support improving the life chances of our poorest children from their first pair of shoes to their first pay packet.

We have promoted future growth by giving the go ahead to key transport projects that will unlock economic potential in every part of the country. We have also delivered on a Green Investment Bank that will kick start green investment and generate jobs.

And we are pushing forward with radical reform. Our decentralisation agenda will reduce the number of central government grants from 90 to fewer than 10. With the exception of schools and public health, ring-fences on council spending will disappear, giving local authorities much greater flexibility. We will deliver welfare reforms that simplify the system and make work pay. And our criminal justice reforms will roll out the community justice programmes that were pioneered by Liberal Democrats in local government.

Yes, it’s going to be tough, and everyone will make a contribution, but those with the broadest shoulders will bear the biggest burden. That’s why we’ve reduced taxes for the low paid, and increased them for the richest. It’s why we introduced a banking levy – and we’ve made it our aim to extract the maximum sustainable tax revenues from the banks that got us into this mess.

The worst thing to do would be to burden future generations with the debts that Labour left us. We have made the tougher choice, no doubt, but we should be proud of the way we have taken responsibility and we have done the right thing.

Danny Alexander MP
Chief Secretary to the Treasury