Kwasi Kwarteng claims it would be too time-consuming to hold a spending review that might ease the pain for public services braced for billions of further cuts.
Asked to explain the controversial decision, the chancellor also dismissed fears that services have been hit by rampant inflation – arguing they do not “buy shopping in Sainsbury’s” like the public.
Experts are warning that schools and hospitals will bear the brunt of an anticipated £18bn of real-terms cuts from not topping-up their budgets as inflation tops 10 per cent.
But Mr Kwarteng, speaking at the Conservative conference, insisted he is correct to stick to 2021 allocations, telling his audience: “I mean, these things take forever.
“As the secretary of state, it does take a very, very long time, and I’m saying let’s stick to what we’ve said we’re going to do.
“And actually, in terms of the inflation point, the government doesn’t buy a basket of goods. It’s not as if the government goes into Sainsbury’s and buys a whole bunch of shopping.”
The comments came as the chancellor said he is committed to “compassionate Conservatism” – even as he acknowledged he is also considering real-terms benefit cuts.
Mr Kwarteng also dismissed claims that the Conservatives are doomed, as polls put them up to 30 points behind Labour, saying: “Polls do move up and down.”
The respected Institute for Fiscal Studies (IFS) has warned an extra £18bn is needed in the next financial year to restore “the real-terms generosity intended” when allocations were made.
It has calculated the likely pain for key services such as health and social care (£7.5bn), education (£3.4bn), the home office (£0.7bn), justice (£1.4bn) and defence (£1.4bn).
“That will pose obvious challenges for stretched public services,” Ben Zaranko, a senior research economist at the IFS, told The Independent.
At the fringe meeting, hosted by the right-wing Institute of Economic Affairs and Taxpayers’ Alliance, Mr Kwarteng said his four weeks as chancellor had gone “very well” – despite the botched budget.
And he pointed to an upside from the fierce focus on his measures, saying: “Everyone is talking about growth. Everyone is talking about the plan.”
Mr Kwarteng also protested there had been no controversy when Joe Biden opened his spending books at the same time as the Federal Reserve raises interest rates.
“The difference is that the fiscal expansion that we announced was tax cuts and the fiscal expansion that he [Mr Biden] announced is public spending.
“But nobody’s saying that his policies are acting against what the Fed are doing. So, when he does fiscal loosening and the Fed whacks up interest rates, no-one has an issue with that.”
