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Debate is still raging on where axe will fall

By Nigel Morris and Michael Savage

The man responsible for overseeing huge spending cuts admitted last night that there was still a “long way to go” to reach a deal over where they would be made.

Danny Alexander, Chief Secretary to the Treasury, suggested that talks on cutting £83bn from spending would go to the wire. They are due to be announced on October 20.

Mr Alexander told a LibDem fringe meeting: “We're making good progress, but there is a lot longer to go. These are incredibly difficult decisions. They weigh heavily on our shoulders.”

He insisted there was no alternative to dramatic action to reduce the £155bn deficit, and brushed off suggestions that heavy cuts could trigger a double-dip recession.

“All the forecasts suggest the recovery will be choppy, but we will see growth in coming years and that is what other commentators say,” he told the meeting.

He added that he believed the biggest threat to that recovery would be to fail to deliver on the government's deficit reduction programme.

Revealing he had developed a “pretty thick skin” since taking over as Chief Secretary — a role he described as the toughest job he had ever done — Mr Alexander, who previously led a campaign for British membership of the single European currency, conceded he was relieved that the country was not in the euro.

“I'm not saying there is not a case for the long term, but that is a long way off. But the flexibility we now have is benefiting the economy.”

Mr Alexander, a key member of the team that negotiated the coalition agreement, disclosed that he was the first Liberal Democrat to walk into Downing Street — even before Nick Clegg — to check there were no last-minute hitches.

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