- Cameron meets trade union leaders for "mince pies and coffee" summit
- Labour demands coalition scale back cuts
- Alexander insists Lib Dems in coalition will not lose their nerve
- His comments are seen as attempt to stiffen resolve of his party
(FT.com) -- The Liberal Democrat minister behind Britain's austerity program has vowed that the coalition will "stand firm" in implementing its £81bn of cuts next year, facing down political opponents and threats of a "battle" with trade unions.
Danny Alexander, Treasury chief secretary, said on Monday that there was no alternative plan and the coalition would resist pressure to spend more money next year to lessen the pain of the cuts.
"The plan is right," he told the Financial Times. "The government is absolutely going to stick to it. People should be in no doubt at all.
"The most important thing is for the government to see the plan through. That's what is going to establish confidence in the economy and the credibility we need going forward."
Alexander's comments came as David Cameron met trade union leaders for a "mince pies and coffee" summit in Downing Street, the unions' first official meeting with a Tory prime minister for 25 years.
Brendan Barber, Trades Union Congress general secretary, claimed the cuts would be "socially divisive and economically dangerous", while Len McCluskey, the new leader of Unite, has urged trade unions to prepare "for battle".
Meanwhile, Labour is demanding that the coalition scales back the cuts, and even Sir Gus O'Donnell, Britain's most senior civil servant, has privately called on the Treasury to put emergency stimulus measures on standby.
--Danny Alexander, Treasury chief secretary, says of plan
But Alexander delivered a clear message to the markets that the Treasury would press ahead with the cuts even if the recovery started to falter. "It's essential to the economic future of the country," he said.
Alexander, who oversaw the autumn spending review, insisted that the Lib Dems in the coalition, shaken by the row over rising university fees, would not lose their nerve in what he admits will be "an extremely tough" period ahead.
He argued that any wavering could spook the markets, leading to a rise in interest rates and growing unemployment. "There will be people who say you should spend money on this or that, but we have to stand firm," he said.
Alexander's comments will be regarded as an attempt to stiffen the resolve of his party, seen by Labour and the unions as a possible weak link in the coalition as they try to resist the cuts.
After Monday's Number 10 meeting, Barber said: "The UK is in the grips of a bleak midwinter. Today we warned the prime minister that next year promises to be even bleaker for millions of families and their communities as the spending cuts bite hard and hit jobs and services."
Cameron's spokesman said that the talks were "businesslike" and the prime minister had no plans to change employment law.
Meanwhile, McCluskey wrote in the Guardian that the unions should work with the "magnificent student movement" to protest against the cuts, but Ed Miliband, Labour leader, said "overblown rhetoric" about strikes would not win public support. The TUC is planning a London rally in March to protest against the cuts, although predictions of mass strikes are so far premature.
Union leaders used the meeting -- arranged at the TUC's request -- to urge Cameron to raise money from the banks.
"We welcomed the prime minister's intention to continue this dialogue with similar meetings in the future, and for urgent contact to take place with ministers on Post Office privatization and public sector pension changes in particular," Barber said.
Although Barber has met Cameron privately, this was the first official meeting between the TUC and a Tory premier since the end of the miners' strike in 1985 when Norman Willis, then TUC general secretary, met Margaret Thatcher.
© The Financial Times Limited 2010
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