Mr Brown is trying to frame the next election as a choice between “Tory cuts” and “Labour investment”, despite predictions from independent economists that Labour’s huge Government borrowing will mean that whoever wins the next election will have no choice but to cut spending.
Privately, some ministers are uneasy over the Prime Minister’s refusal to admit spending will have to be cut by whoever wins the next election, believing it will hurt Labour’s standing.
Mr Hutton, who quit the Cabinet last month, said that voters realise that the growing gap between what the Government spends and what it raises in tax means that the public sector will inevitably face a squeeze.
Mr Hutton said: “I think fundamentally people know their belts need to be tightened and I think the discipline and responsibility of politicians is to be clear about what they are going to prioritise – is it health, is it education, is it schools is it defence?”
He added: “There’s going to be a very important debate in the next few months about that. Politicians have got to lead that debate and be clear with people.”
“The country expects honesty about this. They know that things are going to be tight in the next few years.”
“People are much more grown up than we often assume. They understand a change is coming.”
The current spending round ends in March 2011. Labour has not yet set out any detailed spending plans after that, but independent economists have said that significant cuts are inevitable.
David Cameron, the Tory leader, has accused Mr Brown of “dishonesty” over public spending, saying the failure to publish detailed spending plans is an attempt to conceal the cuts Labour would be forced to make.
If the Government of the day chooses to protect health and education spending, the Institute for Fiscal Studies puts those cuts at around 10 per cent in other Whitehall departments.
The alternative to cutting spending would be to raise more money in taxes.
Sir John Major, the former Conservative prime minister, said that the country would face “very significant tax rises” if spending is not cut, perhaps as high as 5 pence added to income tax, or a 20 per cent rate of VAT.