We spoke to James Murray – the Exchequer Secretary to the Treasury and asked him about the bleak picture the prime minister painted.

James Murray: I think he was very honest about the scale of the challenge that we’ve inherited, about the difficult choices that lie ahead – also clear that change is going to take time. But I think what was optimistic about it is that we can build a better future. We can fix the foundations and build a better, fairer Britain. But that’s going to take time.

Jackie Long: The prime minister said today that those with the broadest shoulders should bear the heaviest burden. Would that be pensioners who’ll lose their winter fuel payment? Are they the people with the broadest shoulders? Or the families who are desperate for a Labour government to lift the two child benefit limit?

James Murray: You mention the winter fuel payment – we decided to change that so that it’s now targeted and it’s just eligible for those pensioners who receive a pension credit rather than being universal benefits. But we recognise that that is a tough choice. The way it had been designed is that every pensioner would receive the payment and we think it is a better use of public money, given the fact we’re in a dire financial situation, to focus that help on those pensioners who need it most.

Jackie Long: And those families who were desperate to have the two child benefit limit raised, there’s no chance of that now, is there?

James Murray: There are many things which we cannot afford to do because of the fiscal situation that we’ve inherited. But what we are completely focused on is making sure that we tackle child poverty. But also, more broadly, putting our public finances on a firmer footing because we saw what happened under the last government when they lost control of public finances – and actually it was the most vulnerable in society who were hit hardest.

Jackie Long: The prime minister also talked a lot today, as you have done, about not being left with any choice. It’s already taken a decision to increase the pay offer to striking public service workers. But just so we’re clear, that does mean more pain for another group in society, doesn’t it?

James Murray: What was really clear is that the situation, with strikes happening so frequently and with no end in sight, it was a completely unsustainable situation that was costing everyone in the country billions of pounds – as a result of the strikes carrying on without any end in sight. It also meant that public sector services were unable to recruit and retain staff and it meant that we wouldn’t be able to start reforming and improving public services.

Jackie Long: If you look at prisons, the prime minister talked about it today. They’re at breaking point, with this hugely controversial early release scheme about to come into force. That crisis isn’t going away.

James Murray: You’re absolutely right to draw attention to the fact that the situation we inherited in terms of prisons is dire, as well as the economic situation that we inherited. Prisons have been unsafe for many years, with the level of capacity being below 1% many times – in the male estate. Actually by having the early release programme, a carefully developed programme with the appropriate safeguards in place, gives us not only the confidence that if people are arrested and charged and sent to prison, they have a prison place waiting for them. But it also gives us the space to put in a long-term plan to increase prison capacity.

Jackie Long: But the long-term plan will not work without more money, will it?

James Murray: It will set out by the end of the year a ten-year plan for prisons, which would involve acquiring new sites for prisons and taking control of the planning process to make sure those prisons can get built. But if there’s no getting away from the fact that this is not going to be a quick solution, we’ve inherited a dire situation. We know that change is going to take time, but we are absolutely determined to fix the foundations so that we can build a better future.