Page last updated at 23:54 GMT, Monday, 25 January 2010

Brown rejects Tory claims he is neglecting the deficit

Laura Kuenssberg on the economic battle lines being drawn by the main political parties

Gordon Brown has rejected Conservative claims that he is delaying spending cuts needed to tackle the deficit for purely political reasons.

Tory leader David Cameron said Labour had "no excuse" for not starting to cut the budget deficit this year except "naked political calculation".

But Mr Brown warned the recovery was "fragile" and cuts could cost jobs.

He said he had been "proven right" over his actions in the banking crisis and believed his judgement was right now.

The Lib Dems say they are proposing £10bn more spending cuts than the government and Treasury spokesman Vince Cable warned "the consequences of failure to bring the deficit under control are serious".

Tories 'isolated'

The parties squared up over the issue of the budget deficit as both the prime minister and the Tory leader held monthly press conferences and Mr Cable delivered a speech on his party's economic policies.

Mr Brown said there was a "consensus" about the need to continue support for the economy in the current uncertain environment and the Conservatives were isolated in their call for spending to be cut.

"I would caution against those who say cuts now would make a difference other than putting the recovery at risk".

He added: "Those parties which propose policies to withdraw the stimulus are the risk to the recovery we are determined to have."

Mr Brown promised to create nearly half a million training places or work placements for young people who ahd been out of work for more than six months.

He accepted there would have to be cuts to ease the deficit but said his government would make these in low priority areas.

Budget test

The Conservatives have said they would go "further and faster" on cutting the deficit than the government - which has said it would halve the deficit over the lifetime of the next Parliament.

Shadow Chancellor George Osborne has said he plans to cut the bulk of the deficit during the next Parliament although Mr Cameron has declined to spell out the scale of cuts that would be needed to achieve this.

Labour says premature cuts could pitch the economy back into recession and plan to increase spending this year.

It is like your credit card -- the longer you leave it, the worse it gets.
David Cameron on the deficit

Figures released on Tuesday are expected to show that the economy returned to growth in the last three months of 2009.

While Mr Cameron said this would be "welcome news", he said it would mean that the government could no longer delay action to tackle the deficit - set to rise to £178bn this year.

Early action was needed on the issue, he said, and the pre-election Budget - expected in March - would be a "test" of whether ministers were serious about cutting spending.

"The government cannot go on hiding from this particularly as it looks like the economy is growing again," he said. "They have no further excuse to delay action except naked political calculation."

The deficit was the "biggest risk" facing the economy, he said.

"The risk is what the government is doing, which is just putting off these decisions until the future. It is like your credit card -- the longer you leave it, the worse it gets."

He said Britain was emerging from the recession later than any other major economy.

Question of judgment

Pressed about Mr Cameron's comments, the prime minister said the government had a "tough" and "detailed" plan to reduce the deficit and had outlined spending cuts and tax rises in the pre-Budget report.

Mr Brown said he was confident the economy was emerging from recession but the lesson of previous downturns was that the economy could relapse if support for growth and jobs was withdrawn prematurely.

"It was my judgement that we had to act quickly and decisively to deal with the recession and I think I have been proven right," he said.

"My judgment about the current situation is that if you withdraw the stimulus too quickly you lose jobs and put the recovery at risk."

The Lib Dems have said that whoever holds power after the election must have a "credible" plan to reduce the deficit.

"The consequences of failure to bring the deficit under control are serious," Treasury spokesman Vince Cable said in a speech on Monday outlining the party's economic policies.

"This cannot be allowed to happen. Let me be clear that bringing stability back to the public finances is an unambiguous commitment."

While the Lib Dems had proposed £10bn more spending cuts than the government, he accepted much more had to be done.

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