Page last updated at 11:09 GMT, Thursday, 25 February 2010

Osborne - I'll be 'straight' with public on cuts

George Osborne: "Our ambition is nothing less than a new economic model for Britain"

Shadow chancellor George Osborne has said a Conservative government will always be "straight" with the public about its plans to cut spending.

Mr Osborne told the BBC that unless the UK started to tackle its deficit, its economic policy would increasingly be "driven" by the financial markets.

The deficit, expected to be one of the key themes of the general election, is expected to rise to £178bn this year.

Labour and the Lib Dems say cuts could force the economy back into recession.

'False choice'

In a major speech in London on Wednesday, Mr Osborne said the Conservatives would work "flat out" to deal with the deficit, saying there was "no choice" if the UK wanted to return to "meaningful growth"

In the Mais lecture, he said Labour did not have a "credible" plan to deal with the deficit and this risked "sapping" confidence in the economy.

He denied the Conservatives' spending plans were short on detail, saying he had pledged to reduce the public sector pensions bill and the cost of Whitehall bureaucracy, as well as increase the pension age.

"There will not be token cuts. There will be real cuts but there will not be swingeing cuts," he told the Today programme.

Whoever wins the election would have to cut spending and those saying otherwise were presenting a "false choice" to voters, he said.


"Whatever people will say about our economic policy, let me say we will tell people straight the problems the country faces and the principles and approach we will take to putting it right."

Mr Osborne acknowledged that economists took different views about when to start cutting spending and how quickly.

But he said he agreed with recent comments by shadow business secretary Ken Clarke that the next government would have to be "tougher" on spending than Margaret Thatcher was in the early 1980s.

"Whoever wins the election, Labour or Conservative, is going to have to cut spending. That is not something that Margaret Thatcher actually did. So tougher than Margaret Thatcher.

"But that is true of a re-elected Labour government as well as a new Conservative government."

The Tories have said they would hold an emergency budget within 50 days of being elected and carry out on an independent audit of the public finances before then.

Mr Osborne said he would not "shy away" from tough decisions on spending but would do it a "careful and co-ordinated" way.


If the next government did not act quickly after the election, he said the UK - like Greece - risked losing the confidence of the financial markets and its own ability to control events.

"A new government has to send the signal that Britain is open for business and we will deal with our economic problems in our own terms. We will not be pushed there by the markets."

The government, which has promised to halve annual borrowing within four years, has accused the Conservatives of hiding their true intentions about spending cuts.

Chief Secretary to the Treasury Liam Byrne said Mr Osborne wanted to "start cutting support to economy now at the expense of jobs and public services."

The Lib Dems have said the Conservatives' call for spending cuts this year is driven by "political dogma" not economic need.

"Slashing spending now could push the economy back into recession and inflict further structural damage on the UK that will make it harder to sustain our credit rating," its Treasury spokesman Vince Cable said.

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