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Thursday, 26 April, 2001, 15:12 GMT 16:12 UK
Hague on warpath over economy
William Hague makes his speech on Thursday
Mr Hague believes Britain is vulnerable to a downturn
Tax cuts and a war on red tape will form the central planks of a future Conservative government, William Hague has said.

The Tory leader has used a speech in London to outline a vision of smaller government and deregulation.


We're in bad shape to hold our own in an economic downturn

William Hague
Mr Hague denounced the government's economic record, accusing Labour of leaving Britain ill-prepared for a global recession.

Labour has responded to the speech by saying a Tory government would return Britain to economic "boom and bust".

In his address Mr Hague warned that Labour's failure to cut taxes and reform the welfare system, while imposing increasing burdens on business, had left the British economy exposed.

The speech to the right-wing think tank the Centre for Policy Studies comes just days after Chancellor Gordon Brown said Britain was well placed to weather a slowdown.

Election tactic

It will be seen as a concerted effort to rob Labour of its claim to be the best manager of the economy.

The government's economic record is widely seen by Labour strategists as a strong card to play in the forthcoming general election campaign.

But there are suggestions that the nation's economic confidence has taken a knock.

Only 15% of respondents to an NOP survey for ITN expect to be better off under Labour over the next 12 months, compared with 32% six weeks ago - a sign that the "feelgood factor" may be under strain.

Mr Hague challenged Mr Brown's claim to be a "prudent" chancellor.

"We're in bad shape to hold our own in an economic downturn.

"Rather than plotting a course for stability, Gordon Brown is following an imprudent path in an uncertain world," he said.

Chancellor Gordon Brown
Mr Brown believes Britain will weather a downturn
Mr Hague said that a downturn would cast the government's policies in a "revealing light" as investors scrambled to decide where was the best place to put their money.

He conceded that Britain under Labour had profited from a "phase of international stability and prosperity", but warned about turbulent times ahead.

Mr Hague identified four causes of concern for the British economy.

  • The loss of confidence in the American economy.

  • Reluctance of the European Central Bank to lower interest rates.

  • "Real turbulence" felt by stock markets.

  • "Far-reaching" economic effects of the foot-and-mouth crisis.

    In contrast to Gordon Brown's recently stated confidence that he would "steer a course of stability through the ups and downs of the economic cycle", Mr Hague warned that the country was facing "a critical period of uncertainty".

    Policies

    Noting that policy differences between governments "are all but submerged" in times of economic prosperity, he attempted to set out a series of distinctive measures for the forthcoming election.

    Matthew Taylor
    Mr Taylor: "Tory plans simply don't add up."
    Echoing his political heroine and former Tory leader Margaret Thatcher, Mr Hague said: "Government that grows year after year does so at the expense of families, communities and institutions.

    "So when we say we want to cut taxes, that is not only an economic argument, but one that goes to the heart of the difference in philosophy between us and Labour."

    It is the first time Mr Hague has made a speech directly on the current global economic situation, but Tory aides signalled it was the "opening shot" in a sustained assault on Labour's record on the economy.

    Claims dismissed

    But chief secretary to the Treasury Andrew Smith rejected the criticism and said a Tory government would return Britain to "boom and bust".

    "With independence for the Bank of England, one million more people in work and inflation, long-term interest rates and unemployment at their lowest levels for a generation, the contrast with the Tories' plans could not be clearer," he said.

    Liberal Democrat treasury spokesman Matthew Taylor said: "The Conservatives' plan to cut taxes means they will inevitably cut funding for schools, hospitals and pensions to pay for it or run up an unsustainable deficit which would wreck the economy - both of which they did before."

    He added: "Tory plans simply don't add up."

  •  WATCH/LISTEN
     ON THIS STORY
    The BBC's political correspondent Guto Harri
    "William Hague has to score points on this key issue"

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    See also:

    24 Apr 01 | Business
    24 Apr 01 | Business
    21 Apr 01 | UK Politics
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