Page last updated at 18:13 GMT, Thursday, 19 February 2009

Brown 'buying votes,' says Clarke

Ken Clarke
Mr Clarke said public spending growth should be slowed

Shadow business secretary Ken Clarke has accused Gordon Brown of trying to "buy votes" by delaying a spending slowdown until after the next election.

He said the prime minister should rein in spending now to deal with "staggering" levels of public debt.

It comes as figures show a huge fall in the government's tax income as the recession bites.

Treasury minister Angela Eagle said bringing forward public spending was the right way to fight the downturn.

Mr Clarke, who was chancellor between 1993 and 1997, was speaking after new figures showed tax takings dropped 7bn in January - traditionally a good month for the public finances which are bolstered by annual tax receipts.

Restraint call

He said Chancellor Alistair Darling should take action: "He should be slowing down the growth of public spending to the levels he's admitted he's going to have to reduce them to the year after.

"I'm sure Gordon Brown told him, 'no, no, no more restraint in public spending on top of what we've already done this side of an election'. Gordon wants to buy a few votes.

"But the voters are going to have to pay the interest on all this mounting debt. This is a time for public sector restraint."

The man is living in a world of fantasy
Ken Clarke
Shadow business secretary

Government borrowing for the full financial year is also now expected to exceed its own forecasts of 77bn.

The Office for National Statistics said net borrowing between April and January had already reached 67.2bn and said bank bail-outs could add up to 1.5 trillion to the national debt.

Mr Clarke said government projections on when debt levels would return to normal, announced in last year's pre-Budget report, had been "dead on arrival".

'Slash and burn'

He accused the government of "burning through more money" with a "frenetic series of measures" before Christmas - but said bank lending was still frozen.

And he said public finances had been in "a terrible state" before the credit crunch: "I have been driven completely crazy by reports of the prime minister going round the world saying we wouldn't have a problem if only every other finance minister had behaved as he behaved when he was chancellor. The man is living in a world of fantasy."

Our national debt remains substantially lower than is the case in many other countries
Gordon Brown

For the government Ms Eagle said it was important to return "in the medium term" to sustainable public finances but it would make things worse to "slash and burn" at the beginning of a recession.

She told the BBC: "What would be a disaster is to cut public expenditure now, that's why we brought forward the extra 3bn of capital expenditure.

"So, yes we are unashamedly sustaining public expenditure at a time when there's a global economic downturn to support the economy."

Speaking earlier at a joint press conference in Milan with Italian PM Silvio Berlusconi, Mr Brown defended Britain's levels of debt claiming it was one of the lowest of the major economies at 40% of national income.

"That is substantially lower than Germany, and France and America and Japan and Italy. So I can just say to you while every country is having to borrow to invest in the future, our national debt remains substantially lower than is the case in many other countries," he said.

He added that he hoped the industrialised nations would reach an agreement in April at the G20 summit in London.

"I believe that if each continent can work together to restore the financial system, to inject resources into their economies and to agree that the international institutions have got to take even greater responsibilities for action, then we will see a global bargain at the April G20 meeting that will speed up the recovery of the world economy."

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