Page last updated at 12:25 GMT, Friday, 17 April 2009 13:25 UK

Osborne plans big spending curbs

George Osborne
George Osborne says Labour's spending plans are unaffordable

A Conservative government would clamp down on spending to tackle the "atrocious" state of the UK's public finances, George Osborne has said.

The shadow chancellor told the FT Labour's planned 1.1% a year spending increase was "unaffordable".

But he said spending cuts rather than tax rises were the best way to tackle the UK's biggest peacetime deficit.

And he called on Chancellor Alistair Darling to come clean about the scale of the problem in next week's Budget.

Mr Darling is likely to unveil some limited spending cuts in the Budget but plans for a full scale comprehensive spending review are thought to have been shelved.

'Difficult decisions'

The Tories say the government's existing spending plans, which project real terms growth of 1.1% a year from 2012 to 2014, are "unsustainable" and they accuse Labour of failing to be honest with voters about the sort of cuts that will be needed.

In the clearest indication yet of Conservative spending priorities, Mr Osborne told the FT: "I am clear that the 1.1% is not sustainable.

Next week's Budget will be a Budget about jobs
Prime Minister Gordon Brown

"I've mentally adjusted myself and [Conservative leader] David Cameron has mentally adjusted himself to the fact that we are going to have to take some very difficult decisions for the good of the country."

He said spending cuts, rather than tax rises, would be used to plug the gap in the public finances, telling the newspaper: "You don't want to kill off the recovery with heavy tax rises that bring you back to square one."

The Conservatives have already ditched their commitment to stick to Labour's spending plans in the face of worsening economic conditions.

They say they are prepared for Labour attacks on "Tory cuts" at the next general election, saying they want to be honest with the public about their plan to spend £5bn less than Labour.

'Plenty of opportunities'

But they are not expected to reveal detailed proposals on the areas where any cuts will fall, beyond saying that health, schools, defence and international development will be protected from cuts in 2009 and 2010.

For 2010 to 2011 they only have two commitments - to real terms increases in health spending and matching Labour's 2013 target for 0.7% of GDP to be spent on overseas aid.

Prime Minister Gordon Brown has, meanwhile, been talking up next week's Budget, which was delayed by the G20 summit, as a green Budget and "Budget for jobs".

On Thursday, he told an audience in Glasgow, where the Cabinet was meeting: "Our aim throughout is to get people back into jobs as quickly as possible and to prevent jobs going, to help school leavers this year and people leaving college and universities to get the jobs or training they need.

"Next week's Budget will be a Budget about jobs."

The promise came at an event where Business Secretary Lord Mandelson declared that people should stop being "so darned pessimistic" about Britain's future.

Despite the recession, Mr Mandelson insisted there were still "plenty and plenty of opportunities" and he complained people were focusing on the negatives instead of looking on the "up side".

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