Page last updated at 10:08 GMT, Friday, 24 April 2009 11:08 UK

Crisis requires change - Cameron

David Cameron
Ministers must get to grips with public spending now, Mr Cameron said

Britain must be prepared for a "major culture change" if the crisis in the public finances is to be tackled, David Cameron has said.

The Conservative leader said government would have to operate differently if the "horrific deficits" announced in Wednesday's Budget were to be tackled.

He was prepared to take tough decisions on public spending, in contrast with Labour's "dishonest" approach.

Labour said the Conservatives would cut spending now, prolonging the recession.

'Dishonest'

The Institute of Fiscal Studies says the UK is set for the sharpest fall in real public spending since the 1970s as the government seeks to bring the public finances back into balance by 2018.

The independent think-tank forecast overall public spending would fall by 0.1% annually in real terms from 2011 to 2014.

Chancellor Alistair Darling said on Wednesday borrowing would total nearly £600bn in the next four years but defended the levels as necessary to support the economy through the recession.

He has said tough decisions will have to be taken on public spending - he has said growth in public spending will slow to 0.7% next year - but has not accepted that there will be cuts in frontline services after 2011.

Mr Cameron told BBC Radio 4's Today programme the chancellor had been "dishonest" about the realities of the economic situation and his growth forecasts, on which the government is basing its public spending plans, were "probably junk".

FROM THE TODAY PROGRAMME

His comments came ahead of figures showing the economy shrank 1.9% in the first three months of the year - the sharpest quarterly decline since 1979.

Ministers needed to "roll up their sleeves" and get to grips with the task of reducing the growth in public spending now.

"The success or failure of a Conservative government, if one is elected, is going to be whether we deal with this enormous problem that we have," he said.

"It means the whole way the government operates is going to have to change. It means ministers actually being rewarded on the basis of how they can save money rather than spend it."

'Culture change'

Mr Cameron said the Conservatives had identified three areas in which savings should be made.

Projects such as the ID cards scheme and the Contact Point child protection database should be scrapped, the tax credit system should be scaled back and the pay of the public sector "quangocracy" needed to be tackled.

What David Cameron is talking about is making cuts in people's budgets that they've got now for this year
Yvette Cooper, Chief Secretary to the Treasury

He would not be drawn on other potential spending cuts that would be needed if the Tories came to power.

But he said there would have to be a "massive culture change" in the UK as the government strived to get "more for less" out of the public services.

"The British public is going to want a lot more transparency about where their money goes," he stressed.

Treasury Secretary Yvette Cooper said Labour had been upfront about the need to seek billions of pounds more in efficiency savings.

She attacked Mr Cameron's call for greater public spending restraint now, saying budgets for frontline services for the next two years must be "honoured".

"What David Cameron is talking about is making cuts in people's budgets that they've got now for this year, in the middle of a recession," she told BBC News.

"It would be bad for public services and it would be bad for the economy. The recession would last longer and cost us more."

Poll boost

Meanwhile, the row over the government's plan to raise income tax for high-earners - breaking a manifesto pledge from 2005 - continues to rumble on.

Mr Cameron said he opposed the 50p tax rate for those earning more than £150,000 but it would have to take its place "in the queue" of tax changes the Conservatives wanted to make.

London Mayor Boris Johnson and some other Tories have called on the party to scrap the 50p rate but the leadership have said this would not be a priority and they want to focus reducing the tax burden for those on low and middle incomes.

Conservative MP Peter Luff told the Financial Times the 50p tax plan was "a trap" set by Gordon Brown.

Yvette Cooper denied the move was motivated by a desire to destabilise the opposition, saying it would raise "significant sums" to support the economy.

Labour received an opinion poll boost earlier, as Gordon Brown and Alistair Darling regained their lead over David Cameron and George Osborne as the team most trusted on the economy.

A survey conducted after the Budget for Friday's edition of BBC2's Daily Politics showed their rating of 34% - up from 28% since 1 March.

But the same ComRes poll of 1,008 voters, suggested most people think the Budget will not make any difference.



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