Page last updated at 09:26 GMT, Thursday, 11 June 2009 10:26 UK

Spending row 'juvenile' - Tories

Hammond: 'This is a Labour-created problem'

The Conservatives have once again dismissed Labour claims they have "let the cat out of the bag" on plans for large public spending cuts.

Shadow chief secretary to the Treasury Philip Hammond said "something had to give" on spending and the public wanted an end to "juvenile" rows about it.

His Labour opposite number, Liam Byrne, conceded Labour would also have to make "painful choices" on tax and spending.

But he insisted overall spending would continue to grow under Labour.

He told BBC Radio 4's programme: "Between now and 2013/14, public spending will rise by £86bn but if we make a series of very difficult choices on, for example, tax and, for example, on efficiencies, we can halve the budget deficit over the course of five years.

"Now, does that involve painful choices, I'm afraid it does but what we are saying is that we are not going to cut widely and deeply and now as the Conservatives propose because we think that would be bad for public services and bad for the country."

'Not in trouble'

Mr Byrne claimed shadow health secretary Andrew Lansley had been threatened with the sack by Tory leader David Cameron after he "let the cat out of the bag" on Tory spending plans.

In a Today interview on Wednesday, Mr Lansley appeared to suggest that, in order to protect "priority" spending on the NHS and schools, a future Conservative government would cut expenditure in other areas by a total of 10% between 2011-5.

what the public want is for us to stop this sterile, rather juvenile debate and start talking about how we are going to deal with this very difficult period for public spending
Philip Hammond, Shadow chief secretary to the Treasury

But Mr Hammond insisted his frontbench colleague was not facing the sack.

"I don't think he is in trouble," he said but added: "Andrew Lansley himself said he could have been clearer."

He said Mr Lansley had been referring to Labour's own figures from the last Budget, which showed departmental spending - rather than the overall headline public spending figure - will be cut by 7% in real terms from next year.

He said the Conservatives had taken a decision to protect health spending - something he said Labour had not done and he said that Labour were also planning to cut the capital spending budget - money for new schools and hospitals - in half.

'Chaos'

He accused the government of being dishonest by saying it would not cut public spending.

"Something has got to give and what the public want is for us to stop this sterile, rather juvenile debate and start talking about how we are going to deal with this very difficult period for public spending in a way that minimises the impact on front line public services."

Stephanie Flanders
If this is a sign of things to come in the debate on public spending then we're in for a pretty miserable year
Stephanie Flanders
BBC economics editor

Mr Byrne denied Labour would have to make similar cuts if it prioritised health spending in the way the Conservatives had - and he claimed Tory plans were in "chaos" because they were committed to inheritance tax cuts for "millionaires".

Independent experts believe cuts will happen whoever wins the next election, but at this stage neither the Conservatives or Labour have spelled out their detailed spending plans beyond 2011.

In its Budget analysis in April, the respected Institute of Financial Studies said the country faced "two parliaments of pain" as the next government had to reduce debt levels and bring the public finances under control after the damage caused by the banking crisis and recession.

It said there was £90bn "black hole" in the public finances and it would cost £2,480 in higher taxes or spending cuts per family to bring the budget back into balance.

Labour disputed this figure and said the IFS had not understood the full picture. BBC Economics Editor Stephanie Flanders said that "the government's own numbers imply a 10% real cut in spending on other departments between 2011 and 2013 if the NHS and DFID are protected".



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