We'll make cuts, Brown tells TUC

Mr Brown said he should talk about "the tough truth about the hard choices"

Gordon Brown has admitted for the first time that spending cuts will be needed, in a speech to union leaders.

The prime minister said he would "cut costs, cut inefficiencies, cut unnecessary programmes and cut lower priority budgets".

But he said Labour would not "support cuts in the vital front-line services on which people depend".

The Tories say he had made a "grudging admission" on cuts. The Lib Dems have urged "serious proposals" to cut debt.

In a speech to the TUC in Liverpool Mr Brown said "hard choices" were needed.

'Tough choices'

He added that as Britain moves "into a full recovery we will invest and grow within sustainable public finances - cutting costs where we can, ensuring efficiency where it's needed, agreeing realistic public sector pay settlements throughout, selling off the unproductive assets we don't need to pay for the services we do need".

In the wide-ranging 35-minute speech on the economy he also said he would be "demanding that internationally we look at setting limits on city bonuses".

The "C" word concession was not the big message in his speech to the TUC. It was, instead, the U-turn needed to allow that message to be heard Nick Robinson BBC political editor Read Nick's thoughts in full In full: Brown TUC speech Send us your comments

He said, "when the recovery comes" a Labour government would "continue to raise the minimum wage every year" and got a round of applause from union delegates when he said he would be "arguing that we should implement a blacklist on uncooperative tax havens".

Mr Brown also said from April 2011 fathers would get the right to take up to six months' paternity leave, six months after their child was born, if the mother decided to return to work.

Mr Brown said voters faced a choice between Labour, which would "protect and improve your front line services" and the Conservatives, who would "reduce public services at the very time they are needed most".

Mr Brown later flew to Paris for talks with French President Nicolas Sarkozy ahead of a meeting of EU leaders in Brussels on Thursday - itself a precursor to the G20 summit in the US later this month.

The BBC's Political Editor Nick Robinson said Mr Brown would be making the same arguments abroad as he had done in Liverpool, namely that continued government intervention and support was required to keep the recovery on track.

Exit schemes

Union leaders have warned of possible strikes if public sector jobs are put at risk and there were some stony faces in the audience as Mr Brown gave his speech.

Some delegates held up "no cuts" posters.

Tony Woodley, the joint secretary of the Unite union, told the BBC Mr Brown had shown he was "on top of the game" and had said he would not cut costs that would affect frontline services. "I think Gordon Brown's got it absolutely right here," he said.

They have completely collapsed and are in full retreat George Osborne Conservatives We won spending row - Osborne Analysis: Strikes ahead? Stephanie Flanders on cuts

But Mark Serwotka, head of the PCS union, said he "wasn't very impressed" and was particularly concerned about Mr Brown's pledge to reform "Whitehall early exit scheme payouts for early retirement".

He told the BBC it meant Mr Brown was "going to get rid of people on the cheap" and said there was "not much for me to smile about or more importantly, six million public sector workers".

'Grudging admission'

Public spending is set to be a major issue in the run-up to the next election as the government defends its plans to halve its budget deficit - expected to reach £175bn this year - within four years.

The Conservatives have claimed that spiralling debt levels will force Labour to push up interest rates and taxes and do long-lasting damage to the economy.

The prime minister clearly has had to change tack Vince Cable Liberal Democrats Give detail on cuts, say Lib Dems Economy 'growing again'

Shadow chief secretary to the Treasury Philip Hammond said the prime minister had been forced into a "grudging admission" that cuts would have to be made.

"What we still didn't quite hear is an overall recognition that there will have to be cuts in the total of public spending, as his own Budget published in April predicts," he told the BBC.

"Nonetheless, he is there. Finally, after spending months denying that a Labour government would have to implement cuts, months trying to pretend that there wasn't a problem, he has finally been forced into a U-turn of sorts."

Liberal Democrat Treasury spokesman Vince Cable told the BBC: "The prime minister clearly has had to change tack - he must have been the last person in Britain to recognise that there has to be a proper detailed approach to the problem of public sector cuts. The public are ahead of the politicians on this."