George Osborne vows to cut public spending immediately

George Osborne warned delaying cuts could damage the UK's credibility

The Conservatives would start to cut public spending straight away if they won the General Election, shadow chancellor George Osborne has said.

Speaking at the London School of Economics, he said spending on advertising and tax credits for people earning more than £50,000 would be cut.

He also identified child trust funds for better-off families as an area where savings could be made.

Labour and the Lib Dems said Tory plans would put economic recovery at risk.

Mr Osborne's speech signalled the first time the Conservatives have said cuts would be made in the new financial year, which starts in April, if they come into power.

'Excessive spending'

He told the audience: "Everyone knows the government's spending plans for next year are driven by a looming General Election and not economic reality.

"So, with the date of the general election increasingly likely to be after the beginning of the next financial year, that means we will need to make early in-year reductions in existing plans.

"Programmes that represent poor value for money, excessive spending on things like advertising and consultants, spending on tax credits for people earning over £50,000, and spending on child trust funds for better off families will all have to be cut during the financial year."

The shadow chancellor also warned there was a "clear and present danger" the government's failure to signal early measures to shore up the public finances would dent confidence in British economic policy.

He said delaying cuts could damage the UK's credibility on the international markets, pushing up interest rates and making mortgages more expensive.

There's a big risk that if cuts begin suddenly and on a purely political basis that the economy will be plunged back into prolonged recession Vince Cable, Lib Dem Treasury spokesman

Responding to the speech, Chief Secretary to the Treasury Liam Byrne said in his "rush to cut spending, George Osborne would put the recovery in grave danger".

"But until he says how he'll do it and whether he'll match Labour's pledge to halve the deficit in four years, his speeches must be taken with a huge pinch of salt.

"This is yet another Tory speech which raises more questions than it answered," said Mr Byrne.

Liberal Democrat Treasury spokesman Vince Cable said it was "foolish to set a political timetable with no regard for the state of the economy".

"There's a big risk that if cuts begin suddenly and on a purely political basis that the economy will be plunged back into prolonged recession."

He said a set of clear economic tests, including economic and employment growth, was needed to judge when contraction or acceleration of spending should begin.