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01/02/2010
Mandelson Blasts Tory Spending Plans
Business Secretary Lord Mandelson has launched a stinging attack on Tory spending proposals, which he claims would "strangle the recovery at birth".
The second highest ranking cabinet figure warned a government led by David Cameron would damage the UK economy by £11 billion.
Mr Cameron and his shadow Chancellor George Osborne have remained resolute over planned spending cuts, which they say are needed to ease the budget deficit.
They have mooted a child tax credit cut, as well as an end to child trust funds for those better off.
The Tory team suggested these moves could release £1 billion into government coffers immediately.
Estimates but the public spending deficit at over £170 billion. This is set to grow throughout the year, and will be a key focus in the run up to a much-speculated May election.
Yesterday, Mr Cameron said cuts could commence soon after he walked into 10 Downing Street.
"We're not talking about swingeing cuts. We're talking about making a start in reducing our deficit," he said.
Labour accused the Opposition Leader of backtracking, after he denounced the government's 2010 spending plans.
Lord Mandelson said: "This is the paradox of government thrift. We learned about it in the 1930s. It seems to be totally lost on the Conservative Party."
He said the Tories would take "£11bn out of the economy in the coming financial year".
"That's the equivalent of more than halving the budget of my department... or cutting investment in health or schools."
Lord Mandelson continued: "Mr Cameron appeared to back down. He appeared to say that the spending cuts would be 'not extensive'. But what does 'not extensive' mean exactly?"
He added: "Quite simply, the Tories would strangle the recovery at birth."
Shadow chief secretary to the Treasury Philip Hammond said the Tory position had not changed.
"We are very clear that a newly-elected government has to send a credible signal about its plans to eliminate the great bulk of that fiscal deficit over the lifetime of the parliament and to start immediately in 2010," he said.
(PR/BMcC)
The second highest ranking cabinet figure warned a government led by David Cameron would damage the UK economy by £11 billion.
Mr Cameron and his shadow Chancellor George Osborne have remained resolute over planned spending cuts, which they say are needed to ease the budget deficit.
They have mooted a child tax credit cut, as well as an end to child trust funds for those better off.
The Tory team suggested these moves could release £1 billion into government coffers immediately.
Estimates but the public spending deficit at over £170 billion. This is set to grow throughout the year, and will be a key focus in the run up to a much-speculated May election.
Yesterday, Mr Cameron said cuts could commence soon after he walked into 10 Downing Street.
"We're not talking about swingeing cuts. We're talking about making a start in reducing our deficit," he said.
Labour accused the Opposition Leader of backtracking, after he denounced the government's 2010 spending plans.
Lord Mandelson said: "This is the paradox of government thrift. We learned about it in the 1930s. It seems to be totally lost on the Conservative Party."
He said the Tories would take "£11bn out of the economy in the coming financial year".
"That's the equivalent of more than halving the budget of my department... or cutting investment in health or schools."
Lord Mandelson continued: "Mr Cameron appeared to back down. He appeared to say that the spending cuts would be 'not extensive'. But what does 'not extensive' mean exactly?"
He added: "Quite simply, the Tories would strangle the recovery at birth."
Shadow chief secretary to the Treasury Philip Hammond said the Tory position had not changed.
"We are very clear that a newly-elected government has to send a credible signal about its plans to eliminate the great bulk of that fiscal deficit over the lifetime of the parliament and to start immediately in 2010," he said.
(PR/BMcC)
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