Saturday, 6 February 2010

Tories to Slash Public Spending if they become the government

By Sunil Patel

Shadow Chancellor George Osborne has said that if the Conservatives win this summer’s general election they could immediately slash public spending.

Cutting the colossal £178bn budget deficit is one of key aims for the Conservatives if they secure power and Osbourne would be willing to cancel Labour’s 2010/11 budget spending plans, in favour of more prudent spending plans, within days of coming into office.

Advertising, consultants, tax credits for people earning more than £50,000 and child trust funds have all been earmarked to receive deep budget cuts.

Mr Osborne said, “Delay in cutting back spending could damage the UK’s credibility on the international markets, pushing up interest rates and making mortgages more expensive.

He added, “The message could not be clearer – if you find yourself on the wrong road, you take the first available exit instead of carrying on.”

Health and education would be the only two department budgets to be ring-fenced from Tory spending cuts.

The Tories have backed a Swedish government model which achieved around 11-12 per cent cuts across all departments to address a public deficit reduction during their recession in 1990.

The Shadow Chancellor made his joint statement at London School of Economics, December 14, with Finance Minister Anders Borg the architect behind the Scandinavian model.

He warned, there was a “clear and present danger” that the long-term health of the British economy was threatened by government’s inability to sort out the public finances.

Mr Borg said “I agree with him, and the international consensus that acting early helps to establish credibility.

He added “Fiscal consolidation in countries with weak public finances needs to begin as soon as possible. The longer one waits with the heavy lifting, the more difficult it becomes.”

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