14/01/10 - Cllr Tomlinson Welcomes Conservative Plans To Tackle Deficit

The Conservatives are serious about paying down the record £178 billion deficit and will contrast their stance with Labour's refusal to look again at Whitehall spending plans for the coming year.  Gordon Brown and Alistair Darling, the Chancellor, have set the departmental spending budgets for 2010-11. Despite pressure from the Conservatives they have refused to reduce them in light of the deficit.

In a City lecture Conservative, Shadow Chancellor, George Osborne said: “The message could not be clearer – if you find yourself on the wrong road, you take the first available exit instead of carrying on.

“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.”

He added that the Tories needed to show they were willing to start cutting costs immediately.

He said: “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 2010/11 financial year will have begun if the election is held on the most likely date of May 6.

The Conservative statement is likely to lead to Whitehall civil servants thinking carefully about what spending they should commit to if they are going to face cuts later in the year after an expected Tory election victory.

Mr Osborne warned that unless action was taken to pay down the deficit Britain faced severe consequences.

He said: “There is a clear and present danger that the world will lose confidence in Britain’s economic policy. That would push mortgage rates up, more businesses would go bust and the recovery would be undermined.”

He added: “Total spending is planned to go up by £31 billion in nominal terms, or by more than 2 per cent in real terms. During a period when the Treasury expects the economy to be growing by at least 2 per cent, and with the largest budget deficit of any developed economy, that is simply not credible.

“Everyone knows that the Government’s spending plans for next year are driven by a looming general election and not economic reality.”

Total government spending is set to rise from £676 billion this year to £707 billion next year.

Mr Cameron this week indicated that he wanted to halt Labour’s planned rise in National Insurance when he comes into power. But that will involve finding money from other budgets.

Cllr Justin Tomlinson, "We can't go on with the same irresponsible economic policies that failed to fix the roof when the sun was shining, giving us the biggest boom and bust, and are now threatening future jobs with more debts, more instability, higher taxes and higher mortgages. Labour's plan to increase public spending during a period when the economy will be growing slowly at best, and with the largest budget deficit of any developed economy, is simply not credible.

Everyone knows that 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.  Some examples of where we could make early changes in order to establish credibility and support a sustainable recovery include: 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. Our planned public sector pay freeze would not begin until 2011.''