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We'll have to cut costs - Darling We'll have to cut costs - Darling
(about 5 hours later)
The government will have to start "cutting costs" as it deals with the effects of the recession, Chancellor Alistair Darling is expected to say. The government will have to start "cutting costs" as it deals with the effects of the recession, Chancellor Alistair Darling will say in a speech.
He will tell business leaders that ministers will "not flinch" from a series of "hard choices" over spending. Ministers will "not flinch" from "hard choices" on spending but must still commit to "fairness," he will say.
But Labour must still commit to "fairness", he will say in a speech. But ahead of the speech he told the BBC he would not be announcing details of public spending plans.
The Tories claim that the government's stated aim of cutting its spending deficit by half in four years is based on little more than "hope". The Tories have accused Labour of not being honest about planned cuts in previous rows on public spending.
In April's Budget, Mr Darling forecast that public borrowing this year would reach £175bn. And the party says the government's stated aim of cutting its spending deficit by half in four years is based on little more than "hope".
The issue is becoming one of the key areas of contention in the lead-up to the next general election. Pre-election row
BBC political correspondent Gary O'Donoghue said the speech marked the start of a shift in emphasis by Labour about its spending plans - which Gordon Brown has repeatedly portrayed as continued investment in contrast to Conservative "cuts".
In April's Budget, Mr Darling forecast that public borrowing this year would reach £175bn and arguments about how that figure will be reduced are set to dominate the political agenda in the run-up to the general election.
But, ahead of the speech, Mr Darling told BBC Radio Wales any detailed public spending announcements would be announced in Parliament, not in his speech.
Gordon Brown and I have spoken of the hard choices needed in public spending over the coming years Alistair DarlingGordon Brown and I have spoken of the hard choices needed in public spending over the coming years Alistair Darling
The Conservatives argue that Labour's economic stimulus package is costing too much and damaging public finances. He said Labour thought government could be a force for good, while the Conservatives "instinctively take an opposite view".
They also say that the government is being dishonest about its need to make Budget cuts in order to rebalance the books. "It's for us to spell out more clearly where we stand," he said.
Labour, meanwhile, says the Conservatives would make swingeing reductions to key services if they gained power. "What I'm saying today is that I think the government can make a difference. It also means there are some areas where you might not be able to do everything you want to do today, you might have to do that further down the line."
In a speech in Cardiff, part of the Chambers of Commerce Business Week, Mr Darling will say a "well-managed and targeted public investment" is needed. Test of character
In his speech in Cardiff, part of the Chambers of Commerce Business Week, Mr Darling will say "well-managed and targeted public investment" is needed.
He will add: "Gordon Brown and I have spoken of the hard choices needed in public spending over the coming years.He will add: "Gordon Brown and I have spoken of the hard choices needed in public spending over the coming years.
"We won't flinch from the difficult decisions that will be necessary, and we will always act guided by our core values of fairness and responsibility."We won't flinch from the difficult decisions that will be necessary, and we will always act guided by our core values of fairness and responsibility.
"This will be our test of character. Properly targeted public investment can and should make a difference."This will be our test of character. Properly targeted public investment can and should make a difference.
"That means making choices and setting priorities - shifting resources to the front line. It means more efficiency, continuing to reform, cutting costs, public and private sectors working together.""That means making choices and setting priorities - shifting resources to the front line. It means more efficiency, continuing to reform, cutting costs, public and private sectors working together."
On Sunday, Liam Byrne, the Chief Secretary to the Treasury, said the government wanted to halve the UK's Budget deficit within four years. The Conservatives argue that Labour's economic stimulus package is costing too much and damaging public finances.
The Conservatives say this is based on "hope" of the recession ending, creating an increase in tax revenue. They also argue that the UK has to live "within its means". They also say that the government has been dishonest in not admitting it will need to make Budget cuts in order to rebalance the books.
The British Chambers of Commerce has raised its economic forecast for 2010, with growth of 1.1% expected in 2010 - almost double the prediction of 0.6% made in June. The Liberal Democrats say both of the main parties need to be more honest about the fact that "big programmes" will have to be cut back.
Leader Nick Clegg said last month he recognised "serious savings" had to be made to bring the public finances under control but said frontline services had to be protected.