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| Labour 'must not lose its nerve' | Labour 'must not lose its nerve' |
| (10 minutes later) | |
| The government must not "lose our nerve" in dealing with the recession, Lord Mandelson has said. | The government must not "lose our nerve" in dealing with the recession, Lord Mandelson has said. |
| The business secretary added that Labour should have "the mindset of insurgents who are restless with the status quo, not incumbents". | The business secretary added that Labour should have "the mindset of insurgents who are restless with the status quo, not incumbents". |
| The Conservatives have accused the government of "reckless" spending, but the business secretary said Labour was not "oblivious to economic conditions". | The Conservatives have accused the government of "reckless" spending, but the business secretary said Labour was not "oblivious to economic conditions". |
| In his speech, he said Labour were now the "underdogs" but would "fight back". | In his speech, he said Labour were now the "underdogs" but would "fight back". |
| His speech at the London School of Economics came amid debate about how the government is aiming to halve its budget deficit - expected to reach £175bn this year - within four years. | His speech at the London School of Economics came amid debate about how the government is aiming to halve its budget deficit - expected to reach £175bn this year - within four years. |
| 'Restraint' | 'Restraint' |
| The level of public spending looks set to be a major issue in the run-up to the next general election. | The level of public spending looks set to be a major issue in the run-up to the next general election. |
| The Tories say it must be reduced now to cut government debt, while Labour says the Conservatives' attitude would damage frontline public services. The Lib Dems say "big ticket" items need to be rethought. | The Tories say it must be reduced now to cut government debt, while Labour says the Conservatives' attitude would damage frontline public services. The Lib Dems say "big ticket" items need to be rethought. |
| FROM THE TODAY PROGRAMME More from Today programme | FROM THE TODAY PROGRAMME More from Today programme |
| Lord Mandelson said that, after 1997, Labour had a "necessary period of catch-up in public service provision" but added that this was not an "eternal doctrine" the party had to keep following. | |
| He added: "Our 1997 manifesto described the New Labour approach as being 'wise spenders, not big spenders'. | |
| "This is and remains a core New Labour principle. We do not believe that we should try to solve problems simply by throwing money at them. We need to be 'effective state' social democrats, not 'big state' social democrats." | "This is and remains a core New Labour principle. We do not believe that we should try to solve problems simply by throwing money at them. We need to be 'effective state' social democrats, not 'big state' social democrats." |
| He said that Labour's investment since it gained power had made "higher productivity and higher standards possible even in a period of public spending constraint". | |
| 'Delivery' | 'Delivery' |
| Attacking the Conservatives, the business secretary said David Cameron's party wanted "deep, savage, indiscriminate, across-the-board spending cuts". | Attacking the Conservatives, the business secretary said David Cameron's party wanted "deep, savage, indiscriminate, across-the-board spending cuts". |
| He added that Labour would try to create economic conditions which would "enable us to maintain frontline service delivery". | He added that Labour would try to create economic conditions which would "enable us to maintain frontline service delivery". |
| Lord Mandelson's comments came as the TUC's annual congress got under way in Liverpool, with unions warning that cuts would mean mass public sector redundancies. | Lord Mandelson's comments came as the TUC's annual congress got under way in Liverpool, with unions warning that cuts would mean mass public sector redundancies. |
| We do not believe that we should try to solve problems simply by throwing money at them Business Secretary Lord Mandelson TUC rejects claims of recovery | We do not believe that we should try to solve problems simply by throwing money at them Business Secretary Lord Mandelson TUC rejects claims of recovery |
| TUC general secretary Brendan Barber said slashing public spending would cause a "double-dip" recession, leaving up to four million people unemployed. | TUC general secretary Brendan Barber said slashing public spending would cause a "double-dip" recession, leaving up to four million people unemployed. |
| Speaking earlier on BBC Radio 4's Today, Lord Mandelson did not use the word "cuts" to describe the government's approach to public spending. | Speaking earlier on BBC Radio 4's Today, Lord Mandelson did not use the word "cuts" to describe the government's approach to public spending. |
| But he said: "It will mean switching resources from lower to higher priority areas which do meet the new challenges. I can't be clearer than that... | But he said: "It will mean switching resources from lower to higher priority areas which do meet the new challenges. I can't be clearer than that... |
| "Everything is going to have to be examined." | "Everything is going to have to be examined." |
| Asked about whether Trident nuclear deterrent scheme and plans for ID cards could be cancelled as part of Labour's savings programme, Lord Mandelson said nothing had been decided or ruled out. | |
| However, he said it was not certain "that the assumptions that some people are making about savings that those big projects would offer would actually come about in reality. | |
| HAVE YOUR SAYIf the government cannot balance the books it must spend less and that means cuts in the public sectorJohn, Stafford Send us your comments | HAVE YOUR SAYIf the government cannot balance the books it must spend less and that means cuts in the public sectorJohn, Stafford Send us your comments |
| "I've seen some rather different figures related to the savings that would arise from cancelling those projects which don't make the contribution that some people imagine." | "I've seen some rather different figures related to the savings that would arise from cancelling those projects which don't make the contribution that some people imagine." |
| For the Conservatives, shadow Treasury minister Philip Hammond told Today that Labour had been "reckless" in its spending. | For the Conservatives, shadow Treasury minister Philip Hammond told Today that Labour had been "reckless" in its spending. |
| He said: "You don't pour money in indiscriminately and then afterwards ask people to change their working practices." | He said: "You don't pour money in indiscriminately and then afterwards ask people to change their working practices." |
| Speaking about his own party's plans, Mr Hammond said: "This is not an agenda... of indiscriminate slash and burn. | Speaking about his own party's plans, Mr Hammond said: "This is not an agenda... of indiscriminate slash and burn. |
| "It's an agenda of precise surgical intervention to try to improve the way public services are delivered." | "It's an agenda of precise surgical intervention to try to improve the way public services are delivered." |