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Tories defend debt-cutting plans Osborne denies cuts plan 'gamble'
(21 minutes later)
The Conservatives have been defending their plans to reduce the UK's national debt, set out at the party conference. Shadow Chancellor George Osborne has denied he has taken an electoral gamble by announcing big spending cuts, saying he had to be honest with people.
Shadow chancellor George Osborne told delegates he would freeze public sector pay, cut tax credits for higher earners and raise the retirement age. He has defended plans to freeze public sector pay, cut tax credits for higher earners and raise the retirement age.
Chris Grayling, the shadow home secretary, said Mr Osborne was being honest about what needed to be done. Labour has said the proposals are confused and do not match their pledge to cut the deficit within four years.
But Treasury chief secretary Liam Byrne said the Tories had not matched a government pledge to halve the deficit. Mr Osborne said more savings would have to be found and honesty was needed as the government had "run out of money".
At the Conservative conference in Manchester, the shadow chancellor also outlined plans to target Whitehall costs and axe child trust funds for the better off. He told the BBC that the next government would have to make substantial savings and would need the support of the public to carry them out.
He told the Tory conference "we're all in this together" and said that the measures would save £7bn a year. If you won an election in the current economic climate on a false prospectus then it wouldn't be worth governing George Osborne class="" href="/2/hi/uk_news/politics/8292680.stm">Osborne gambles with cuts plans class="" href="/2/hi/uk_news/politics/8292048.stm">Anger over pay freeze 'politics' class="" href="/2/hi/uk_news/politics/8293163.stm">Analysis: Osborne's gamble
Pension cap "I don't think of it as a gamble," he told the Today programme.
Mr Osborne said he wanted to be straight with voters about the scale of cuts needed and repeatedly said that the better-off must take their share of the pain. "Whoever wins the election is going to have to take these choices, anyone who tells you otherwise is frankly lying to you.
"And if you won an election in the current economic climate on a false prospectus then it wouldn't be worth governing because you would become so distrusted, so unpopular, so quickly that you wouldn't actually be able to take the country through the economic change that is necessary."
He added: "I would rather be honest about that before the election than lie to you before the election and then be found out afterwards."
NHS savings
Mr Osborne contrasted the Tories' candour and commitment to "progressive reform" with what he said was evasiveness about "Labour frontline cuts".
While there was scope for more "value for money" in the NHS, he promised any savings would be pumped back into the health service to support frontline services.
On Tuesday, the shadow chancellor outlined plans to make £7bn in annual savings - equivalent to £23bn over the lifetime of the Parliament - but stressed that "we're all in this together".
£7bn makes some contribution to that but it's only a small part of the whole Robert ChoteIFS Retirement age: Your stories
Cash-saving measures include reducing Whitehall costs by a third and axing child trust funds while Mr Osborne insisted that the better-off had to take their share of the pain.
"I don't believe in balancing the budget on the backs of the poorest," he told the party faithful in Manchester."I don't believe in balancing the budget on the backs of the poorest," he told the party faithful in Manchester.
TORY CONFERENCE TWEETS
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Oops! -Daily Mirror has picture of Cameron drinking champagne, breaking rules his own party officials set #cpc09 About 10 hours ago British Jewish group asks Cameron for reassurance over his relationship with Eastern European members of party's group in EU #cpc09 About 12 hours ago getting ready for Conference Talk, BBC News at 7.30 #cpc09 About 13 hours ago Eric Pickles, party chairman, met union leaders in Manchester this afternoon, a Conservative source tells me -wonder how that went? #cpc09 About 15 hours ago PCS union tell me they would strike over Osborne's planned pay freeze #cpc09 About 16 hours ago What is this? Read your stories
His proposed public sector pay freeze - which exempts the frontline military and anyone earning less than £18,000 a year - goes further than the one announced by Labour on Monday, which will be restricted to GPs, judges and other high earners.His proposed public sector pay freeze - which exempts the frontline military and anyone earning less than £18,000 a year - goes further than the one announced by Labour on Monday, which will be restricted to GPs, judges and other high earners.
Mr Grayling said that what the shadow chancellor's speech had done was "say to the public, look, we have a major problem, we have to sort this out, we have to sort it out for the next generation and to keep our country solvent".
He added: "If we don't do this, if we're not honest with you, then we face big troubles ahead."
The BBC's Nick Robinson said Mr Osborne's speech was a "calculated gamble" that the Tories would be rewarded for honesty about pain ahead.
But shadow housing minister Grant Shapps said his party recognised the problem and he believed the public did so too.
"We have to face the reality of the financial situation this government's got us into.
"They've run out of your money are borrowing from your children and their children.
Mr Osborne said the measures contained in his speech would, by the end of the next Parliament, be saving £7bn a year in government spending.
He said he could not think of abolishing Labour's new 50% tax rate on the rich "while at the same time I am asking many of our public sector workers to accept a pay freeze to protect their jobs".He said he could not think of abolishing Labour's new 50% tax rate on the rich "while at the same time I am asking many of our public sector workers to accept a pay freeze to protect their jobs".
'Mainstream middle' 'Big troubles'
He also vowed to cut the cost of Whitehall - proposing to slash departmental budgets by a third during the lifetime of Parliament, a move he said would save £3bn.He also vowed to cut the cost of Whitehall - proposing to slash departmental budgets by a third during the lifetime of Parliament, a move he said would save £3bn.
But child benefit will be preserved as a universal benefit and the party would not axe the winter fuel payment or free TV licences for pensioners, he said.But child benefit will be preserved as a universal benefit and the party would not axe the winter fuel payment or free TV licences for pensioners, he said.
Mr Osborne also confirmed plans revealed on Monday to bring forward a rise in the age at which men can claim a state pension to 66 from 2016, up to ten years earlier than planned.Mr Osborne also confirmed plans revealed on Monday to bring forward a rise in the age at which men can claim a state pension to 66 from 2016, up to ten years earlier than planned.
Shadow home secretary Chris Grayling said that what Mr Osborne's speech had done was "say to the public, look, we have a major problem, we have to sort this out, we have to sort it out for the next generation and to keep our country solvent".
He added: "If we don't do this, if we're not honest with you, then we face big troubles ahead."
But Robert Chote, the director of the Institute for Fiscal Studies, said the measures outlined by Mr Osborne were just a "small shopping list" and much more would be needed to address the gaps in public finances.But Robert Chote, the director of the Institute for Fiscal Studies, said the measures outlined by Mr Osborne were just a "small shopping list" and much more would be needed to address the gaps in public finances.
Mr Chote added that "£7bn makes some contribution to that but it's only a small part of the whole".Mr Chote added that "£7bn makes some contribution to that but it's only a small part of the whole".
Mr Byrne said the Tories' plans failed to match the government's pledge to halve the deficit in four years.Mr Byrne said the Tories' plans failed to match the government's pledge to halve the deficit in four years.
He added that Mr Osborne's speech had "attacked the mainstream middle while defending a tax cut for the richest families".He added that Mr Osborne's speech had "attacked the mainstream middle while defending a tax cut for the richest families".
Liberal Democrat treasury spokesman Vince Cable said he called the proposals "Lib Dem Lite".Liberal Democrat treasury spokesman Vince Cable said he called the proposals "Lib Dem Lite".
Public sector workers have also warned of strike action over the Conservatives' pay freeze plans.Public sector workers have also warned of strike action over the Conservatives' pay freeze plans.