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Osborne denies cuts plan 'gamble' Honesty needed on cuts - Cameron
(about 3 hours later)
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. David Cameron has defended his party's tough message on spending cuts saying it is acting "like a government".
He has defended plans to freeze public sector pay, cut tax credits for higher earners and raise the retirement age. The Tory leader said the public wanted "strong and decisive" leadership on the need to reduce the public deficit - the "defining issue" facing the UK.
Labour has said the proposals are confused and do not match their pledge to cut the deficit within four years. His plans to freeze public sector pay, cut tax credits for higher earners and raise the retirement age have been attacked by Labour and the unions.
Mr Osborne said more savings would have to be found and honesty was needed as the government had "run out of money". But the Tories say they have to be honest with people before an election.
But independent experts say the Tory plans only scratch the surface of the savings needed to close the gap in the public finances. Mr Cameron told the BBC it would be "dishonest and irresponsible" not to spell out their plans if they were to win public support for their programme.
Mr Osborne 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. Pay freeze
He said. "We think we have to confront this issue. We have to talk about it in advance of the election, we have to take people with us and we have to explain some of the difficult decisions."
He added: "It was, I thought, quite a contrast with the government. It was an opposition behaving like a government when we've got an government behaving like an opposition."
On Tuesday, shadow chancellor George Osborne proposed £7bn in annual savings during the next Parliament, including a one-year pay freeze for most public sector workers.
If you won an election in the current economic climate on a false prospectus then it wouldn't be worth governing George Osborne Osborne gambles with cuts plans Anger over pay freeze 'politics' Analysis: Osborne's gambleIf you won an election in the current economic climate on a false prospectus then it wouldn't be worth governing George Osborne Osborne gambles with cuts plans Anger over pay freeze 'politics' Analysis: Osborne's gamble
"I don't think of it as a gamble," he told the Today programme. He denied his plans represented an electoral gamble, saying the country had "run out of money" and tough action was required.
"Whoever wins the election is going to have to take these choices, anyone who tells you otherwise is frankly lying to you. "Whoever wins the election is going to have to take these choices," he told the BBC's Today programme.
"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." "Anyone who tells you otherwise is frankly lying to you."
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." The "real choices" in British politics were how to protect jobs while getting the public finances under control, he said.
NHS savings NHS spending
Mr Osborne contrasted the Tories' candour and commitment to "progressive reform" with what he said was evasiveness about "Labour frontline cuts". The Conservatives have pledged to protect NHS spending but Mr Osborne said the health service would still have to make "tough" choices in future to improve productivity.
The "real choices" in British politics were how to protect jobs while getting the public finances under control, he added. "Our priority is to protect the health budget but be in no doubt, we will ensure that we get much more value for money in that budget," he said.
He was asking the public to "accept" that measures such as a one-year pay freeze for most public sector workers were needed. His proposed public sector pay freeze in 2011 - 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.
"If you contrast what I said yesterday with what Alistair Darling and Gordon Brown said a week ago, people will be very clear that there is now an alternative government which has done the serious thinking and serious preparation to be in government," he said. Other cash-saving measures include reducing Whitehall costs by a third, axing child trust funds and cutting middle income tax credits, a sign, the Tories say, that the better-off must take their share of pain.
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. Mr Osborne also confirmed plans to bring forward a rise in the age at which men can claim a state pension to 66 from 2016.
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, axing child trust funds and cutting middle income tax credits, with Mr Osborne insisting the better-off must take their share of pain and the most vulnerable will be protected.
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.
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".
'Small list'
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.
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.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.
class="lp" href="http://news.bbc.co.uk/1/hi/talking_point/default.stm">HAVE YOUR SAYWe are not in this together, only the working class end up in a mess while the upper class continue toasting with champagneZed Walker, Lancaster href="http://newsforums.bbc.co.uk/nol/thread.jspa?forumID=7074&edition=1&ttl=20091007093249">Send us your comments £7bn makes some contribution to that but it's only a small part of the whole Robert ChoteIFS href="/2/hi/talking_point/8292744.stm">Retirement age: Your stories
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. Public sector unions said there could be industrial action if either the government's or the Conservatives plans for a pay freeze came into force.
He added that Mr Osborne's speech had "attacked the mainstream middle while defending a tax cut for the richest families". Mark Serwotka, leader of the Public and Commercial Services Union, said: "This is a scandalous attempt by both the Conservatives and the government to outmanoeuvre one another on public sector pay and job cuts. It is playing politics with people's lives and the services we all rely on."
And Unison leader Dave Prentis said: "Millions of public sector workers will be left out in the cold by this pay freeze. Other staff will have to pay with job and service cuts, while bankers and tax cheats escape with a slapped wrist."
For the government, Mr Byrne said Mr Osborne's plans failed to match the government's pledge to halve the deficit in four years.
"He said 'we're all in this together' but then attacked the mainstream middle while defending a tax cut for the richest families," Mr Byrne said.
The shadow chancellor had an opportunity today to show he was serious. Instead we got chaos and cuts that hit the mainstream middle class to fund tax breaks for Britain's richest elite."
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.