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Tories set economy 'benchmarks' Osborne pledges 'solid' economy
(about 11 hours later)
Shadow chancellor George Osborne will set out eight benchmarks against which success of a Conservative government's economic plans would be judged. Shadow chancellor George Osborne has said he wants a "more solid" economic model for Britain built on savings, enterprise and exports.
Mr Osborne will make clear in a speech that his party intends to seek the public endorsement of businesses. In a speech he said the Tories would seek to protect Britain's credit rating and "eliminate a large part" of the budget deficit in the next Parliament.
And he will say economist Lord Stern, who wrote a key climate change report for Labour, will advise the Tories. He also outlined a list of business people supporting Tory economic policy.
Mr Osborne's speech comes as political parties trade accusations about their competing ideas for the economy. It comes as political parties trade accusations about their competing ideas for the economy.
Business figures Mr Osborne began his speech at the British Museum by saying the "old" economic model was built on "shaky foundations" of public spending, "overblown" house prices and consumer borrowing - and said new sources of growth were needed.
Lord Stern, who sits as a cross-bencher, will advise a Conservative working group on the creation of a "Green Investment Bank". The Conservatives would "rebuild" the economy on "more solid foundations" he pledged.
His report for the Treasury in 2006 on the economics of climate change influenced the government's approach to global warming. Economic benchmarks
In the speech at the British Museum in London, Mr Osborne will say Labour has left the UK "lagging behind" in green technology. He said: "Borrowing from China so that we can buy the goods they make for us may be Gordon Brown's idea of our future but it is not the Conservative Party's. We want Britain to be selling to China and the rest of the world."
Mr Osborne will announce that the working group will include leading business figures such as Yell Group chairman Bob Wigley. He said new sources of growth were needed - supported by a competitive tax system and new infrastructure - like high speed rail and broadband.
BBC political correspondent Ross Hawkins says Mr Osborne will try to shift the pre-election debate away from spending cuts and on to economic growth. Setting out eight economic "benchmarks" by which a Conservative government could be judged - he said Britain's credit rating was "under threat" of being downgraded - which would mean higher interest rates on national debt and throughout the economy.
I should stress that I am not, and have no plans to be, an adviser to any political party Lord Stern
Other benchmarks included creating a more "balanced economy", raising the private sector's share of the economy in all regions and creating a "safer banking system".
On cuts, he said the Conservatives would "make a start" in 2010 - and did not elaborate on immediate spending cuts to be implemented in a post-election budget, which the Tories say would be held within 50 days of a general election.
And he read out a list of business chiefs who he said supported the Conservatives' economic model - including Easyjet founder Stelios Haji-Ioannou and Virgin chief executive Stephen Murphy - adding that they would be seeking endorsements from more businesses.
He also said economist Lord Stern, who wrote a key climate change report for Labour and sits as a cross-bench peer, would advise the Tories on creating a "green investment bank".
Spending cuts
Shortly afterwards Lord Stern issued a statement saying: "I would be willing speak to the Conservatives' advisory group about their ideas for a green investment bank, just as I am continuing to contribute to discussions with the Labour government about policies on climate change.
"I should stress that I am not, and have no plans to be, an adviser to any political party."
Labour has said that rather than promote growth, Conservative plans to make public spending cuts this year would "strangle" an economic recovery.Labour has said that rather than promote growth, Conservative plans to make public spending cuts this year would "strangle" an economic recovery.
Business Secretary Lord Mandelson claimed Tory plans for spending cuts would take £11bn out of the economy this year.Business Secretary Lord Mandelson claimed Tory plans for spending cuts would take £11bn out of the economy this year.
Key battleground
Lord Mandelson accused the Tories of economic "illiteracy" and appearing "confused".Lord Mandelson accused the Tories of economic "illiteracy" and appearing "confused".
He said: "This is the paradox of government thrift. We learned about it in the 1930s. It seems to be totally lost on the Conservative Party."
The Conservatives insisted their position had not changed, pointing out that £1bn could be saved immediately after the election by axing child tax credits for better-off families and cutting child trust funds.The Conservatives insisted their position had not changed, pointing out that £1bn could be saved immediately after the election by axing child tax credits for better-off families and cutting child trust funds.
The Liberal Democrats have warned political dogma is dominating the economic debate.The Liberal Democrats have warned political dogma is dominating the economic debate.
They said arguments over the deficit must be driven by the state of the economy not rhetoric.They said arguments over the deficit must be driven by the state of the economy not rhetoric.
With the public spending deficit expected to grow to £178bn this year, it is set to be one of the key battlegrounds at the coming general election.With the public spending deficit expected to grow to £178bn this year, it is set to be one of the key battlegrounds at the coming general election.
The economy came out of recession during the final quarter of 2009, but at a lower than expected rate of growth of 0.1%.The economy came out of recession during the final quarter of 2009, but at a lower than expected rate of growth of 0.1%.