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Osborne to warn over debt threat Tories 'will prioritise debt cut'
(about 13 hours later)
Shadow chancellor George Osborne will warn later that "Gordon Brown's debt" is the "single biggest threat" to Britain's economic future. Shadow chancellor George Osborne has promised that a Conservative government would work "flat out" to deal with the UK's budget deficit.
In the annual Mais Lecture he will set out Conservative strategy for returning the country to sustained growth. In a speech in London, he said public debt was "likely to be the cause" of the next economic crisis, adding there was "no choice" but to deal with it.
Speaking ahead of the event, Mr Osborne accused the PM of leaving voters worse off than before Labour came to power. The deficit, expected to be one of the key themes of the general election, is expected to rise to £178bn this year.
But Chief Secretary to the Treasury Liam Byrne said the Tories were "once again... talking down Britain". The government accused Mr Osborne of "talking down Britain".
Mr Osborne will deliver the lecture at the Cass Business School in London on Wednesday evening. 'Undermining stimulus'
He will accuse Mr Brown of presiding over the first Parliament in three decades in which national income per head of population is lower at the end than the beginning. Mr Osborne promised that measures to deal with debt would be based on the findings of an independent audit of the public finances, and forecasts for growth, which would be carried out soon after the election.
Calling Labour's economic approach "fundamentally broken", he will call for "a new model built on saving and investment". An emergency budget would be held within 50 days, setting out the "overall fiscal path and spending totals" for the years ahead.
Mr Byrne rejected the criticism, adding: "Since 1997, the UK has seen the biggest increase in income per person of any nation in the G7." George Osborne still can't or won't offer any plan to deal with the deficit of the economy Liam Byrne, Treasury minister
That would include measures to reduce the public sector pensions bill and the cost of Whitehall bureaucracy, as well as increasing the pension age, Mr Osborne said.
Giving the annual Mais Lecture at the Cass Business School in London, the shadow chancellor said: "There is no choice between going for growth today and dealing with our debts tomorrow.
"Indeed we will not have any meaningful growth unless we show we can deal with our debts.
"For it is the lack of a credible plan to deal with the deficit that is already pushing up market interest rates, undermining the monetary stimulus that is supporting the economy, and sapping the confidence of investors and consumers."
He restated the Conservatives' aim to eliminate the bulk of the structural deficit within a Parliament.
'Out of his depth'
Labour has promised to halve annual borrowing within four years.
Chief Secretary to the Treasury Liam Byrne said: "Tonight, George Osborne had the chance to come clean about his spending plans - and he bottled it.
"The only thing he made clear in the Mais Lecture was that he's still ready to put economic recovery at risk.
"He wants to start cutting support to economy now at the expense of jobs and public services."
He added: "George Osborne still can't or won't offer any plan to deal with the deficit of the economy."
Vince Cable: "The approach to public spending really has to be governed by the state of the economy"
Lib Dem Treasury spokesman Vince Cable said: "Osborne's latest economic commentary shows just how out his depth he is when it comes to the important economic issues.
"Slashing spending now could push the economy back into recession and inflict further structural damage on the UK that will make it harder to sustain our credit rating."
He added: "In the current climate it is essential that decisions about the speed and timing of tackling the deficit are based on the state of the economy, not political dogma."