Tory deficit, spending plans 'in disarray'
Conservative leader David Cameron and shadow chancellor George Osborne at odds over when to tackle UK deficit
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By Darren Plant. |  |
Monday, 01, Feb 2010 05:14
By Matthew Champion.
Conservative spending plans look in chaos after David Cameron appeared to contradict George Osborne within hours of him insisting immediate action was needed to tackle the deficit.
Appearing on the Politics Show on BBC1 Mr Cameron said the Tories were "not talking about "swingeing cuts".
"We're talking about making a start in reducing our deficit," he said.
But just hours earlier on Andrew Marr's show on the same channel, his shadow chancellor Mr Osborne had said: "We've got to show early action to get credibility with the international community and with domestic businesses."
Last week figures showed that Britain came out of recession by the narrowest of margins at the end of last year, but economist have warned that governments who withdraw stimulus plans risk a return to falls in GDP.
"For the moment, the recovery is very much based on policy decisions and policy actions," said Olivier Blanchard, the International Monetary Fund's chief economist.
"The question is when does private demand come and take over. Right now it's OK, but a year down the line; it will be a big question."
That left the Tory pledge to take immediate action to cut Britain's £178 billion deficit looking increasingly isolated on the world stage, with the government insisting it would not cut public spending until 2011 at the earliest.
Liberal Democrat Treasury spokesman Vince Cable said Mr Cameron and Mr Osborne seemed at "sixes and sevens" on how the deficit should be addressed.
"The time to cut the deficit is when the private sector is ready to take the lead in growth and job creation," he said. "We are clearly not at that point yet."
Business secretary Lord Mandelson is today launching a Labour fight-back focusing on the Tory divisions.
He called on the Tory leader to "level with the British public" and "make up [his] mind on spending plans for this year.
He said the UK was witnessing a "remarkable intellectual collapse" from the opposition.
This weekend Lord Mandelson accused Mr Osborne and Mr Cameron of "talking down" the British economy during appearances at the World Economic Forum in Davos.
"It is talking Britain down when David Cameron compares Britain ludicrously in everyone's eyes to Greece, and when George Osborne describes Britain as an exhausted runner at the back of a long marathon race unable to summon the strength to build our economy," he said.
"That is disgraceful. It is irresponsible. It's also unpatriotic."