BRITAIN’S CONSERVATIVE party yesterday promised to make public services more efficient to help reduce record state borrowing but gave no more detail on where it would cut spending or up taxes to stabilise public finances.
Conservative finance spokesman George Osborne said in a speech to reformist think-tank Demos in London that efficiency savings would allow the party to deliver “more for less” if it wins an election due within a year, as opinion polls predict.
Mr Osborne said spending would have to be cut to get control of a budget deficit forecast to exceed 12 per cent of gross domestic product this year. However, he once again refused to specify where the axe would fall.
He said the Conservatives would achieve billions of pounds of savings by applying financial discipline to procurement and recruitment and overall cost control.
“We are the people being honest with the country that there needs to be budget cuts . . . There is still a lot of road ahead and we are progressively setting out our case,” he said.
Economists say that whichever party wins the next election will have to juggle a combination of spending cuts and tax hikes to cut the budget deficit, which hit a record high for the month in June.
“The bulk of dealing with this huge debt crisis has to come from spending restraint, because people should not be overtaxed to pay for Labour’s overspending,” Mr Osborne said.
He denied newspaper reports that the party might raise VAT to 20 per cent, but he declined to give details of his tax plans.
The Labour government has temporarily cut VAT to 15 per cent from 17.5 per cent until the end of the year.
“I have not ruled out tax rises from the day I became the shadow chancellor,” he said. “While I don’t rule out tax rises, there are no specific plans about VAT.”
The Conservatives are keen to stave off charges from Labour that they will cut public services if they get into power.
Mr Osborne argued that fiscal responsibility was “not at odds with progressive politics”. Demos was closely linked to New Labour, the revamped party led by former prime minister Tony Blair.
“If we don’t reform public services like health and education, and make the money that is available go further, the alternative is deep cuts to the frontline services that we need to compete and deliver the dream of a fairer society,” he said.
Business secretary Peter Mandelson dismissed Mr Osborne’s comments.
“For them to say that they are the progressives in British politics . . . is laughable. It is certainly an audacious try by George Osborne which I think will fool absolutely nobody,” he said.
“It is frankly irresponsible to even put forward these ideas. Of course in the future we are going to have to find better and cleverer ways of running our public services.” – (Reuters)