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Osborne blasts Brown's borrowing Osborne blasts Brown's borrowing
(about 1 hour later)
George Osborne has accused Gordon Brown of an economic strategy that will "saddle" two generations with debt. George Osborne has accused Gordon Brown of planning a "spending splurge" that will saddle two generation with debt.
The shadow chancellor attacked the prime minister on the BBC's Today programme for attempting to ward off recession with a "spending splurge". The shadow chancellor told the BBC attempts to "spend your way out of a recession" would only lead to "huge debt" and higher taxes in the future.
He said the Tories would freeze council tax and allow the Bank of England "to do its job" and cut interest rates. Instead the Tories would "target" tax help such as freezing council tax and payroll tax for small firms.
Mr Brown has said it was responsible for government to boost spending to "speed up economic activity". The prime minister says it is responsible to boost spending to "speed up economic activity".
Tax freeze
Instead of heavy public spending, Mr Osborne said the Conservatives would "put money direct into people's pockets" by freezing council and business taxes.Instead of heavy public spending, Mr Osborne said the Conservatives would "put money direct into people's pockets" by freezing council and business taxes.
He said: "You can't spend your way out of recession. Tax freeze
"Let the Bank of England do its job by cutting interest rates and offer targeted help by freezing council tax and keeping people in work by freezing business tax on small businesses." Ahead of a speech at the London School of Economics - his first since the row over his meetings with Russian billionaire Oleg Deripaska - Mr Osborne told BBC Radio 4's Today programme: "You can't spend your way out of recession.
FROM THE TODAY PROGRAMME class="" href="http://news.bbc.co.uk/today/hi/default.stm">More from Today programme "Let the Bank of England do its job, by cutting interest rates, and offer targeted help by freezing the council tax, but also keeping people in work by, for example, cutting payroll taxes for small businesses.
Mr Osborne spoke on the BBC Radio 4 programme ahead of a speech at the London School of Economics where he will criticise Mr Brown for "borrowing without limit" to deal with the economic downturn. It is a tragedy that the world is prey to one volatile commodity Gordon Brown
The shadow chancellor will say the tactic is "irresponsible". "And don't end up in a position where, because you have spent beyond control, borrowed without limit, you have saddled this economy with so much debt, that we spend a decade trying to get out from under the mountain of debt the government has left us with."
And he will say a more modest borrowing increase would make it easier for the Bank of England to cut interest rates, which would help boost recovery. Liberal Democrat Treasury spokesman Vince Cable has been calling for a "drastic" cut in interest rates but Chancellor Alistair Darling has said it is a decision for the independent Bank of England.
But Chancellor Alistair Darling has said it was "sensible" to raise borrowing to maintain investment in key areas. Mr Osborne will say in his speech that excessive borrowing would make it more difficult for the Bank of England to achieve "a sustained reduction in interest rates".
Mr Brown is visiting Edinburgh, where is meeting local business leaders, and is also expected to campaign in Glenrothes, where there will be a by-election next month. He will say it will mean spiralling debt interest payments and tax rises for years to come and argue that a "spending splurge ... is the road to economic ruin".
Debt concerns 'Low debt'
The London School of Economics speech will be Mr Osborne's first since he admitted "a mistake" in his meetings with Russian oligarch Oleg Deripaska in Corfu. Asked about his spending plans in Edinburgh, Mr Brown told local business leaders on Friday the government had cut national debt as a proportion of national income over the past decade.
He vehemently denies claims he tried to solicit a £50,000 donation for the Conservative Party while on holiday. He added: "We have low national debt in this country.
It comes as an opinion poll suggests the Conservatives lead over Labour has fallen from 24 points to nine. "In my view the only thing that you can do in circumstances where the economic activity that you need is not taking place in the market place at the level you want is to temporarily to make sure that you do something to increase that level of economic activity."
The YouGov poll for the Daily Telegraph puts the Tories on 42%, Labour on 33% and the Lib Dems on 15%. But he said you also needed to "make the right judgements" about where to spend the money in order to "make a difference" and said the government's recapitalisation of banks had made a difference and he hoped would eventually yield a return to the government.
Meanwhile the Liberal Democrat leader Nick Clegg will warn later the economic downturn could lead to a surge in cases of mental illness, triggered by unemployment and repossessions. In the same speech he said "the energy problem" with oil prices had to be solved adding: "It is a tragedy that the world is prey to one volatile commodity, that can disrupt businesses, disrupt people's lives, by a trebling of prices, over a very short period of time, and interestingly enough, an industry run by a cartel - not run in a free market way at all.
He said: "It is the hidden tragedy of a recession that mental illness will surge as people's jobs and homes are increasingly under threat. "And we've got to solve this energy problem because it's part of our climate change problems, but it's also part of this question about how affordable energy is for businesses and for individuals in the future."
"At a time when the limited mental health services available on the NHS are already under immense strain, ministers must prepare now for this profound consequence of the recession." Meanwhile, a YouGov poll for the Daily Telegraph suggests the Conservatives' lead over Labour has fallen from 24 points to nine, putting the Tories on 42%, Labour on 33% and the Lib Dems on 15%.
Liberal Democrat leader Nick Clegg will warn later the economic downturn could lead to a surge in cases of mental illness, triggered by unemployment and repossessions.
He will say: "At a time when the limited mental health services available on the NHS are already under immense strain, ministers must prepare now for this profound consequence of the recession."