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Osborne faces pressure over pound Osborne stands by economy warning
(about 2 hours later)
Shadow chancellor George Osborne has brushed aside criticism of his warning about the collapse of sterling. George Osborne has dismissed criticism of his warning of a collapse of sterling, saying it is his job to tell the public the truth about the economy.
Mr Osborne defended his comments about Gordon Brown's "irresponsible" policies and abandonment of fiscal prudence possibly leading to a run on the pound. The shadow chancellor said sterling had fallen to a 13-year low. Markets were looking at "economic fundamentals", not what politicians were saying, he said.
He had argued: "The more you borrow as a government... the less attractive your currency seems." There was no convention politicians did not talk about its value, he said.
Chancellor Alistair Darling questioned Mr Osborne's political judgement in "talking down" the pound. Chancellor Alistair Darling had questioned Mr Osborne's political judgement in "talking down" the pound.
Speaking after the G20 financial summit in Washington, Mr Darling said he was surprised at Mr Osborne's comments, given the agreement among most world leaders on the need for tax cuts and public spending to boost their economies. It follows an article in the Times on Saturday in which Mr Osborne warned that Britain was heading for a "collapse of sterling" if the government kept trying to borrow his way out of trouble.
Earlier, Mr Brown, also in Washington, said he was disappointed by Mr Osborne's "partisan talk". 'Worst prepared'
Defiant statement The prime minister criticised his comments as "partisan talk", while Mr Darling said he was surprised as most world leaders agreed on the need for tax cuts and public spending to boost their economies.
But Mr Osborne told BBC One's Andrew Marr Show: "My job as shadow chancellor is to tell the British people the truth about the British economy."
Gordon Brown says politicians must work together during a crisis
He said Britain had the "worst prepared economy" for a recession with high levels of personal debt.
"I am telling the public the truth and that is the job of elected politicians, particularly opposition politicians, in difficult times."
He said sterling on Friday had already fallen to "a 13-year-low against a basket of currencies" and "hard headed markets" were making judgements about the British economy - not what politicians were saying.
"The reason why sterling has fallen by more than 25% is because they don't believe Gordon Brown when he says Britain is better prepared than other economies," he said.
He said: "This devaluation under Gordon Brown is greater than the devaluation you saw under James Callaghan, than the devaluation you saw under Harold Wilson, than the devaluation that happened after Black Wednesday.
Politically, Team Brown believe the Tories have made a huge mistake Read Nick Robinson's blog in full
"This is a striking lack of confidence that the markets are indicating in Gordon Brown's handling of the economic situation."
Sterling has fallen sharply in recent weeks amid fears about a UK recession.Sterling has fallen sharply in recent weeks amid fears about a UK recession.
It has lost more than a quarter of its value against the dollar and hit a near-record low against the euro.It has lost more than a quarter of its value against the dollar and hit a near-record low against the euro.
On Saturday, Mr Osborne suggested in the Times that Mr Brown "doesn't care" how much he borrows. Poll changes
And he warned Britain was heading for a "collapse of sterling" if Mr Brown persisted with trying to borrow his way out of trouble. Mr Osborne has been criticised by Labour politicians, who said he had breached the convention that senior politicians do not predict a run on the pound.
Gordon Brown says politicians must work together during a crisis However, former Tory chancellor Ken Clarke said: "I have never heard of any convention that opposition politicians - including the shadow chancellor - cannot comment on sterling."
His comments attracted criticism from Labour politicians, who said he had breached the convention that senior politicians do not predict a run on the pound.
However, former Tory chancellor Ken Clarke said Mr Osborne had "made a perfectly sensible comment" about a possible fall in the value of sterling.
He added: "I have never heard of any convention that opposition politicians - including the shadow chancellor - cannot comment on sterling."
In a later statement, Mr Osborne said Britain was already witnessing "the largest fall in the pound in modern British history".
He added: "Now behind-the-scenes spinning from the prime minister and his entourage in America is fuelling speculation that the government is planning to borrow recklessly for a big unfunded tax con.
"That will leave the British people with higher debts and higher taxes in years to come."
Politically, Team Brown believe the Tories have made a huge mistake Read Nick Robinson's blog in full However, he said Mr Brown's policies were "one of the reasons" rather than the sole cause of the pound's fall, and did not repeat his prediction of a sterling collapse.
Meanwhile, Liberal Democrat Treasury spokesman Vince Cable said Mr Osborne's comments were "baffling".
"George Osborne has apparently failed to notice the fact we've already had a run on the pound, but it's happened gradually rather than in one dramatic moment as with the ERM under the last Tory government," he said.
Political polls
Meanwhile, a Sunday Times poll suggests the prime minister's handling of the economic crisis is going down well with the British public.Meanwhile, a Sunday Times poll suggests the prime minister's handling of the economic crisis is going down well with the British public.
Research by YouGov showed the Tory lead over Labour at its lowest this year.Research by YouGov showed the Tory lead over Labour at its lowest this year.
It also suggested the prime minister and Alistair Darling were more trusted to deal with the economic situation than Mr Cameron and Mr Osborne, by a margin of 36% to 25%.It also suggested the prime minister and Alistair Darling were more trusted to deal with the economic situation than Mr Cameron and Mr Osborne, by a margin of 36% to 25%.
However, there was better news for the Tories in a poll for the Independent on Sunday.However, there was better news for the Tories in a poll for the Independent on Sunday.
The research by ComRes indicated they had stretched their lead by three points to 11% over the past month.The research by ComRes indicated they had stretched their lead by three points to 11% over the past month.
The Conservatives were on 43%, Labour was up a point on 31%, while the Liberal Democrats were down 4% on 12%.The Conservatives were on 43%, Labour was up a point on 31%, while the Liberal Democrats were down 4% on 12%.