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Pound being put at risk - Cameron Pound being put at risk - Cameron
(about 1 hour later)
The government is putting the British economy and currency at risk with its £20bn "borrowing binge", Conservative leader David Cameron has told the BBC. The government is putting the British economy and the pound at risk with its £20bn "borrowing binge", Conservative leader David Cameron has told the BBC.
Mr Cameron said it was a "massive mistake" to plan a short term giveaway only to "whack up taxes later". Mr Cameron said planning for a short term giveaway only to "whack up taxes later" could make the recession worse.
He said Gordon Brown's plans could make the recession worse and said he would abandon Labour's 2010 spending plans. In a speech in London he said a Tory government would not match Labour's spending plans for 2010 and beyond.
The prime minister says the Conservatives are isolated as most countries support a fiscal stimulus. Prime Minister Gordon Brown says the Conservatives are isolated as most countries support a fiscal stimulus.
He has also accused Mr Cameron of leading a "do nothing" party which would not help people through the economic downturn.He has also accused Mr Cameron of leading a "do nothing" party which would not help people through the economic downturn.
'Whack up taxes''Whack up taxes'
Mr Cameron's comments came as a raft of data was released showing the economic downturn continuing.Mr Cameron's comments came as a raft of data was released showing the economic downturn continuing.
The British Retail Consortium reported UK retail sales down 0.4% in November on a year earlier. The Office for National Statistics said manufacturing output fell in October by 4.9% on a year earlier and the Royal Institution of Chartered Surveyors said sales per estate agent fell to 10.6 in November - the lowest level since the survey began in 1978. The British Retail Consortium reported UK retail sales down 0.4% in November on a year earlier.
The government announced a series of measures to try to boost confidence last month, including a cut in VAT from 17.5% to 15% to try to get people spending. The Office for National Statistics said manufacturing output fell in October by 4.9% on a year earlier and the Royal Institution of Chartered Surveyors said sales per estate agent fell to 10.6 in November - the lowest level since the survey began in 1978.
But the chancellor said VAT would go back up after a year, National Insurance contributions would have to rise by 0.5% from 2011 together with a new higher rate of tax for earnings over £150,000.
Mr Cameron told BBC Radio 4's Today programme: "Even though we're borrowing absolutely at the limit, to go out and borrow another £20bn and to have a short-term giveaway, and then to have to whack up taxes later - I think that is a massive mistake. "
FROM THE TODAY PROGRAMME More from Today programmeFROM THE TODAY PROGRAMME More from Today programme
The government announced a series of measures to try to boost confidence last month, including a cut in VAT from 17.5% to 15% to try to get people spending.
But the chancellor said VAT would go back up after a year, National Insurance contributions would have to rise by 0.5% from 2011 together with a new higher rate of tax for earnings over £150,000. There would also be big cuts in public sector spending growth.
Mr Cameron told BBC Radio 4's Today programme it was right to let the "automatic stabilisers" operate - as tax receipts drop and benefits rise.
'Economic crimes'
But he said it was a "massive mistake" to borrow an extra £20bn on top of normal borrowing and then "whack up taxes later".
He added: "I think that puts the public finances at risk, it puts the currency at risk, it puts the whole economy at risk and I think it will actually delay the recovery."He added: "I think that puts the public finances at risk, it puts the currency at risk, it puts the whole economy at risk and I think it will actually delay the recovery."
Mr Cameron is giving a speech to the London School of Economics in which he is stepping up his criticism of the government's "fiscal stimulus" plan to boost the economy. In a speech to the London School of Economics later, he said he agreed with the government that exceptional measures were needed, but they had to be "the right exceptional measures".
He told the BBC the government's plans would "load up taxes and load up debt for future generations". The Tories would turn their backs on families and businesses just when they need real help to get through tough times Yvette CooperChief secretary to the Treasury
The government says the need for a fiscal stimulus is widely accepted and the Conservatives are isolated in opposing their plans. He said the VAT cut was "unconvincing" and said people would not spend and businesses would not invest if they know taxes will rise and the future looked "bleak".
On Monday, at a press conference Mr Brown said many European countries were planning a "temporary and affordable fiscal stimulus". Labour's plans to cut the growth of public spending started too late, he said. Announcing that a Tory government would abandon Labour's spending plans from 2010, he said to avoid tax rises it had to be brought under control now.
He said the boost would help families and businesses and was "the right thing to do". He said Britain was "on the brink of a fundamentally bad decision" and the only way out was to hold an immediate general election.
"I think these Labour politicians have been found out and just as before they should be punished for a generation for their economic crimes," he said.
Poll leadPoll lead
"Facing the downturn it is right, as almost everybody now accepts across the world and every country is now looking at this, that we help people through these difficult times," he said. The government says the need for a fiscal stimulus is widely accepted and the Conservatives are isolated in opposing their plans.
But Mr Cameron said finance experts such as the heads of the International Monetary Fund had said a fiscal stimulus "is a good idea if you can afford it".
He also referred to the governor of the European Central Bank, Jean-Claude Trichet, who told the BBC on Monday: "If you augment too much your own borrowing, you might be punished by markets.
"If you are at the limits of what you can do, you can lose more with absence of confidence and loss of confidence than you would gain from the simple channelling of additional spending."
But chief secretary to the Treasury Yvette Cooper said Mr Cameron's speech showed "the Tories would turn their backs on families and businesses just when they need real help to get through tough times".
"David Cameron has shown he would let recession last longer and run deeper, just as Margaret Thatcher did in the eighties, costing us all more in the long run."
A Populus survey for the Times on Tuesday suggested 40% of people trusted Mr Brown and chancellor Alistair Darling to fight the recession, compared with 31% for Mr Cameron and shadow chancellor George Osborne.A Populus survey for the Times on Tuesday suggested 40% of people trusted Mr Brown and chancellor Alistair Darling to fight the recession, compared with 31% for Mr Cameron and shadow chancellor George Osborne.
The telephone survey of 1,505 adults, taken between Friday and Sunday, suggests a six point increase on that issue since the pre-Budget report on 24 November.The telephone survey of 1,505 adults, taken between Friday and Sunday, suggests a six point increase on that issue since the pre-Budget report on 24 November.
It also suggests the Conservatives still have an overall lead among voters with 39% support, compared with Labour on 35% and the Lib Dems on 17%. But it also suggests the Conservatives still have an overall lead among voters with 39% support, compared with Labour on 35% and the Lib Dems on 17%.
Mr Cameron told the BBC: "The polls may show whatever the polls show. But I would say: I know opposition leaders always call for an election, I actually think we really need one."Mr Cameron told the BBC: "The polls may show whatever the polls show. But I would say: I know opposition leaders always call for an election, I actually think we really need one."
He said the only way to stop the government's borrowing plans was to have an election to allow voters to decide on the "big choice" before them.
"You can go on with Labour, with this huge extra borrowing and taxes later, or you can take a different path and say: no that is wrong and it's economically wrong."