'Tories want spending restraint'
Updated on 18 November 2008
Shadow chancellor George Osborne tells Krishnan Guru-Murthy a future Conservative government will live within its means.
Krishnan Guru-Murthy: Earlier I talked to the shadow chancellor, George Osborne, and I put it to him that it was clear now that the Conservatives would spend less on public services than the Labour party.
George Osborne: No. What's clear is that when faced with a choice of how to deal with the massive borrowing problem in the public finances, the Tories, the Conservative party, are choosing spending restraint.
Now, we'll hear what Labour are going to choose. But from everything they've said so far, they are going to choose tax rises. And I think that faced with a tax bombshell, the public are going to prefer the Conservative approach of government living within its means.
Krishnan Guru-Murthy: So you would rather spend less on public services like schools and hospitals than have a big tax rise in the future?
George Osborne: I think given the choice between restraining the growth of spending and tax rises - and you're right, that is the choice - then I think the public want to see government living within its means. They want to see spending restraint. The last thing they want to see, particularly if they've been through a recession, are tax rises that make the recovery that much more difficult.
Krishnan Guru-Murthy: Can we just call a spade a spade? You talk about restricting growth and all the rest of it. I mean, we are talking about spending less money on public services, aren't we? So schools who are planning on spending money in 2011 will have less to spend under a Conservative government than under a Labour government.
'We are saying we would rather slow the growth of spending, slow the increase in spending, than present the public with a big tax bill.'George Osborne
George Osborne: First of all, we don't know how Labour are going to respond to this, whether they are going to confirm that there will indeed be a tax bombshell under them if they are reelected.
And second of all, we are going to set out closer to the time, when we know the full details of the pattern of public expenditure, which departments get which.
But people are pretty clear that David Cameron's priorities are things like health, things like education...
Krishnan Guru-Murthy: Well, they're not if you're going to cut them.
George Osborne: Well, first of all you're using the term "cut"... What we're talking about here is the growth of spending. We're talking about how much spending rises...
Krishnan Guru-Murthy: It's a reduction, isn't it?
George Osborne: We are saying we would rather slow the growth of spending, slow the increase in spending, than present the public with a big tax bill.
Krishnan Guru-Murthy: So you are cutting the increase in spending. That is a cut.
George Osborne: We are slowing the growth in spending, and the public know that because Gordon Brown...
Krishnan Guru-Murthy: That is a cut, isn't it?
George Osborne: No, this is a very important point. Because the public can see that borrowing is out of control, that Gordon Brown didn't see the boom and didn't prepare for the bust, that because next week he looks like he's going to borrow even more, somehow this has got to be paid for. And there are only two ways of paying for it. You can either slow the growth of spending or you can increase taxes.
Krishnan Guru-Murthy: I mean, you're refusing to use the word "cut". But we should just be clear with people that slowing the growth in spending is a cut in the growth of spending. That is a cut.
George Osborne: It is about how much spending rises. We've been through this in previous periods, and it is about how much spending rises. And when every family is having to tighten its belt, when every business is looking for ways to make sure that money is better spent, so too should government. It should be a proper custodian of taxpayers' money. It has not been that under Gordon Brown.
And the choice under Labour is higher taxes still. Under Conservatives you will get spending restraints and fiscal responsibility.
Krishnan Guru-Murthy: Right. So you are proposing to people that they will get less spending on schools and hospitals, and they will have to pay more tax under a Conservative government. And you think that's going to be attractive.
George Osborne: Sorry, that was a completely muddled question.
Krishnan Guru-Murthy: Well, let me explain it to you, then.
George Osborne: No, let me explain. You've asked the muddled question.
Krishnan Guru-Murthy: You've accused me of asking a muddled question.
George Osborne: The clear answer is this: spending restraint under the Conservatives... We will see how Labour respond to this, but the figures they have pencilled in before the borrowing bombshell became clear, before the severity of the recession they helped create became clear, those figures are unrealistic.
There should be spending restraint. The alternative, Labour's alternative, is future tax rises. And I think the public want fiscal responsibility and spending restraint, not fiscal incontinence and future tax rises.
Krishnan Guru-Murthy:Well, you've got yourself into a position now where a Tory shadow chancellor is opposing tax cuts. And there are many people in your own party who say it's time to get rid of you and replace you with somebody else and a different policy - and get back to the Tory heartland positions.
George Osborne: Right, well, again, if you'll excuse me, a muddled question. On the tax...
Krishnan Guru-Murthy: You are opposed to Labour tax cuts next week, aren't you?
George Osborne: They are not tax cuts. Tax cuts are ones that are properly funded. Tax cuts are where taxes are properly reduced.
Krishnan Guru-Murthy: A tax cut is a reduction in the rate of tax.
George Osborne: This is, what Gordon Brown is proposing, a tax con, from the same man, the same prime minister, who gave you the 10p tax con. The public know they're going to have to pay for this. And they know that under Labour they'll have to pay for it with higher taxes.
And my job as shadow chancellor is to tell the public the truth. And the truth is that they face a choice. Let us hear how Labour respond to this. The choice couldn't be clearer: higher taxes or spending restraint. And the Conservatives are choosing spending restraint.
Krishnan Guru-Murthy: Have you had a guarantee from David Cameron that you will still be shadow chancellor going into the next election?
George Osborne: David Cameron and I, not least this morning, are working very closely on economic policy, both now in dealing with this Gordon Brown-inspired recession, but also on economic policy, as you've just heard today, going forward in the next few years. And that's what I am focused on.
