Labour spending 'unsustainable'

3:25pm Tuesday 18th November 2008

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David Cameron has ditched the Tories' promise to match Labour's planned spending up to 2011, insisting it was now unsustainable.

In a significant shift of policy, the Conservative leader said the Government's investment plans were based on "heroic assumptions" about the country's economic recovery.

"Labour's economic mismanagement makes it vital for the long-term health of our economy that we set a new path for restraining the growth of spending," he told reporters.

"That means for the year 2010/11 we need change, not more of the same.

"That means reducing planned government spending growth and not matching Labour's spending plans.

"To be absolutely clear - to stop future tax rises the growth rate of spending in 2010/11 will have to be lower than the growth rate laid out by Labour.

"The growth rates of spending in the years beyond 2010/11, pencilled in by the Chancellor last year, are also now unsustainably high."

Mr Cameron also warned that Prime Minister Gordon Brown's proposed "fiscal stimulus" was merely storing up tax rises for the years to come.

A £30 billion injection to the economy would mean an 8% rise in income tax later, he claimed.

Mr Cameron said recent forecasts meant the British economy could not withstand previous spending commitments without inflicting bigger tax rises on the public later.