Cuts will lead to prosperity says Osborne

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The Independent Online

George Osborne will insist today that the Government's massive cuts programme will usher in a new age of prosperity as he seeks to shore up public support for the divisive plans.

The Chancellor will try to strike an upbeat tone about the country's prospects, while warning that Labour leader Ed Miliband would put the economy "back on the brink" and create the need for even bigger public spending cuts in the future.

After Mr Miliband last week accused the Tories of being pessimistic, Mr Osborne will maintain that the coalition's approach to the deficit will harness the country's "aspiration" and deliver "a better future for all".

"The hard economic choices we make are but a means to an end, and that end is prosperity for all," he will say in his keynote speech to the Conservative Party conference in Birmingham.

"Not from the quick fix of another debt bubble or by hitching the country's entire fortunes again to the City of London, not growth confined to one corner of our country or one sector of our economy, but lasting, sustainable growth that will only come from releasing the aspirations of the whole British people.

"The foundations of a strong economy don't rest alone on the decisions of ministers or the spending programmes of government. They come from the most basic human instincts of all.

"The aspiration to have a better life, to get a better job, to give your children a better future. The aspiration to work the extra hour, to play a bigger part of your community, to have a bigger say in your country and its future.

"These aspirations are the most powerful forces in our nation and I want them put to work for a better future for us all."

The Chancellor will claim the choice on dealing with the deficit is between the national interest and the "vested interests" - of Mr Miliband and union leaders "who put him where he is".

In a concerted attack on the Labour leader, Mr Osborne will say that Mr Miliband's plan for the economy would result in "the return of crippling economic instability, Britain back on the brink."

"We are not going to allow that to happen to our country again," he will say.

The Chancellor, whose comprehensive spending review on October 20 will detail the cuts programme ahead, will say that delaying paying off the country's £109 billion structural deficit would cost even more in the long-run.

"It's like with a credit card - the longer you leave it, the worse it gets, you pay more interest, you pay interest on the interest, you pay interest on the interest on the interest," he will say.

"We are already paying £120 million of interest every single day thanks to the last Labour government. Millions of pounds every day that goes to foreign governments so they can build the schools and hospitals for their own citizens that we aren't able to afford for ours. How dare Labour call that protecting the poor?

"Delay now means pay more later. Everyone knows it's the most basic rule of debt. So Labour's cuts wouldn't be smaller - they would be bigger and last longer.

"In eight years' time we would still be meeting here talking about what we would cut. A decade lost to debt. That's what's on offer from Labour and my generation won't stand for it."

Mr Osborne will claim support for the coalition Government's approach to the deficit from the IMF, the OECD, the bond markets, credit rating agencies and even Tony Blair and David Miliband, defeated by his brother Ed in the Labour leadership contest last week.

"On the other side is Ed Miliband and the trade union leaders who put him where he is," he will say.

"The national interest or the vested interests. I know which side we're on - we will stick to our plan, deal with the debts and get our economy moving again."

The Chancellor will say that coalition spending would be focused on areas that support economic growth, such as a green investment bank and carbon capture and storage, and the pupil premium in schools, so that poorer children have the best opportunities.

And he will say that the Government's moves to make the UK more competitive, with things like reversing the national insurance increase and cutting corporation tax, are "only the start".

Boris Johnson, the Conservative Mayor of London, will also address the conference today, using the opportunity to launch an angry attack against unions with the latest Tube strike under way back in London.

Mr Johnson is expected to use his speech to fire a broadside at the unions and explain why Transport for London is planning to cut 800 jobs.