Cameron wants election to decide recovery plan

Britain is at a "fork in the road" with a choice between Labour's "borrowing binge" and a Tory government that would try to halt Labour's tax rises, David Cameron said yesterday.

The Conservative leader tried to regain the initiative amid jitters in his party that Labour's claims the Opposition would "do nothing" about the recession have hurt his opinion poll ratings.

In a speech at the London School of Economics, Mr Cameron said Labour's "reckless" borrowing and "spend now, forget the future" policy could slow the economic recovery. The Tories would cut Labour's public spending plans from 2010, he said, even though the Chancellor, Alistair Darling, had already announced a squeeze on previous figures in last month's pre-Budget report.

He challenged Gordon Brown to call an immediate general election so the public could make their choice between the very different economic policies on offer from the two parties.

Answering questions afterwards, Mr Cameron said: "We are at a fork in the road. Either we go ahead with this borrowing binge – an additional £20bn I don't think we can afford – to cut taxes that I don't think will stimulate the economy, because people know a further tax increase is coming down the line. Or we can take a different path and say let's recognise how the world has changed, how broke we are in Britain and that we've got to get the public finances back on to a sustainable footing."

He stopped short of promising that a Tory government would prevent Labour's planned tax rises: "Our priority should be to try to get spending on a path where we can avoid those tax increases. We must put the interests of low-income families first but we recognise we are living in a very difficult situation. I don't want to make promises I cannot keep." The Conservatives had already identified savings that could be used to freeze council tax, he said. Although Mr Darling cut the planned rate of growth in spending in 2011-12 and 2012-13 from 1.8 to 1.2 per cent, Mr Cameron said even that was unrealistic and would hinder growth for years.

"I know that opposition leaders always call for an election but I think we really need one. None of this was in Labour's manifesto, and they are asking people to go ahead with a borrowing binge now that is going to load up taxes and debt for future generations."

Ministers dismissed Mr Cameron's call for an election as a "smokescreen".

Mr Brown said: "I believe there is a very clear dividing line between those who do nothing and simply let people suffer and what we are determined to do, which is to help people through these difficult times.

"We are taking bold decisions. The alternative of letting the recession take its course is one that we will not allow to happen. We will take action, working with our European and international partners at every point."

The economy: Tory leader's claims evaluated

Cameron Claim #1

"Discretionary borrowing now... may even make the recession longer and deeper"

Verdict: Half right. Yes, higher borrowing will make the recession longer, and the recovery weaker. Taxes will undoubtedly be higher from 2011, even for those earning as little as £20,500 a year. That will indeed depress demand and consumption and slow the recovery, which will be anaemic anyway because it will take so long for the banks to come back. But the recession will not be deeper; most economists put the boost to GDP from the Chancellor's plans at about .2 percentage points next year. The Government (and the Bank of England) is gambling on action now to avoid a full-blown slump and deflation, because experience in the 1930s and in Japan more recently show that would be virtually impossible to break out of.

Cameron Claim #2

"We need exceptional policies to get credit moving again... That's why we have proposed a National Loan Guarantee Scheme."

Verdict: Mr Cameron is right to point to the failure of the credit system as the most important factor in the gathering recession, though the general collapse in demand is fast overtaking it, so the demand for, as well as the supply of credit is shrinking as confidence evaporates. But the National Loan Guarantee Scheme is potentially even more statist than Labour's schemes. Would a Cameron government determine which companies live and which die in this recession?

Cameron Claim #3

"A credible long-term plan for controlling public spending has three components. First, reducing the demands on the state by fixing our broken society. Second, increasing the productivity of the state by reforming our public services. And third, cutting government waste."

Verdict: Open. It is all true, but also precisely what Tony Blair and Gordon Brown said that New Labour would do before 1997; there is insufficient detail on why Mr Cameron would do any better.

Sean O'Grady, Economics Editor

Sport
Thiago Silva pulls Arjen Robben back to concede a penalty
world cup 2014Brazil 0 Netherlands 3: More misery for hosts as Dutch take third place
Sport
Robin van Persie hands his third-place medal to a supporter
Van Persie gives bronze medal to eccentric fan moments after being handed it by Blatter
News
Ian Thorpe had Rio 2016 in his sights
people
Life and Style
Swimsuit, £245, by Agent Provocateur
fashion

Diving in at the deep end is no excuse for shirking the style stakes

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
scienceScientists have developed a material so dark you can't see it...
News
Monkey business: Serkis is the king of the non-human character performance
peopleFirst Gollum, then King Kong - now the actor is swinging through trees in Dawn of the Planet of the Apes
Arts and Entertainment
Blackman: Landscape of children’s literature does not reflect the cultural diversity of young people
booksMalorie Blackman appeals for a better ethnic mix of authors and characters and the illustrator Quentin Blake comes to the rescue
Voices
Mrs Brown's Boy: D'Movie has been a huge commercial success
voicesWhen it comes to national stereotyping, the Irish know it can pay to play up to outsiders' expectations, says DJ Taylor
Arts and Entertainment
Curtain calls: Madani Younis
theatreMadani Younis wants the neighbourhood to follow his work as closely as his audiences do
Life and Style
Douglas McMaster says the food industry is ‘traumatised’
food + drinkSilo in Brighton will have just six staple dishes on the menu every day, including one meat option, one fish, one vegan, and one 'wild card'
Life and Style
Once a month, waistline watcher Suran steps into a 3D body scanner that maps his body shape and records measurements with pinpoint accuracy
techFrom heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor
Sport
Mario Balotelli, Divock Origi, Loic Remy, Wilfried Bony and Karim Benzema
transfersBony, Benzema and the other transfer targets
News
Soft power: Matthew Barzun
peopleThe US Ambassador to London, Matthew Barzun, holds 'jeans and beer' gigs at his official residence. He says it's all part of the job
Sport
Joe Root and James Anderson celebrate their record-beaking partnership
cricketEngland's last-wicket stand against India rewrites the history books
News
Gavin Maxwell in Sandaig with one of his pet otters
peopleWas the otter man the wildlife champion he appeared to be?
News
Rowsell says: 'Wearing wigs is a way of looking normal. I pick a style and colour and stick to it because I don't want to keep wearing different styles'
peopleThe World Champion cyclist Joanna Rowsell on breaking her collarbone, shattering her teeth - and dealing with alopecia
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Information Security Manager (ISO 27001, Accreditation, ITIL)

£70000 per annum: Harrington Starr: Information Security Manager (ISO 27001, A...

C# Developer (HTML5, JavaScript, ASP.NET, Mathematics, Entity)

£30000 - £45000 per annum + Benefits + Bonus: Harrington Starr: C# Developer (...

C# Integration Developer (.NET, Tibco EMS, SQL 2008/2012, XML)

£60000 - £80000 per annum + Benefits + Bonus: Harrington Starr: C# Integration...

Biztalk - outstanding opportunity

£75000 - £85000 per annum + ex bens: Deerfoot IT Resources Limited: Biztalk Te...

Day In a Page

Iraq crisis: How Saudi Arabia helped Isis take over the north of the country

How Saudi Arabia helped Isis take over northern Iraq

A speech by an ex-MI6 boss hints at a plan going back over a decade. In some areas, being Shia is akin to being a Jew in Nazi Germany, says Patrick Cockburn
The evolution of Andy Serkis: First Gollum, then King Kong - now the actor is swinging through the trees in Dawn of the Planet of the Apes

The evolution of Andy Serkis

First Gollum, then King Kong - now the actor is swinging through the trees in Dawn of the Planet of the Apes
You thought 'Benefits Street' was controversial: Follow-up documentary 'Immigrant Street' has got locals worried

You thought 'Benefits Street' was controversial...

Follow-up documentary 'Immigrant Street' has got locals worried
Refugee children from Central America let down by Washington's high ideals

Refugee children let down by Washington's high ideals

Democrats and Republicans refuse to set aside their differences to cope with the influx of desperate Central Americas, says Rupert Cornwell
Children's books are too white, says Laureate

Children's books are too white, says Laureate

Malorie Blackman appeals for a better ethnic mix of authors and characters and the illustrator Quentin Blake comes to the rescue
Blackest is the new black: Scientists have developed a material so dark that you can't see it...

Blackest is the new black

Scientists have developed a material so dark that you can't see it...
Matthew Barzun: America's diplomatic dude

Matthew Barzun: America's diplomatic dude

The US Ambassador to London holds 'jeans and beer' gigs at his official residence – it's all part of the job, he tells Chris Green
Meet the Quantified Selfers: From heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor

Meet the 'Quantified Selfers'

From heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor
Madani Younis: Five-star reviews are just the opening act for British theatre's first non-white artistic director

Five-star reviews are just the opening act for British theatre's first non-white artistic director

Madani Younis wants the neighbourhood to follow his work as closely as his audiences do
Mrs Brown and her boys: are they having a laugh?

Mrs Brown and her boys: are they having a laugh?

When it comes to national stereotyping, the Irish – among others – know it can pay to play up to outsiders' expectations, says DJ Taylor
Gavin Maxwell's bitter legacy: Was the otter man the wildlife champion he appeared to be?

Otter man Gavin Maxwell's bitter legacy

The aristocrat's eccentric devotion to his pets inspired a generation. But our greatest living nature writer believes his legacy has been quite toxic
Joanna Rowsell: The World Champion cyclist on breaking her collarbone, shattering her teeth - and dealing with alopecia

Joanna Rowsell: 'I wear my wig to look normal'

The World Champion cyclist on breaking her collarbone, shattering her teeth - and dealing with alopecia
Bill Granger recipes: Our chef gives raw ingredients a lift with his quick marinades

Bill Granger's quick and delicious marinades

Our chef's marinades are great for weekend barbecuing, but are also a delicious way of injecting flavour into, and breaking the monotony of, weekday meals
Germany vs Argentina World Cup 2014 preview: Why Brazilians don't love their neighbours Argentina any more

Anyone but Argentina – why Brazilians don’t love their neighbours any more

The hosts will be supporting Germany in today's World Cup final, reports Alex Bellos
The Open 2014: Time again to ask that major question - can Lee Westwood win at last?

The Open 2014

Time again to ask that major question - can Lee Westwood win at last?