Osborne says Tories will end the 'money-for-nothing' society

Shadow Chancellor says it's time for some hard truths

The Conservatives will tell voters today that they will have to swallow tough economic medicine if the party wins power as David Cameron ends Labour's "money-for-nothing" society.

George Osborne, the shadow Chancellor, will warn that there will be no return to the days of easy credit for home-buyers and businesses and that people will have to save more for their retirement rather than rely on soaring house prices to provide a nest egg. His speech to Birmingham Chamber of Commerce marks an important shift in which the Tories will give voters a sober assessment of what they could achieve if they win power against a gloomy economic backdrop. They calculate that people will prefer "honesty" and "harsh truths" to impossible promises.

As the two main parties go head-to-head on the economy, Gordon Brown will propose a global crackdown on the pay and bonuses enjoyed by bankers. Addressing the Scottish Labour conference in Dundee following his talks in Washington with President Barack Obama, he will call for international principles on pay in the financial industry to be agreed at the summit of G20 countries in London next month.

Ed Balls, the Secretary of State for Children, Schools and Families and Mr Brown's former chief economic adviser, admitted yesterday that Labour's regulation of the banks since 1997 had been too soft. "We underestimated the risks," he said. He is the latest minister to admit Labour made mistakes, as the Prime Minister comes under pressure to apologise for them.

Mr Osborne will argue that the banking crisis is a reflection of Britain's "broken economy" and dismiss Mr Brown's claim that it was "made in America".

Promising to "confront some uncomfortable truths", he will say: "It means telling people that they can't rely on massive increases in house prices to fund their retirement, and that they will have to save for a deposit to buy their own home. It means pointing out that increasing profits through ever-higher debts is not a sustainable way to build a business." He will unveil proposals to rebalance the system of corporation tax paid by business so that firms no longer have a financial incentive to go deeper into debt.

The shadow Chancellor will warn that difficult public-sector reforms will be needed. He will declare: "The unsustainable debts in our banks are a reflection of unsustainable debts in our households, our companies and our government. Our economy is broken and Gordon Brown's sticking plasters won't mend it. We need a new model of growth."

Tory MPs demanded a statement on why Lord Myners, the minister responsible for the City, has a £99,800-a-year pension linked to the Royal Bank of Scotland, as The Independent revealed yesterday. Lord Myners was a director of the RBS subsidiary NatWest and qualified for the pension after 16 years at the fund managers Gartmore, which was owned by NatWest. He has led the Government's talks with RBS, which has received more than £30bn of taxpayers' money, but denies approving the £703,000-a-year pension handed to its former chief executive Sir Fred Goodwin.

Alan Duncan, the shadow Commons Leader, told MPs: "Might Lord Myners' willingness to rubber-stamp Sir Fred's payoff have something to do with the fact that Lord Myners himself has got a £100,000 pension entitlement from the RBS Group?"

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
Life and Style
beautyBelgian fan lands L'Oreal campaign after being spotted at World Cup
Arts and Entertainment
Characters in the new series are based on real people, say its creators, unlike Arya and Clegane the Dog in ‘Game of Thrones’
tv'The Last Kingdom' embraces politics, religion, warfare, courage, love and loyalty, say creators
News
people
Life and Style
tech
News
Justin Bieber performing in Paris earlier this year
people
Arts and Entertainment
Martin Freeman and Lauren O'Neil in Jamie Lloyd's Richard III
theatreReview: The monarch's malign magnetism and diabolic effrontery aren’t felt
Arts and Entertainment
'Molecular Man +1+1+1' by Jonathan Borofsky at Yorkshire Sculpture park
tv
News
Glamour magazine hosts a yoga class with Yogalosophy author Mandy Ingber on June 10, 2013 in New York City.
newsFather Padraig O'Baoill said the exercise was 'unsavoury' in a weekly parish newsletter
Extras
indybest
News
people'She is unstoppable', says Jean Paul Gaultier at Paris show
Sport
Alexis Sanchez and apparently his barber Carlos Moles in Barcelona today
football
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

Executive Assistant - London - up to £40,000 + bonus

£33000 - £40000 per annum + bonus + benefits: Ashdown Group: Executive Assista...

Social Media Director (Global) - London Bridge/Southwark

£45000 - £50000 per annum + Benefits: Ashdown Group: Social Media Director (Gl...

HR Advisor - 6 months FTC Wimbledon, SW London

£35000 - £40000 per annum + Benefits: Ashdown Group: HR Advisor - 6 Months Fix...

IT Manager - Tolworth, Surrey - £40,000

£37000 - £40000 per annum: Ashdown Group: IT Manager - Tolworth, Surrey - £40,...

Day In a Page

The true Gaza back-story that the Israelis aren’t telling this week

The true Gaza back-story that the Israelis aren’t telling this week

A future Palestine state will have no borders and be an enclave within Israel, surrounded on all sides by Israeli-held territory, says Robert Fisk
A History of the First World War in 100 Moments: The German people demand an end to the fighting

A History of the First World War in 100 Moments

The German people demand an end to the fighting
New play by Oscar Wilde's grandson reveals what the Irish wit said at his trials

New play reveals what Oscar Wilde said at trials

For a century, what Wilde actually said at his trials was a mystery. But the recent discovery of shorthand notes changed that. Now his grandson Merlin Holland has turned them into a play
Can scientists save the world's sea life from

Can scientists save our sea life?

By the end of the century, the only living things left in our oceans could be plankton and jellyfish. Alex Renton meets the scientists who are trying to turn the tide
Richard III, Trafalgar Studios, review: Martin Freeman gives highly intelligent performance

Richard III review

Martin Freeman’s psychotic monarch is big on mockery but wanting in malice
Hollywood targets Asian audiences as US films enjoy record-breaking run at Chinese box office

Hollywood targets Asian audiences

The world's second biggest movie market is fast becoming the Hollywood studios' most crucial
Grindr founder Joel Simkhai: 'I've found love on my dating app - and my mum keeps trying to hook me up!'

Grindr founder Joel Simkhai: 'I've found love on my dating app'

Five years on from its launch and Grindr is the world's most popular dating app for gay men. Its founder Joel Simkhai answers his critics, describes his isolation as a child
Autocorrect has its uses but it can go rogue with embarrassing results - so is it time to ditch it?

Is it time to ditch autocorrect?

Matthew J X Malady persuaded friends to message manually instead, but failed to factor in fat fingers and drunk texting
10 best girls' summer dresses

Frock chick: 10 best girls' summer dresses

Get them ready for the holidays with these cool and pretty options 
Westminster’s dark secret: Adultery, homosexuality, sadomasochism and abuse of children were all seemingly lumped together

Westminster’s dark secret

Adultery, homosexuality, sadomasochism and abuse of children were all seemingly lumped together
A History of the First World War in 100 Moments: Dulce et decorum est - a life cut short for a poet whose work achieved immortality

A History of the First World War in 100 Moments

Dulce et decorum est: a life cut short for a poet whose work achieved immortality
Google tells popular music website to censor album cover art in 'sexually explicit content' ban

Naked censorship?

The strange case of Google, the music website and the nudity take-down requests
Howzat! 8 best cricket bats

Howzat! 8 best cricket bats

As England take on India at Trent Bridge, here is our pick of the high-performing bats to help you up your run-count this summer 
Brazil vs Germany World Cup 2014 comment: David Luiz falls from leader figure to symbol of national humiliation

David Luiz falls from leader figure to symbol of national humiliation

Captain appears to give up as shocking 7-1 World Cup semi-final defeat threatens ramifications in Brazil