Osborne tries to win back trust after 'wobble' on spending cuts

Shadow Chancellor says safeguarding Britain's credit rating will be his priority

George Osborne invited voters to judge an incoming Tory government on an eight-point "contract" on economic policy yesterday but refused to spell out how deeply the Conservatives would cut public spending this year.

The Shadow Chancellor laid out eight key "benchmarks" but came under pressure from business leaders to reveal more detailed proposals on cuts. He admitted he was taking a "political gamble" by making his first priority to safeguard Britain's AAA credit rating on the international markets because some investors believe there is an 80 per cent chance of a downgrade. His pledge could backfire spectacularly if Britain were downgraded soon after a Tory election victory.

In a keynote speech, Mr Osborne sought to steady Tory nerves after David Cameron admitted the party would not make "swingeing cuts" in the 2010-11 financial year. Although the Tories deny a U-turn, the move was seen as a tactical retreat because big cuts later this year might have put the fragile economic recovery at risk.

In a shift away from previous Tory warnings about an "age of austerity," Mr Osborne outlined a "new economic model" to secure growth. He promised a "more solid" private sector recovery driven by investment and exports, instead of the consumer borrowing and government debt seen under Labour.

"We will set out a plan in our first Budget to eliminate a large part of the structural deficit in the first Parliament. We will make a start in 2010," he said. But under repeated questioning from journalists, he declined to put a figure on this year's cuts. He said £1.5bn of savings he trailed last autumn were "examples" of cuts but refused to say whether that would be the final figure for 2010-11. Tory officials insisted the party would cut faster than Labour.

The Shadow Chancellor said people should hold a Tory government to account against the eight benchmarks. The others are: creating a more balanced economy; to "get Britain working" by reducing youth unemployment; easing tax and regulatory burdens on business; raising the private sector's share of the economy; boosting the productivity of the public sector; creating a safer banking system and a "greener economy" by cutting greenhouse gas emissions and winning a larger share of global markets for low carbon technologies.

Mr Osborne said the Tory blueprint had won the backing of several prominent businessmen including Sir Stelios Haji-Ioannou, founder of easyJet; Stephen Murphy, chief executive of Virgin Group and Andrew Witty, chief executive of GlaxoSmithKline.

Business groups welcomed the Tory plan but called for more clarity on cuts. Richard Lambert, director general of the CBI, said: "Business will now want to see more detailed plans explaining how these proposals could be delivered, and over what sort of timescales."

Tory policy: The eight-point plan

1. Macroeconomic stability Preserve Britain's AAA credit rating by eliminating a large part of the structural deficit over a parliament. Verdict: Gamble. More details needed on cuts.

2. A more balanced economy Create conditions to boost exports, business investment and saving as a share of GDP. Verdict: Harder with a slimmed-down financial sector.

3. Get Britain working Reduce youth unemployment and the number of children in workless households. Verdict: Where's the money coming from?

4. Britain open for business Improve UK's international rankings for tax competitiveness and business regulation. Verdict: Easier said than done.

5. Ensure the whole country shares in rising prosperity Raise the private sector's share of the economy in all regions, especially outside London and the South-east. Verdict: At odds with Tory pledge to end "top-down" government.

6. Reform public services Deliver better schools and a better NHS. Verdict: harder when budgets are cut.

7. Safer banking system Reform bank regulation and structure. Verdict: Good – but banks will fight their corner.

8. Greener economy Reduce UK greenhouse gas emissions and increase share of global markets for low-carbon technologies. Verdict: Same as Labour.

Start your day with The Independent, sign up for daily news emails
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs General

Recruitment Genius: Cleaner

£15000 - £16500 per annum: Recruitment Genius: If you've got first class custo...

Recruitment Genius: Mobile Applications Developer / Architect - iOS and Android

Negotiable: Recruitment Genius: This is a great opportunity to join a medium s...

Recruitment Genius: Telesales Account Executive - £40K OTE

£11830 - £40000 per annum: Recruitment Genius: Working in a friendly, sales ta...

Recruitment Genius: Web Designer

£15000 - £27000 per annum: Recruitment Genius: One of the UK's leading web des...

Day In a Page

Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'
10 best statement lightbulbs

10 best statement lightbulbs

Dare to bare with some out-of-the-ordinary illumination
Wimbledon 2015: Heather Watson - 'I had Serena's poster on my wall – now I'm playing her'

Heather Watson: 'I had Serena's poster on my wall – now I'm playing her'

Briton pumped up for dream meeting with world No 1
Wimbledon 2015: Nick Bollettieri - It's time for big John Isner to produce the goods to go with his thumping serve

Nick Bollettieri's Wimbledon Files

It's time for big John Isner to produce the goods to go with his thumping serve
Dustin Brown: Who is the tennis player who knocked Rafael Nadal out of Wimbeldon 2015?

Dustin Brown

Who is the German player that knocked Nadal out of Wimbeldon 2015?
Tour de France 2015: Twins Simon and Adam Yates have a mountain to climb during Tour of duty

Twins have a mountain to climb during Tour of duty

Yates brothers will target the steepest sections in bid to win a stage in France
John Palmer: 'Goldfinger' of British crime was murdered, say police

Murder of the Brink’s-MAT mastermind

'Goldfinger' of British crime's life ended in a blaze of bullets, say police
Forget little green men - aliens will look like humans, says Cambridge University evolution expert

Forget little green men

Leading evolutionary biologist says aliens will look like humans
The Real Stories of Migrant Britain: An Algerian scientist adjusts to life working in a kebab shop

The Real Stories of Migrant Britain

An Algerian scientist struggles to adjust to her new life working in a Scottish kebab shop
Bodyworlds museum: Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy

Dying dream of Doctor Death

Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy
UK heatwave: Temperature reaches 39.8 degrees on Central Line - the sweatiest place in London

39.8 degrees recorded on Tube

There's hot (London) and too damn hot (the Underground). Simon Usborne braved the Central line to discover what its passengers suffer
Kitchens go hi-tech: From robot chefs to recipe-shopping apps, computerised cooking is coming

Computerised cooking is coming

From apps that automatically make shopping lists from your recipe books to smart ovens and robot chefs, Kevin Maney rounds up innovations to make your mouth water