Tories may cut defence spending, says Osborne

Major defence projects may not be safe from public spending cuts if the Tories win the next general election, shadow chancellor George Osborne hinted today.

He suggested "break clauses" in contracts for two new aircraft carriers, Eurofighter aircraft and the A400M transporter were among things a new administration would like to examine.

Mr Osborne spoke out as he accused Gordon Brown of preparing to "hoist the white flag" ahead of a speech to the TUC later in which the Prime Minister is expected to explicitly admit the need for spending "cuts".

The Conservatives had been right to warn of the need to restrain spending, he said, with Labour engaged in a "dangerous fantasy" that the UK could spend its way out of trouble.

Asked whether his party would be able to identify specific savings quickly enough for a snap post-poll budget, Mr Osborne conceded that the Opposition faced some hurdles.

"The resources of an opposition are limited. I have probably 10 people working for me; there are about 1,000 people working for the Chancellor and the Treasury.

"And there are some things we do not know: I do not know the details of some of the major defence projects which have been the subject of speculation in the newspapers.

"I simply do not know what the break clauses are in the Eurofighter programme or the A400M or the aircraft carriers. We do have those limitations."

Only health and international aid have been spared the prospect of Tory cuts, with defence proving one of the most contentious areas.

Both Labour and the Conservatives are committed to a defence review after the election.

Mr Osborne told a conference organised by The Spectator magazine that the Government's public acceptance of the need for spending cuts was a vindication of Tory policy.

"Gordon Brown is on the eve of a complete capitulation. Whether he hoists the white flag today at the TUC or later at his conference or when Parliament returns, we will see," he said.

"But hoist that white flag he will. For he and his style of politics have been comprehensively defeated. And it is the Conservatives who have made the right judgment about the biggest economic question that faces this country."

He went on: "For months we endured the onslaught of Gordon Brown and Labour Cabinet ministers as they spoke in apocalyptic terms about what would happen if you cut spending.

"Time and again this summer in the House of Commons, David Cameron fought back across the despatch box and challenged the Prime Minister to tell the truth.

"When people ask 'are the Conservatives up to it?', I say look how David Cameron and our party told the truth about the national debt, told the truth about public spending and won the biggest economic argument of the day.

"We have shown in the way we have conducted ourselves that we now command the centre of British politics, and we have the character, the judgment and the courage to take this country through the difficult times ahead."

He questioned ministers' claims to have "seen Britain through" the downturn, pointing to faster recovery in other countries and faster-rising unemployment, but said he did expect the UK to come out of recession this year.

"It is increasingly clear that the Labour Party is either unable or unwilling to learn the lessons of the last decade," he said.

"Their strategy for the recovery is to try and pump the bubble back up with more Government spending and debt-fuelled consumption.

"As with our failed system of financial regulation, or our broken politics, they seem to think we can carry on much as before, with a few tweaks here and there.

"That is not just the wrong conclusion, it is a dangerous fantasy."

Mr Osborne also criticised a return to large bank bonuses.

"We are underwriting these profits for a purpose - to help recapitalise the banks and support the broader economy, not so that they can be paid out as huge bonuses or distributed as excess returns to shareholders," he said.

"Indeed, if banks pay out huge bonuses on the back of taxpayer support instead of using profits to rebuild their balance sheets, that is not only bad for the broader economy, it is bad for the City itself.

"It is not in the interests of the financial services sector as a whole to have a small number of Government-subsidised players distorting competition by using taxpayer support to bid up remuneration levels."



Mr Osborne said a new Tory administration would present a Budget within weeks of taking office.

"I would anticipate a Budget fairly shortly after the General Election. Whether it would be in June or July would be to be decided," he said.

The poll is expected to be called for May next year.

"But absolutely we would have an early Budget and we need to make early and big decisions about dealing with the deficit."

But he denied it would amount to an "emergency" Budget - insisting it was normal practice after a change of government in the spring.

"Labour did it in 1997 and I think Margaret Thatcher did in 1979," he said.

"It is perfectly reasonable at a time of economic distress that we get on with announcing economic policies."

Start your day with The Independent, sign up for daily news emails
News
The guide, since withdrawn, used illustrations and text to help people understand the court process (Getty)
newsMinistry of Justice gets law 'terribly wrong' in its guide to courts
News
Bobbi Kristina Brown with her mother Whitney Houston in 2011
people
News
Starting the day with a three-egg omelette could make people more charitable, according to new research
scienceFeed someone a big omelette, and they may give twice as much, thanks to a compound in the eggs
News
Top Gun actor Val Kilmer lost his small claims court battle in Van Nuys with the landlord of his Malibu mansion to get back his deposit after wallpapering over the kitchen cabinets
people
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
News
The actress Geraldine McEwan was perhaps best known for playing Agatha Christie's detective, Miss Marple (Rex)
peopleShe won a Bafta in 1991 for her role in Oranges Are Not The Only Fruit
News
newsPatrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad
News
Robert Fraser, aka Groovy Bob
peopleA new show honours Robert Fraser, one of the era's forgotten players
Life and Style
Torsten Sherwood's Noook is a simple construction toy for creating mini-architecture
tech
Sport
David Silva celebrates with Sergio Aguero after equalising against Chelsea
footballChelsea 1 Manchester City 1
News
i100
2015 General Election
May2015

Poll of Polls

Latest stories from i100
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

Recruitment Genius: Online Media Sales Trainee

£15000 - £30000 per annum: Recruitment Genius: Now our rapidly expanding and A...

Recruitment Genius: Public House Manager / Management Couples

£15000 - £20000 per annum: Recruitment Genius: Are you passionate about great ...

Recruitment Genius: Production Planner

£20000 - £30000 per annum: Recruitment Genius: This fast growing reinforcing s...

Recruitment Genius: General Factory Operatives

£18000 - £35000 per annum: Recruitment Genius: This fast growing reinforcing s...

Day In a Page

As in 1942, Germany must show restraint over Greece

As in 1942, Germany must show restraint over Greece

Mussolini tried to warn his ally of the danger of bringing the country to its knees. So should we, says Patrick Cockburn
Britain's widening poverty gap should be causing outrage at the start of the election campaign

The short stroll that should be our walk of shame

Courting the global elite has failed to benefit Britain, as the vast disparity in wealth on display in the capital shows
Homeless Veterans appeal: The rise of the working poor: when having a job cannot prevent poverty

Homeless Veterans appeal

The rise of the working poor: when having a job cannot prevent poverty
Prince Charles the saviour of the nation? A new book highlights concerns about how political he will be when he eventually becomes king

Prince Charles the saviour of the nation?

A new book highlights concerns about how political he will be when he eventually becomes king
How books can defeat Isis: Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad

How books can defeat Isis

Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad
Judith Hackitt: The myths of elf 'n' safety

Judith Hackitt: The myths of elf 'n' safety

She may be in charge of minimising our risks of injury, but the chair of the Health and Safety Executive still wants children to be able to hurt themselves
The open loathing between Barack Obama and Benjamin Netanyahu just got worse

The open loathing between Obama and Netanyahu just got worse

The Israeli PM's relationship with the Obama has always been chilly, but going over the President's head on Iran will do him no favours, says Rupert Cornwell
French chefs get 'le huff' as nation slips down global cuisine rankings

French chefs get 'le huff' as nation slips down global cuisine rankings

Fury at British best restaurants survey sees French magazine produce a rival list
Star choreographer Matthew Bourne gives young carers a chance to perform at Sadler's Wells

Young carers to make dance debut

What happened when superstar choreographer Matthew Bourne encouraged 27 teenage carers to think about themselves for once?
Design Council's 70th anniversary: Four of the most intriguing prototypes from Ones to Watch

Design Council's 70th anniversary

Four of the most intriguing prototypes from Ones to Watch
Dame Harriet Walter: The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment

Dame Harriet Walter interview

The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment
Art should not be a slave to the ideas driving it

Art should not be a slave to the ideas driving it

Critics of Tom Stoppard's new play seem to agree that cerebral can never trump character, says DJ Taylor
Bill Granger recipes: Our chef's winter salads will make you feel energised through February

Bill Granger's winter salads

Salads aren't just a bit on the side, says our chef - their crunch, colour and natural goodness are perfect for a midwinter pick-me-up
England vs Wales: Cool head George Ford ready to put out dragon fire

George Ford: Cool head ready to put out dragon fire

No 10’s calmness under pressure will be key for England in Cardiff
Michael Calvin: Time for Old Firm to put aside bigotry and forge new links

Michael Calvin's Last Word

Time for Old Firm to put aside bigotry and forge new links