Brown ‘failed to prepare for rainy day’
Public servants are being offered below-inflation pay rises because the government failed to plan for the economic downturn, the Conservatives claimed today.
Shadow Chancellor George Osborne said Gordon Brown had failed to make Britain “prepared if rainy days lie ahead” during his ten-year control of the Treasury.
As a result Britain has been left with the “worst public finances in Europe” and is the worst equipped country in the developed world to buffer an economic downturn.
Speaking at the London School of Economics, Mr Osborne criticised: “Our competitors used the fat years to prepare for the lean years. Britain did not.”
Britain now faces rising inflation and Mr Brown has said public sector pay awards must show “discipline” to offset further rises.
Public sector workers have baulked at the prime minister’s offer of a staged 2.5 per cent pay award, which they claim is devalued to a below-inflation 1.9 per cent.
Mr Osborne said today: “The reason why Gordon Brown is giving public servants pay rises below the cost of living is because he hasn’t got any money spare despite fifteen years of growth.
“So with little room for manoeuvre, with no money put aside for a rainy day, what is the solution? Well as the old adage goes: the time to fix the roof is when the sun’s shining.
“Savage spending cuts now to deal with the budget deficit would not make economic sense.”
Mr Osborne claimed it was “too late” to prepare public finances for the coming downturn and hit out at Mr Brown’s claims towards economic competence.
The prime minister has spent a decade “boasting” about economic growth “but his actions betray him,” the shadow chancellor said.
He claimed: “It is his economic incompetence and fiscal incontinence that have left Britain more exposed than any other developed economy to the current crisis.”
Today’s speech marks the latest attempt by the Conservatives to rubbish Mr Brown’s economic credentials, with the prime minister himself warning Britons to expect an economic downturn.
Labour attacked the Conservatives’ attempts to further “talk the British economy down”, claiming Mr Osborne had failed to offer a workable solutions.
Andy Burnham, chief secretary to the Treasury, said: “Instead, [Mr Osborne] is once again promising lower borrowing, on top of massive tax cuts and dozens of unfunded spending pledges.
“The sums simply don’t add up and the black hole in his tax and spend plans would put jobs and mortgages at risk.”
The government maintains it is in a sufficiently strong position to face international uncertainty, credited to Mr Brown’s oft-mentioned “tough decisions”.
But Mr Osborne today said the government had in fact shown a lack of leadership over Northern Rock, which has been forced to borrow in excess of £26 billion from the Bank of England to avoid collapse.
The Newcastle-based lender has announced it plans to sell of more than £2 billion of its mortgage assets to US-based JP Morgan.
The revenue will be used to repay some of the Bank of England’s estimated £26 billion loan.
Liberal Democrat economic spokesman said the sale was “probably desirable” if it would reduce further borrowing from the government.
However, some analysts are concerned the bank could have conceded its best assets, with ministers consistently stressing the strength of Northern Rock’s mortgage book.
