UK govt says opposition in disarray on budget cuts

* Govt says premature spending cuts would be devastating

* Says economic road ahead remains bumpy

* Opposition Conservatives tone down tough talk on cuts

By Tim Castle

LONDON, Feb 1 (BestGrowthStock) – Britain’s Labour government, seen
losing an election within months, said on Monday opposition
Conservatives were in disarray over spending and that their plan
for cuts this year threatened economic recovery.

Conservative leader David Cameron appeared to backtrack on
Sunday over spending, telling BBC television he did not plan
“swingeing cuts” in 2010 if he won polls expected in May. But a
Conservative official argued the party was consistent in saying
it would make only a start in cutting spending this year.

Business minister Peter Mandelson, effectively deputy to
Prime Minister Gordon Brown, told a news conference:

“How much is it (the Conservative Party) planning to take
out of this year’s spending? So far all we see is confusion and
disarray.

“The knock-on impact in terms of jobs and growth from taking
billions of pounds out of the economy this year would be
devastating…Put simply, the Tories (Conservatives) would
strangle the recovery at birth.”

Both Labour and the Conservatives have declined to detail
ahead of the election what specific areas they would cut,
although both acknowledge severe reductions will be required.

Cameron, whose party is favourite to win the election,
stressed the importance of “making a start” on budget cutbacks
in 2010, a year earlier than Labour intends.

Labour has pledged to halve Britain’s record 178 billion
pound ($290 billion) budget deficit over 4 years, but says it
will delay reductions until 2011 to avoid damaging a fragile
recovery.

Britain crept out of an 18-month recession at the end of
2009 according to data released last week, but only by the
narrowest margin, with the economy growing by just 0.1 percent
between October and December.

ELECTION FEARS

Financial markets fear an inconclusive election outcome
would make it hard for the next government to take unpopular
decisions on tax and spending.

Opinion polls over the weekend showed the Conservative lead
over Labour narrowing to less than 10 points, a gap analysts say
could lead to a hung parliament.

The political jousting came as U.S. President Barack Obama
said he would cut 120 federal projects, including a mission to
return to the moon, after he projected America’s deficit would
soar to a fresh record in 2010.

On Wednesday, Labour will publish a much anticipated
consultation document on future defence spending.

The Times newspaper reported that Labour would pledge to
protect key procurement projects including two aircraft carriers
and the Eurofighter programme.

Conservative treasury spokesman Philip Hammond denied there
had been any change to his party’s economic policy.

“We have been absolutely consistent in saying that we need
to make a start in 2010 to cut public spending,” he told BBC
television.

Investment Basics
(For a summary of recent polls, click on [ID:nUKPOLLS20]
(Editing by Ralph Boulton)

UK govt says opposition in disarray on budget cuts