Britain's opposition Conservatives risk throwing the economy back into recession by withdrawing stimulus measures too early, Business Secretary Peter Mandelson said today.
Seeking to help ruling Labour recover ground ahead of an election due by next June, Mr Mandelson said the party would be "wise spenders, not big spenders", reviving a slogan from its 1997 campaign when its 12-year grip on power began.
"At the G20 finance ministers' meeting [this month] there was unanimity that the stimulus should continue. Yet alone, and in their haste for cuts, the Tories [Conservatives] are arguing for its immediate withdrawal before recovery is fully under way," Mr Mandelson said in a speech hosted by a Labour group.
"To do so when we are not out of the woods would risk triggering an economic relapse," he added, saying Labour would protect frontline public services.
The centre-right Conservatives are well ahead in opinion polls before an election in which reining in public spending and cutting a £175 billion budget deficit are likely to be central themes.
Mr Mandelson said the Conservatives wanted to create a smaller state and regarded the need for public spending constraint with "thinly disguised zeal". Conservative plans to cut public spending in a recession were "economic lunacy", he said.
Mr Mandelson said the government would have to "prioritise and economise" but did not say how Labour would go about cutting the deficit.
"It is growth that will be the biggest antidote to debt and will determine how far and fast we are able to pay it down in the future," he said.
Opposition finance spokesman George Osborne said it was the prospect of a cost-cutting Conservative government was helping to maintain investor faith in Britain.
"International confidence is sustained only because people increasingly expect there to be a Conservative government committed to spending control and tackling imbalances," he wrote in London's Evening Standardnewspaper.
Reuters