Government must act now over economy, says David Cameron

David Cameron accused the Government today of putting "naked political calculation" ahead of Britain's economic interest by failing to promise immediate public spending cuts.

The Tory leader said it was "good news" that official statistics are expected to confirm tomorrow that Britain is out of recession.

But he said that would mean nothing without urgent action to tackle the £178 billion budget deficit, warning that the UK was borrowing £6,000 a second.

The Opposition have said they would impose cuts in a post-election emergency budget and Mr Cameron, at his regular press conference, said it was time for Labour to "do the right thing".

"Our recession, the great recession, is the longest and deepest since the war and coming out of recession does not mean that our debt crisis is over," he told reporters.

"In fact far from it: Labour's debt crisis is now the biggest threat to our recovery so we will only get this recovery right if we start right now on a proper debt reduction plan."

Britain was borrowing more than Greece, whose debt had already sparked the sort of economic crisis that could see soaring interest rates and unemployment if repeated here, he said.

"The Government's promise to halve the deficit in four years has frankly failed to convince those who we need to have confidence in Britain's economic future.

"A key part of any plan is at least some early action to show you are serious in your intent. That means some reduction in public spending plans in this coming financial year.

"The Government's approach, to coin a phrase, is to do nothing.

"If we are going to have to wait for May for an election and if there is going to be a Budget in March, they need to show how they are going to start now.

"They are about to tell us that the economy is growing so they have no further excuse to delay action except naked political calculation.

"It is time they realised that it is time to do the right thing."

The Opposition leader compared Government policy with a personal credit card - saying "the more we spend and the longer we wait to pay off our bills the worse it gets".

"We have just had the worst public borrowing figures for any December on record, we face the biggest budget deficit of any large economy, we are borrowing money at the rate of around £6,000 every second - which means that every five seconds the Government borrows more than the average British person earns in a year.

"We are spending more money on the interest on our debt than on almost anything else. We cannot go on like this."

Mr Cameron said that since the world "lost confidence" in Greece's ability to pay its bills, the country's interest rates had gone by an extra 2.5 points.

"Britain is borrowing more than Greece so if we follow Greece and have our credit rating downgraded, the interest bill on a £150,000 mortgage could go up by more than £200 a month, the cost of credit for businesses would go up, more jobs would be lost and we would be paying billions more in taxes each year just to service our debt."

The UK is borrowing around £178 billion to bridge the gap between what it spends and collects from tax and other revenues.

Chancellor Alistair Darling has promised a round of "tough, difficult and non-negotiable" spending cuts to slash the ballooning deficit but has also said the Tories risked costing the economy up to £26 billion by bringing in spending cuts too early.

Shadow chancellor George Osborne set out earlier this month for the first time Tory plans to make in-year reductions in Labour's £707 billion spending plans for 2010/11, set out in December's Pre-Budget Report.

The Conservatives criticised Mr Darling for announcing a 2% real-terms increase in state spending in the PBR, rather than finding savings to start reducing the record deficit.

Mr Osborne has named spending on advertising and consultants, tax credits for people earning more than £50,000 and Child Trust Funds for better-off families as items which would be cut during the coming financial year.

An emergency budget as early as June could wipe out the departmental budgets outlined in Labour's final budget just weeks earlier.

Mr Cameron also renewed his calls for a full report into the brutal assault of two young boys in South Yorkshire to be made public.

"It is wrong, absolutely wrong, that something like this can happen and all that gets published is a summary that does not mention the name of any of the people who missed sign after sign of what has gone wrong," he said.

"If we become the government, this will change and reports into cases like these will be published."

The Tory leader defended his decision last week to highlight the Edlington case as part of his "mending the broken society" campaigning.

Mr Cameron accused the Government of "moral cowardice" in failing to deal with the budget deficit adequately.

"You cannot do it all in one year, in two years, in three years, of course you can't," he said.

"You cannot deal with this deficit through spending alone, of course you can't.

"But you can show that you are serious about it, and it's time for this Government to get serious, to put away their pathetic dividing lines, to put away their moral cowardice in not dealing with this issue, and behave like a grown-up Government looking the British public in the eye and saying 'We have a problem, we're going to deal with it with you', as we've been suggesting now for months and months and months."

Asked about Tory plans to recognise marriage in the tax system, Mr Cameron said "no-one can be in any doubt that the Conservative Party is utterly serious about backing marriage, including through the tax system".

But he again refused to spell out what form such a move would take, saying that the scale of the deficit facing the Government after the next election was unprecedented.

"It does mean we have to be careful about making specific pledges until we can match them with specific figures," he said.

Asked whether he would rather increase VAT or National Insurance, the Tory leader said: "We don't want to see either, but... you can't as a responsible Opposition rule out tax rises.

"The key is to do what you can to try and prevent them and that's where I come back to this early action on spending reduction in terms of the budget, because the more you do there the less you will have to do with anything else."