Europe takes on Labour

Britain needs to be more specific about how it will reduce the deficit, the European Commission says
Britain needs to be more specific about how it will reduce the deficit, the European Commission says

By Ian Dunt

Labour faces a tough new critic of its economic policy, with the European Commission (EC) demanding Britain does more to cut its deficit.

The EC said it wants much clearer description of the measures which will be taken to reduce the UK's spiralling debt.

The comments could not come at a worse time, with chancellor Alistair Darling drawing up next week's pivotal Budget in Number 11.


Issue of the Day: Europe vs Labour

The Commission will publish its assessment of Britain's debt situation tomorrow, but a leaked draft reads: "The fiscal strategy in the convergence programme is not sufficiently ambitious and needs to be significantly reinforced.

"A credible timeframe for restoring public finances to a sustainable position requires additional fiscal tightening measures beyond those currently planned."

But the Tories welcomed the news as vindication of their criticism of the government.

"This is a heavy blow for Gordon Brown's credibility," shadow chancellor George Osborne said.

"The Conservatives have been arguing that we need to reduce our record budget deficit more quickly in order to support the recovery.

"Our argument is backed by credit rating agencies, business leaders, international investors and now the European Commission."

Speaking on the Today programme this morning, chief secretary to the Treasury Liam Byrne suggested the EC was wrong.

"We think the EU's got the judgment wrong, we think the plan they've set out would require us to take something like £20bn more out of the economy... that would do irreparable damage to public services," he said.

Attacking suggestions that the Tories were clearer in thier plans to cut spending, Mr Byrne said: "What the Conservatives have done over the last two months is deliver press release after press release which delivers the clarity of a mucky puddle."

Media reports yesterday indicated the Conservatives were preparing to reveal spending cuts they would make this fiscal year, although the party is expected to wait until the Budget before releasing any details.

Mr Darling will present the Budget to parliament on March 24th.

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