SHADOW chancellor George Osborne has committed an incoming Conservative government to preserving Britain’s triple-A credit rating.
But he acknowledged the target was a “very tough” challenge for the Tories, who would have to use an emergency budget within 50 days of taking office to reassure the bond markets they can regain control of state finances.
The Conservatives claim Labour’s failure to deliver credible plans to reduce Britain’s record £178bn borrowing has raised the real threat of a downgrade in the rating, which would force up interest rates for companies and householders.
But in setting out eight key benchmarks for the economy, Mr Osborne included no target for cutting the deficit.
The shadow chancellor said only that he would eliminate “a large part” of it within the first Parliament.
Prime Minister Gordon Brown insisted he was right to allow state borrowing to rise in the recession, saying it was “essential for us to have the recovery that is necessary for the economy”.
Appearing before the House of Commons Liaison Committee, he warned: “If you were to cut that deficit too quickly and if you were to cut it now – this year, just as we are trying to get out of recession – then the economy would suffer, more jobs would be lost, more businesses would go under, more homes would be repossessed.
“Those people who want to cut the deficit immediately and cut it very fast are making a mistake with the economy, which needs the level of support we are giving it.”