August 11, 2010 / 12:44 PM / in 9 years

Coalition says Labour's economic legacy is "criminal"

LONDON (Reuters) - Britain’s coalition sought to shift the blame for looming spending cuts to Labour Party on Wednesday, accusing the last government of “criminal” mishandling of the public finances.

Energy and Climate Change Secretary Chris Huhne arrives at the 10 Downing Street official residence of Prime Minister David Cameron in London May 12, 2010. REUTERS/Suzanne Plunkett

Conservative Party Chairman Sayeeda Warsi said Labour was guilty of “wild and reckless” spending during 13 years in office that helped to create the biggest peacetime budget deficit.

The Labour Party, which says the coalition’s cuts threaten the economic recovery, dismissed her comments as “posturing” during parliament’s traditionally quiet summer break.

Speaking at a news conference with Energy Secretary Chris Huhne, Warsi said: “By running up colossal debts on the nation’s credit card ... what Labour did to the British people was frankly criminal.”

Blaming the recession, lower tax revenues and the banking crisis for the deficit was wrong and Labour leadership candidates should accept their share of the blame for the state of the public finances, she added.

She quoted three former ministers and possible future Labour leaders — David Miliband, Ed Miliband and Ed Balls — as saying that high public spending was not the main cause of the deficit.

“These men are simply in denial,” Warsi said. “They absolutely refuse to face up to the harm they have caused.”

Huhne, a Liberal Democrat, said former Labour prime minister Gordon Brown had tried to woo voters by raising public spending by 10 percent in real terms in the two financial years before voters went to the polls in May.

“Spending went from 44 pence in every pound generated by our economy in 2007 to 51 percent in 2009. Taxes went down by one pence in the pound,” he said. “Brown tried to buy the election.”

A Labour spokeswoman rejected Warsi and Huhne’s criticism, saying: “This is nothing more than August posturing by Tory and LibDem ministers who should have better things to do.

“The last Labour government had made many efficiency savings and had a realistic plan to half the deficit within four years.”

Former chancellor Alistair Darling, now Labour’s shadow chancellor, said the coalition backed a “reckless style of austerity economics” that threatened to derail the recovery.

“It will hit confidence and it will hit jobs,” he added.

After taking power in May, Prime Minister David Cameron said his biggest priority was tackling the deficit, running at around 11 percent of national output.

Finance minister George Osborne has asked most departments to find savings of at least 25 percent. He will announce details of the cuts on October 20. Unions fears widespread job cuts in the public sector.

Editing by Tim Castle

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