1pm Update: In response to this, a Conservative spokesman has just emailed me to say:

"Our position on protected areas of spending for 2009-10 is the same – we have ring fenced the health, education, defence and aid departmental budgets, but would spend £5bn less than Labour on other things."

OsborneAndrewMarrYesterday it was Frank Field; today it is shadow chancellor George Osborne who is warning the public that drastic action will be required in order to deal with the "atrocious" state of the public finances.

Mr Osborne has given an interview to the FT (of which there is more inside the paper here) in which he asserts that Labour's projected 1.1% annual increase in public spending between 2011 and 2014 is "unsustainable" and that it will be spending cuts rather than tax rises which account for reducing the the fiscal deficit:

"You don’t want to kill off the recovery with heavy tax rises that bring you back to square one… I’ve mentally adjusted myself and David Cameron has mentally adjusted himself to the fact that we are going to have to take some very difficult decisions for the good of the country."

But anyone expecting a swathe of detailed proposals in response to next week's Budget – or at any point before the general election – will be disappointed:

Mr Osborne said the Conservatives would not be drawn into a rerun of the last election, when they came under fire for revealing detailed plans of proposed cuts. He signalled that the Tories would present most of their tax and spending policy in terms of broad principles only, rather than allowing the run-up to the election expected next summer to become “drowned in numbers”.

Whereas Frank Field mooted a cut in the NHS budget, the Shadow Chancellor still refuses to do so. Mr Osborne is still insistent that the health budget is protected from future cuts (as is that for overseas aid) – although no other area of spending is guaranteed such ringfencing. Defence and schools were previously given special protected status.  It is not clear if this interview changes that (see update above).

Mr Osborne also asserted that the Budget will be a pivotal political moment:

“Wednesday is going to be a day of reckoning because then you will see
the depths of the recession, the terrible state of the public finances
[and] figures which will show, I expect, a terrible rise in

However, as far as the next election is concerned, he suggests that the Conservatives still have work to do in order to persuade people positively to switch their support.

“The challenge now is that people want a change of government, people
are turning their backs on Labour, but they need to be persuaded that
we offer a real change.”

Jonathan Isaby

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