British PM seeks to calm public fears over Budget cuts

British Prime Minister David Cameron yesterday defended Budget cuts as necessary to prevent a Greek-style meltdown as his Conservative Party kicked off its annual conference.

Two weeks before Mr Cameron’s government unveils a spending review likely to force many departments to slash spending by 25 per cent, the premier also tried to reassure Britons over their impact, while acknowledging hard times ahead.

The conference in Birmingham, central England, is the centre-right Conservatives’ first since they took power in a coalition government with the centrist Liberal Democrats in May after 13 years in opposition.

Their biggest challenge is to tackle Britain’s record deficit of $154.7 billion (€188 billion) bequeathed by the previous Labour government.

In a round of pre-conference interviews, Mr Cameron said the coalition had inherited a “complete mess” from his predecessor Gordon Brown but that its emergency Budget in June had taken Britain “out of the danger zone”.

“We were linked with Portugal, Greece and Spain, those countries that were at risk of a credit downgrade with interest rates going up,” Mr Cameron told the BBC.

“We’ve taken Britain out of that danger zone and our interest rates have gone down.”

In an interview with the News of the World, he suggested that the cuts may not be as painful as some fear.

“Let’s put these cuts into perspective,” Mr Cameron said. “Many businesses have had to make far greater reductions than us in one year.”

He also indicated that agreement had been reached in government on controversial measures to reform the welfare system, which accounts for a large chunk of annual state expenditure.

This will happen through the introduction of a “universal credit” in a bid to get people off benefits and working instead.

Mr Cameron also promised he “will not take any risks” with Britain’s military amid tensions with his Defence Secretary Liam Fox over plans to cut the defence budget.

Elsewhere, he acknowledged that there were “challenges ahead” – and that some Tories were disappointed the party was forced to team up with former arch-rivals the Lib Dems to form a government and the resulting “compromises”.

Finance minister George Os­borne will reveal full details of the spending cuts in a comprehensive spending review on October 20. He is to address the conference today.

In a sign of likely resistance ahead, several thousand trade unionists and students took to the streets of Birmingham to demonstrate noisily against the cuts, burning red flares and chanting “Tory scum” amid a heavy police presence.

The march drew people from around Britain and passed directly outside the conference venue hosting the Conservative conference.

Last month, unions voted in favour of possible coordinated strike action against the cuts and a national campaign against the scale of the planned reductions.

As Mr Cameron sought to offer reassurance over the cuts, though, former finance minister Kenneth Clarke, Mr Cameron’s justice secretary, warned that Britain still risked falling back into “double dip” recession.

“I’m at the more pessimistic end. I’m not sunnily optimistic about where the Western economy is going,” he told The Observer newspaper.

But Mr Cameron dismissed talk of a new recession and said that the coalition government would press on with its reforms despite opposition criticisms that the cuts would hinder growth.

The Conservative conference comes after main opposition Labour last month elected former climate change secretary Ed Miliband as their new leader to replace Mr Brown.

A BPIX poll in The Mail on Sunday newspaper put the Conservatives on 41 per cent support, Labour on 37 per cent and the Lib Dems on 13 per cent. The survey of 2,061 people was conducted on Thursday and Friday.