Darling urges spending caution

21 April 2013 Last updated at 07:33 ET

Former Chancellor Alistair Darling has urged Labour to be cautious about committing itself to future spending plans right now amid a growing debate in the party over the issue.

Reports that Labour has decided to go into the next general election pledging to spend more than the government have been dismissed by senior figures.

Ministers say Labour is "turning left".

Given the uncertain economic picture, Labour should "concentrate its fire" on the coalition, Mr Darling said.

Prime Minister David Cameron has said Labour's plans would return the country "to the mess" it found itself in before the coalition took power while deputy prime minister Nick Clegg said Labour has "retreated into the comfort of opposition" and was promising more "reckless spending, borrowing and debt".

Despite Labour's lead in national opinion polls. there has been unease in certain sections of the party about the lack of detailed policies being put forward and calls for greater clarity about its spending plans should it return to government.

A pamphlet produced by the Fabian Society next week - said to have been discussed at senior levels of the party - will urge Labour to break with the coalition's plans and pledge to spend more in certain areas after 2015.

Shadow chancellor Ed Balls has insisted no decision has been taken on whether, if returned to power in 2015, Labour would stick with the coalition's spending plans - as Tony Blair did for two years after winning the 1997 election.

The Conservatives have said not to do so would be irresponsible and would set back efforts to cut the multi-billion pound deficit.

But Mr Darling - who was chancellor between 2007 and 2010 - said the government's own spending plans were unclear and Labour should not reveal its intentions until it hears what Chancellor George Osborne is proposing.

'Not working'

Mr Osborne will outline spending plans for 2015-6 - the first full year after the next election - in June, with further extensive cuts expected. The government is seeking to cut more than £80bn from public spending between 2010 and 2015 and has said austerity measures will continue to 2018.

"I don't think my Labour colleagues need to take a position (on spending) until we see what the present government is proposing," Mr Darling told Sky News, adding that the current environment was "very uncertain and unpredictable".

"We don't actually know what they are doing. It's very difficult to plan ahead in any sort of sensible way. I think what we are better doing at the moment is concentrating our fire on the government."

Figures to be published on Thursday will show whether the UK grew in the first quarter of this year, or has slipped back into recession, which would be the third downturn since 2008.

'Great triumph'

Mr Darling said Mr Osborne's credibility had been further weakened in recent days by another downgrade to the UK's credit rating, by the Fitch agency, and by a warning from the International Monetary Fund (IMF) that the UK may need to slow the pace of deficit reduction if growth did not pick up.

"How long does the present government simply lumber on and hope something will turn up?" he added.

"What you saw last week were more and more people saying (Mr Osborne's) policy isn't working. I've been saying that for the last three years, and it was pretty unfashionable to do so, but what you're now seeing are respected figures inside and outside the UK calling into question the strategy."

But Mark Field, Conservative MP for the City of London, told Sky's Murnaghan show that Mr Osborne was "getting caught in the crossfire" of a heated political battle about austerity measures in the United States.

"The big test isn't so much what the IMF say but what the markets say," he said.

"The one lesson is that we have kept our interest rates very low. The lesson from 1931 and from 1976 is once you lose market sentiment then really all is lost.

"It has been a great triumph from George Osborne and one he should be rightly proud of."