Cameron to set out economic 'alternative'

The Conservative Party conference gets under way today with David Cameron promising to set out an "alternative" to the Government's economic policy.

The Tory leader backed "short term" action to protect savers and empower the Bank of England to rescue failing institutions.

He also demanded long term steps to curb debt levels in the public and private sectors.

Amid continuing global financial turmoil, Mr Cameron insisted it would not be "right" to comment on speculation that Bradford and Bingley is about to be nationalised.

But he added: "In the short term we should legislate to show we are going to protect deposits and savings.

"We also need to give the Bank of England more powers to step in and save failing institutions."

Mr Cameron, speaking as he arrived in Birmingham yesterday, said the level of debt being carried by both the Government and the private sector would need to be addressed, and hit out at Labour for being too free and easy with public money.

"I do think that they have been very casual with taxpayers' money.

"We've seen an enormous explosion of debt."

He added: "At a time of economic difficulty it's particularly important that we are here setting out that there is an alternative."

The gathering in Birmingham comes amid signs that the Tory lead over Labour may be narrowing.

With the economy certain to take centre stage, Mr Cameron will seek to show he is not a "novice" - the charge levelled by Gordon Brown during his well-received conference speech last week.

But a poll suggested the claim may ring true among voters, with most saying they had more trust in Mr Brown and Chancellor Alistair Darling to steer UK plc through the current downturn.

The Conservatives will try to tackle this issue directly with a special session as their conference officially opens today, when shadow chancellor George Osborne and shadow foreign secretary William Hague will look at how the economic crisis is affecting homeowners, businesses and the cost of living.

On Friday shadow business secretary Alan Duncan accused the Government of pursuing "scorched earth tactics", building up public borrowing in order to scupper the chances of a future Tory administration.

In an interview with the News of the World, Mr Cameron pledged to create an independent regulator to monitor Government debt.

The Office of Budget Responsibility would be able to restrict the Treasury from borrowing billions in order to finance public services, and would also have responsibility for making sure banks had put aside enough reserve funds so they did not go bust.

Mr Cameron said: "Here we are after 14 years of economic growth with the largest budget deficit in the advanced industrialised world - and there is no-one to call time on debt levels in the economy.

"We are going to change this."

He added: "The message to the Ed Balls of this world is: Your approach has failed. The fiscal rules, whether you have bent them, broken them, translated them into great or what, they haven't worked.

"They need to be replaced. We need independent judgment. We need someone to call time on government debt and on debt in the economy."

Mr Cameron sought to reassure voters concerned about his economic credentials by insisting: "Your money is safe with us."

He also said previously-announced measures such as the "fair fuel stabiliser" - which reduces duty as oil prices go up - would help ease the pressure on hard working families.

However, he risked angering his party's right flank by again ruling out promises of tax cuts at the next general election.

However Treasury Chief Secretary Yvette Cooper warned that it would be "hugely damaging" to the economy for the Government not to borrow at the time of an international downturn.

"If George Osborne wants to cut borrowing at this time he needs to explain how he intends to do it, especially when he has already committed to over £10 billion worth of unfunded tax cuts," she said.

"It becomes clearer every day that economic stability in these uncertain times cannot be trusted to novices such as David Cameron and George Osborne."