Tories unveil benchmarks to judge economic success

Shadow chancellor George Osborne today set out eight benchmarks against which voters would be able to judge a Tory government's success on the economy.

As he sought to shift the focus from spending cuts to the need to promote economic growth, he promised to get the country "back on its feet" with a "new economic model".

A Conservative administration would usher in an economy based on long-term saving and investment, and support a private sector recovery driven by exports and enterprise, Mr Osborne said.

He announced a new Green Investment Bank to help create jobs in the low carbon industry at the same time as reducing harmful emissions.

The public would be able to hold him and Tory leader David Cameron to account against eight "clear and transparent" benchmarks, he said.

The first addressed the need to reduce Britain's record £178 billion budget deficit in order to safeguard the UK's credit rating.

But - following Labour accusations that the Tories have softened their stance in recent days - it contained little detail about early action on spending cuts.

"We will set out a plan in our first budget to eliminate a large part of the structural deficit in the first parliament," he said in a speech.

"We will make a start in 2010. The pace of fiscal consolidation will be coordinated with monetary policy."

The eight benchmarks on economic growth were to:

* Safeguard the UK's international credit rating;

* Target 2% inflation and preserve financial stability;

* Create the conditions for higher exports, business investment and saving as a share of GDP;

* Reduce youth unemployment and reduce the number of children in workless households;

* Improve Britain's international rankings for tax competitiveness and business regulation;

* Raise the private sector's share of the economy;

* Raise productivity growth in the public sector;

* Reform banking regulation to ensure lower levels of leverage, less dependence on unstable wholesale funding and greater availability of credit for small and medium sized businesses;

* Reduce greenhouse gas emissions and increase the UK's share in the global markets for low carbon technology.

Mr Osborne said: "These are the benchmarks for Britain. Benchmarks that will guide the next Conservative government as we build a new, more stable, more balanced economy.

"They mean more jobs, more savings, more enterprise.

"Borrowing from China so that we can buy the goods they make for us may be Gordon Brown's idea of the future, but it is not ours. We want Britain to be selling to China and the world.

"Judge us by these benchmarks - hold us to account. We will be accountable.

"The whole country will see as we Conservatives rebuild our economic house on more solid foundations.

"Now this cannot be achieved by government alone. We need a whole national effort that brings together government, business and individuals.

"Over the next few months we will be seeking support for our plans from British businesses."

Mr Osborne said the country needed "new sources of growth".

"As the last major economy out of recession, and with the weakest recovery in the G20, we need change to get our country back on its feet again," he said.

"We cannot go on with the old economic model of the last decade.

"A model that depended on a public spending boom we couldn't afford, an overblown banking sector and unsustainable consumer borrowing off the back of a housing bubble.

"These were the shaky foundations of the age of irresponsibility that left Britain so badly exposed to this economic crisis.

"They cannot be the sources of sustainable growth for the future."

He added: "Our new economic model will be built on long-term saving and investment.

"We want to see a private sector recovery driven by exports and enterprise."

The Tories' deficit reduction plans have been under intense scrutiny in recent days since it emerged last week that the economic recovery had been much weaker than expected.

Labour figures have accused the Conservatives of shifting their rhetoric.

Mr Cameron said early last week there was a need to "tear up" 2010/11 spending plans. But at the weekend, he said cuts did not need to be "extensive" or "swingeing" in the first year.

The shadow chancellor said today that his "overall plan" was to remove a "large part" of the structural deficit across the next parliament.

Labour has promised to halve the deficit within four years.

Answering reporters' questions after the speech, Mr Osborne said: "The pace of doing that had to be done in conjunction with the Bank of England."

"We will make a start in 2010. We think that's important to establish credibility, the credibility of the plan.

"We have very explicitly now said we are aiming to protect Britain's credit rating, this is one of the benchmarks we want to be judged by.

"This is going to come very early on... we are saying very explicitly today judge us on, potentially in the first few months of a Conservative government, on whether we are able to protect our credit rating.

"And you've got to remember there is an international bond investor out there saying it is 80% likely to be downgraded, so that is a very tough test that we are setting ourselves."

Mr Osborne said the threat of a credit downgrade represented an "emergency" that would have to be tackled by a special budget to be held soon after a Conservative election victory.

"There is not at the moment a credible government plan to deal with the deficit and the task in that first budget, that emergency budget, is to make sure that we spell out a credible plan that commands the confidence of the international investing community and British businesses.

"Since we do face the threat of a downgrade, that is an emergency, we need to get on and deal with it. The significance of what we are saying today is here is something that you will be able to judge us by, by the summer."

Mr Osborne was challenged about the suggestion that the Tories had only identified £1.5 billion of savings that could be made in their first year.

He said the figure, mentioned yesterday by shadow chief secretary to the Treasury Philip Hammond, represented the value of some measures that "you could undertake".

But he stressed: "Fiscal policy and monetary policy work hand in hand and therefore it is sensible to do these things in co-ordination with the Monetary Policy Committee who have responsibility, in part, for stimulating growth in the economy."