'We will not abandon austerity'

CHIEF Secretary to the Treasury Danny Alexander was today to issue a robust defence of the Government's cost-cutting efforts aimed at balancing the nation's books.

In the face of mounting calls for Chancellor George Osborne to adopt a 'Plan B' after the economy fell back into recession, his Liberal Democrat deputy argued there "could not be a worse time" for the Government to abandon its drive to tackle the deficit.

In his keynote speech to the Lib Dem autumn conference in Brighton, Mr Alexander was to insist the coalition's austerity programme – which Labour blames for the UK's continued lack of growth – is "the foundation" for future prosperity.

"We have rebuilt the confidence in this nation's ability to pay its way in the world, we can now put that credibility to work for the British people," he was due to say.

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"There could not be a worse time to argue that we should abandon our plan. We won't do it. It is the foundation for everything else. It is the foundation for jobs and prosperity in the future."

Mr Alexander will today say it was the "right, pragmatic" response to worsening growth forecasts for the Government to push some spending cuts into the next parliament.

Lib Dem Business Secretary Vince Cable said he felt the Government had "struck the right balance" with its fiscal discipline.

But he stressed that the economy must not "get stuck on a downward escalator where slow or no growth means bigger deficits leading to more cuts and even slower growth".

Mr Alexander will use his speech to reaffirm his commitment to tackling tax avoidance and evasion, saying the Government is on track to raise £4billion this year from a £900million investment announced two years ago.

"Fair taxes in tough times means everyone playing by the same rule book, and everyone paying their fair share," he will say.

Elsewhere at the party conference, activists were due to reject proposed local pay deals for state-funded workers, which critics fear would hit wages in Plymouth.

Delegates are set to call for the controversial move being considered by the Coalition Government to be ditched.

A motion to be debated by activists highlights concerns that regional pay could "adversely affect" many areas, taking money out of the local economy and hitting businesses. While unlikely to directly impact on the row currently raging over separate proposals by 20 health trusts across the South West to introduce regional pay for NHS workers, it could serve to rally opposition further.

Meanwhile, Lib Dem activists last night said speed limits on residential roads should be cut to 20mph.

Delegates putting forward a motion said lower limits would make the streets safer for pedestrians, cyclists and motorists. Whitehall should fund introducing the new 20mph zones, they said.