Labour hopefuls 'in denial' on economy, say ministers

Image caption, Baroness Warsi said ex-cabinet ministers should not accept severance payoffs

Ministers have accused Gordon Brown of going on a spending "bender" and Labour's leadership hopefuls of being "in denial" about the economy.

Conservative Baroness Warsi and Lib Dem Chris Huhne said their joint press conference was "just the start of a summer of scrutiny" of Labour's record.

They also called on the Labour leadership hopefuls to forfeit their ministerial severance pay.

But Labour said the jobless fall to June showed its policy had been right.

'Must take responsibility'

The two coalition ministers launched their attack on Labour's record as details continue to emerge of the sorts of cuts likely to be seen in October's spending review, in which most departments' budgets will fall by between 25% and 40%.

Following Tuesday's leaked letter about Ministry of Justice cuts - which unions say shows 15,000 jobs there at risk - it emerged on Wednesday that thousands of planned playground upgrades in England are also being halted.

"Labour's candidates can go on pretending that the budget deficit doesn't exist. It does and it's the single greatest challenge facing Britain," said Mr Huhne.

"It's too easy to stand on the sidelines and criticise, the Labour candidates owe it to themselves and to the country to offer constructive solutions."

He said the party "must take responsibility for the legacy they have left and the damage it has inflicted on so many".

He blamed a "decade of spend, spend, spend" adding: "The truth is that Gordon Brown tried to buy the election. Labour's big spender went on a hell of a bender."

Baroness Warsi said a "lot of public money" had been wasted and suggested Labour "didn't give a damn".

"Labour went on a spending spree with no thought for the cost, no thought for the consequences, no thought for the future generations who would have to pick up the bill."

She accused the party's leadership contenders of "blaming everyone and anyone except themselves" and said they were in "complete denial about their legacy".

Severance pay

She said she had written to the four contenders who had been ministers in the last government - to ask if they had taken their ministerial severance package - worth £19,938 to former cabinet ministers.

If so, she suggested they should give it up to show "they had come to terms with the mistakes of the past".

Former ministers are entitled to a one-off, tax-free payment of a quarter of their annual ministerial salary on losing office.

"At a time when people across the country are being asked to tighten their belts to deal with Labour's economic mess, it is unacceptable that the very people responsible for the mess are eligible to walk away with up to £20,000 each," she said."

But questioned about a comment in which she said what Labour had done to the British people was "frankly, criminal" she added that she meant the party's conduct had been "pretty appalling" but was "not criminal".

Labour said her call for the leadership contenders to give up their severance payments was "a pathetic attempt by the coalition to create a smokescreen around today's serious economic issues".

And, responding to new figures showing that unemployment fell by 49,000 to 2.46m in the three months to June, shadow chancellor Alistair Darling said it made the case "for the sensible, balanced approach to economic policy I have always argued for".

He added: "The coalition's decision to abandon that approach in favour of gambling on the economics of austerity is a risk they simply shouldn't be taking."

He has previously accused the coalition government of "playing the oldest trick on the book" by blaming its predecessor for the state of the economy and said big cuts too soon risk tipping the economy back into recession.

Labour's plan had been to halve the UK deficit over four years, whereas the coalition plan is to eradicate the deficit completely over the same period.