Business secretary to speak on Labour plan to reduce debt without slashing core services

Labour will maintain public spending levels until the recession is past and then protect frontline services, business secretary Peter Mandelson is expected to say today.

In a speech designed to launch Labour's fightback against the Tories, the minister will set out the party's position on spending and cutting the country's mounting debt.

Speaking at the London School of Economics, Mandelson is expected to say that a future Labour government would be “wise spenders, not big spenders” and has a plan to reduce debt without damaging people's lives.

Peter Mandelson
Mandelson: to promise Labour will be “wise spenders, not big spenders”

He is also due to attack the Conservative party for its appetite for sweeping spending cuts.

The minister will say: “The Tories and their friends are yearning for people to think that because there is a need for public spending constraint in the future, we face an era of deep, savage, indiscriminate across-the-board spending cuts, whoever is in power.”

But Mandelson is also expected to say that the public purse will have to be managed in line with economic conditions.

He will say: “It would not be right to turn the remarkable and necessary period of catch-up in public service provision over which Labour has presided into some kind of eternal doctrine: that social democracy is about high growth in public spending for its own sake, against which everything else we do is secondary.

“We do not believe that we should try to solve problems simply by throwing money at them.”