Review Of 'All' Government Spending

Labour will "fight back" against the recession, Lord Mandelson said today.

The Business Secretary said the government has the mindset of "insurgents" restless with the status quo, rather than purely "incumbents".

Lord Mandelson said his party is not "oblivious" to the current economic conditions, despite Tory accusations of "reckless" spending plans.

He conceded Labour was now the political "underdog".

Lord Mandelson's comments came the same day he pledged to review all government spending, as part of plans to halve its budget deficit with four years.

This figure will reportedly stand at £175bn by the end of 2009.

Public spending levels now look likely to dominate debates in the run-up to the next general election.

Conservatives have said they plan to cut spending, while Labour has claimed such dramatic action would damage front line services.

Lord Mandelson said the government should be "wise spenders, not big spenders".

"I simply don't accept, as the Tories and some of their friends in the media would have us believe, that the Labour approach to this boils down to the same thing. I believe there's a real choice," he told the BBC.

TUC members, who will hold their annual congress this week, have already warned of a "double-dip recession" and further unemployment.

However, Lord Mandelson has insisted the government's approach will not include "cuts", rather the switching of resource priorities.

"Everything is going to have to be examined," he said.


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