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BROWN AND TUC CLASH ON CUTS

PRIME Minister Gordon Brown will tomorrow pave the way for a much tougher stance on public spending in a key speech to trade unionists. He will warn increasingly angry trade unionists to support him or face what he claims would be even tougher cuts from the Tories.<br /><br />The speech comes as tension between Labour and the unions mount over exactly where cuts should come from to reduce the UK&rsquo;s huge fiscal deficit. The unions &ndash; who provide 70 per cent of Labour funding &ndash; are warning of crippling strikes if spending is cut. <br /><br />Brendan Barber, leader of the Trade Union Congress (TUC) , said that cuts in public spending would cause a second wave of recession and the type of industrial action and riots last seen in the 1980s.<br /><br />&ldquo;Unemployment could exceed four million and it would take years before there was a return to anything like full employment,&rdquo; he said. &ldquo;That would scar for life a generation of young people.&rdquo;<br /><br />The prime minister&rsquo;s speech signals a change in Labour&rsquo;s pre-election stance on public spending, as Brown has until now been unwilling to admit Labour will need to make cuts.<br /><br />Business secretary Peter Mandelson is set to push the new party line even further in a speech today, saying Labour should not &ldquo;allow itself to be painted as the party oblivious to economic conditions&rdquo; and reminding the party it can not &ldquo;solve problems simply by throwing money at them&rdquo;.<br /><br />In his speech to the unions, Brown will say: &ldquo;Today we are on a road towards recovery &ndash; but things are still fragile not automatic and the recovery needs to be nurtured.<br /><br />&ldquo;People&rsquo;s livelihoods and homes and savings are still hanging in the balance, and so today I say to you: don&rsquo;t put the recovery at risk...<br /><br />&ldquo;We have to make tough choices in public spending and we will need the support of the labour movement in protecting the front line first.&rdquo;<br /><br />Labour has been forced to rethink its policy in the face of spiralling public spending and UK borrowing. The Treasury predicts borrowing will peak at &pound;175bn, or 12.4 per cent of GDP, in 2009-2010.<br /><br />In an apparent contradiction of the new mood, Treasury minister Paul Myners said yesterday public spending should not be stopped until the recovery was in place.<br /><br />He said bond markets would continue their support, provided public finances were returned to sustainability once recovery was established.<br /><br />He added that taxpayer money used to bail out banks would eventually return a profit. <br /><br />Meanwhile, Tory Treasury spokesman Philip Hammond said: &ldquo;Every programme, every project has to be looked at for value for money &ndash; can we afford it.&rdquo;