Speaking at the Conservative Party conference, George Osborne has set out what needs to be done to tackle this country's debt crisis. He highlighted the fact that this Government spends more money on servicing the debt than it does on educating our children or on policing our streets.
When we as members of the public are in debt, we don't keep on borrowing, and keep on spending: we rein in our spending, and start paying down the debt to reduce interest payments and get ourselves back on an even keel. Government should be no different.
Osborne set out significant steps to address the debt crisis in the short and long term, consistent with the values of the modern progressive Conservative Party - protecting the poorest and the low paid, being straight with people and recognising that we are all in this together.
Conservatives have been straight with the British people, and this includes:
· A bigger state pension each year for all, paid for by an increase in the pension age of one year;
· A one year public sector pay freeze, that does not apply to the lowest paid, in order to protect the jobs of 100,000 people working in frontline public services;
· Tackling Britain's debt crisis to stop higher interest rates and higher unemployment for all.
As George Osborne said: "these are the honest choices in the world in which we live. Anyone who tells you these choices can be avoided is not telling you the truth. We are all in this together."
Raising the retirement age to 66
To restore the link between the level of the state pension and earnings, the retirement age will have to rise. This is another of those trade-offs any honest government has to confront. All parties accept that to afford that, with an ageing population, the state pension age will have to rise. The women's pension age is already set to start rising next year to 65, and then in 2026 the pension age for men and women will go up to 66. No one who is a pensioner today, or approaching retirement soon, will be affected. But this is how we can afford increasing the basic state pension for all.
One year pay freeze in 2011
Whoever wins the next election is going to have to look at the cost of public sector pay, and to accept a one year pay freeze. The Conservatives made it clear that this shouldn't include public servants earning less than £18,000, because we don't believe in balancing the budget on the backs of the poorest. Nor would they include those risking their lives for this country in Afghanistan - we owe them so much more, so we should double their operational allowance.
A pay freeze of the scale we're talking about is the equivalent to saving 100,000 public sector jobs. We say to every public sector worker that this is the best way to try to protect your job during this difficult period. We are all in this together.
I was pleased with Osborne's speech: it is absolutely fundamental to look at the economic situation honestly, and to recognise that this is a time where tough choices are required. No doubt there will be the usual Labour rhetoric about Tory cuts, but as we know, they now accept the need to make them too. The Conservatives showed themselves to be the party of the many, not just of the few.
It seems to me that there is a real choice between Conservatives and Labour on the Economy ... Honesty and Truth on the Economy or more of Labour being Economic with the Truth!