Osborne on voters' choice in 2015: Competence or chaos

A "price that works for our country". That's how George Osborne describes the deep spending cuts which he claims are needed to cut the deficit.

Speaking to me in Manchester, the Chancellor said that "the prize is economic stability, growth, jobs in the future, a brighter future".

The cuts the Tories are planning, if they are re-elected, have been described by their own Liberal Democrat coalition partners as "ideological… doctrinaire… harsh" and certain to "inflict unnecessary pain on the people of Britain".

To which, the Tories' new line of attack is to claim that voters face "a real choice" between them and all the others.

Labour, the Liberal Democrats and UKIP were, he told me, in "the same mix" and were offering "a chaotic alternative of higher taxes, higher borrowing and a return to economic chaos".

The chancellor claims he is being straight with voters over spending cuts but he is reluctant to spell out the consequences of returning to levels of spending as a share of national income not seen for 80 years.

I asked him about the scale of job losses - estimated by the Office for Budget Responsibility to be one million on top of the 500,000 already cut.

The number would depend, he told me, "on the decisions we are prepared to take on pay".

"If we go on taking what I think are realistic decisions on public sector pay then we can still afford to have people in sufficient numbers in the public sector to do the job we ask of them."

When I put it to him that being realistic meant real pay cuts for every public sector worker for at least another four years he replied that "this country has to live within its means".

Manchester City is not the only "Northern powerhouse" George Osborne has in mind

The pressure for him to say more will not go away.

His pitch today was that painful cuts could release cash for investments in "our future". We were speaking in Manchester's Museum of Science and Industry - the place where six months ago he delivered a speech promising to create a "Northern Powerhouse".

He claims to have "delivered major new science investments in the last week into Manchester and Newcastle" to have "delivered improvements in transport links across the Pennines from Liverpool all the way to Hull" and a "historic deal in Greater Manchester, so that Manchester has a powerful voice as an elected mayor".

Gathered to hear him were many who've come to believe that his commitment went beyond delivering a pre-election soundbite. Amongst them were the City Council's Labour leader Sir Richard Leese and Professor Brian Cox who told me that he wasn't political but did think Mr Osborne had put his money where his mouth was by investing in science in the City.

At the same time, though, the councils in the Greater Manchester area have lost almost £200m from their budgets next year.

ROUGH TRANSCRIPT OF MY INTERVIEW

Q: "Chancellor, you're here in Manchester talking about creating a Northern Powerhouse, do you understand why there are some that will be cynical about a Tory politician from the south making that claim?"

A: "Well I think for too long the Conservative Party looked like it didn't have a plan for the north of England and of course that had an impact on the way Conservative politicians were seen here. I'm a politician that represents the north west of England in Parliament. I've been determined to change that perception. Six months ago I stood here and made a speech about how we could build a northern powerhouse and it was much more than just a speech because it's led in the last six months to real progress on transport links, new science in to cities like Manchester and Newcastle and of course a new elected mayor for Greater Manchester, proving that you can make improvements so that living standards in the north rise and we have more strings to our bow in this country than simply our big global capital city."

Q: "Some in the north will see a Tory politician claiming to help the north and think, you must be kidding?"

A: "I'd say judge me by my actions, I've worked across party lines, with the Labour leaders here in Manchester and we've delivered major new science investments in the last week into Manchester and Newcastle, we've delivered improvements in transport links across the Pennines from Liverpool all the way to Hull, and we've got this historic deal in Greater Manchester, so that Manchester has a powerful voice as an elected mayor and i want to make sure my door is open to other northern cities that want to follow Manchester's lead."

Q: "You were at school at the time, but you accept people here will remember the Thatcher period and believe in their hearts that the Tories hate the north and don't do what's right for them."

A: "Industrial transformation of Britain in the 1980s had huge impact on our country, created a lot of future prosperity, but had impact on communities including in the north. Conservatives looked like they didn't have a plan in the north of England, I've been determined to change that. Northern powerhouse is a plan for that. Seeing real improvements, the science institutes that are going up, roads being built, the deal to have an elected mayor in Manchester. Northern powerhouse is becoming a reality but I am the first to say there's a lot more to do to rebalance our country and don't just rely on south."

Q: "Some say there is a big difference between inspiring dreams and the grim reality of councils around Manchester facing £200m of spending cuts this year and many cuts in future.

A: "Because our country has to live within means, can make big investments. Work being done on ageing in Newcastle…"

Q: "But money here is money taken from a council down the road, is money taken from care for the elderly from the police and so on…"

A: "We can provide decent public services, better policing, better education with our day to day money, whilst making savings to invest in our future. Our challenge as a country is that we're not investing enough in our future. True across many western nations. Really thinking where are we going to earn our living in the future. Manchester needs to spend money day to day on schools, hospitals, but also needs to be building for the future. Look around us, the people of the past thought about Britain's future and Britain was great. We're thinking about it and Britain can be great."

Q: "Take Nick Clegg's advice and come clean about scale of the cuts?"

A: "There's now a real choice between competence and chaos. Have Conservatives in government offering a competence plan to deal with our debts by taking difficult decisions but by doing that delivering economic security.."

Q: "He says - this is the deputy prime minister - that you are not being clean about cuts."

A: "There is a choice between chaos and competence. We are offering a competent government with a clear plan. Decisions on spending and welfare and getting the rich to pay more through their tax avoidance schemes being closed down. The alternative is economic chaos and people are not being straight with the public about what their plan involves. Next week, setting out through Charter of Budget Responsibility to bind our country into the difficult decisions required to bring our debt down."

Q: "You say that people should be straight with the public - are you going to be straight? Let's test it? Do you agree with OBR that there could be 1 million jobs in public sector lost, or at least hundreds of thousands?

A: "Jobs have already had to go. Can reduce number needed to go if we take difficult decisions on public sector pay. Not always popular but have protected employment."

Q: "Half million gone already, right to say at least as many again will go?

A: "Depends on decision prepared to take on pay. If we go on taking realistic decisions on public sector pay, then can afford to have people in sufficient numbers in the public sector doing jobs we ask of them. And this is against backdrop of growing economy where hundreds of thousands of jobs created in the private sector and where up to a million more created."

Q: "You say be realistic - you're talking about real pay cuts for every public sector worker for at least another four years.

A: "This country has to live within its means. Have to have a government we can afford.."

Q: "I'm asking you to spell out what that means for ordinary people, it means real pay cuts for four years."

A: "It is real people those who pay taxes, who have just been through economic crisis, it's real people lost jobs and went on unemployment rolls when policy failed. Judge me by my record. What people can see is the fastest growing economy in the western world. Can see unemployment coming down, thousands of jobs being created every day this government is in office. Can see deficit down by a half, can see public services getting the resources they need to deliver brilliant health care, education, policing. I'm saying we're on the right track, don't turn back, let's keep on working through this plan that is working for Britain."

Q: "You say judge me on my record and promising the next parliament will be like this. Are people right to say George Osborne is being honest? Real pay cuts for year after year, massive job losses and cuts. That's what you're promising."

A: "I'm promising to take the difficult decisions on spending and welfare, required for Britain to live within its means and the decisions to shut down the tax schemes that were allowed to exist that stopped the rich people paying taxes. As a result delivered economic stability, more jobs, growth, and brighter future. What is the alternative being promised? The alternative is chaotic. Tax increases hit working families. More borrowing. Not a future I want for this country and I'm going to fight hard to avoid it."

Q: "Isn't it a waste of money, you and Lib Dems, hanging about waiting for an election?

A: "There's a perfectly legitimate difference between Conservatives who say sensible realistic and competent plan to reduce deficit and maintain economic stability, by.. or alternatives. Not just Lib Dems, it's Labour, UKIP, you can put them all into the same mix. What they are offering is a chaotic alternative of higher taxes, higher borrowing, Britain doesn't want to go back to square one."

Q: "Meantime tax payers, paying for you lot to sit around having a row about who would cause chaos and who would be competent. Annoying for a tax payer to watch you and your own deputy trading blows about who run economy properly?

A: "People know there is an election in a few months' time. Real choice for the country, that choice between competence and chaos and competence offered by Conservatives and the long term economic plan to deal with debts and grow our economy. And the chaos of all the alternatives, Lib Dems, Labour, UKIP, you name it. The lot of them are offering a return to economic crisis, high unemployment, higher debt, higher taxes. We don't want that."

Q: "On the deficit, you say you're being straight with people. Look down the camera now, tell them something they don't want to hear. Not it's going to be difficult, not there's a choice between chaos and competence. Job cuts, pay cuts, service cuts. Is that wrong? Is that hyperbole?"

A: "I am absolutely straight with people that we're going to have to make savings in government departments, so those departments are going to have to be smaller, that we're going to have to cut certain welfare bills like benefits that go to working-age people. But the prize is economic stability, growth, jobs in the future, a brighter future for Britain. I think that is a price that works for our country."

Q: "Now there's a new report out about food banks. The Archbishop of Canterbury says that hunger is stalking the country. Do you recognise that picture?"

A: "Well of course we shouldn't live in a country where anyone is hungry and we have support networks there in place to help people who don't have the food they need. And I think this report from the Archbishop and, politicians from all the different political parties I think, has pointed to a number of things we need to improve in the way we - for example - get surplus food moved around the country to those who need food, make sure our benefits system is working efficiently and effectively. It's a good report which we need to study closely and see what we can do to improve.

Q: "There will be some people who say those in government reading a report on food banks should be feeling a sense of shame. Are they wrong?"

A: "My obligation in this job is to do what I can to improve the life prospects of everyone in this country and offer a brighter future to everyone and their families and their children. I am working hard. We have turned round this country's prospects. When we came in to government four or five years ago our country was on its knees on the brink of crisis and there were many many millions of families worried about their future. Things are improving but there is still a long way to go. We know that, but we've got a plan that's working."