I Can't Rule out Tax Rises Says Cameron; David Cameron during His Opening Conference Address

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Byline: Benedict Brogan

DAVID Cameron braced his party for tax increases to get Britain out of the economic mire yesterday as he told Gordon Brown: 'You have had your boom and your reputation is now bust.' He opened the Tory conference in Birmingham with a starkly downbeat assessment of the tough choices he will face on tax and spending if the Tories win power.

And asked on the Andrew Marr Show if he accepted that taxes might have to rise, he said: 'If we win the election, we are clearly going to face an extremely tough time. No responsible opposition can ever rule things out. Of course I can't rule that out.'

Mr Cameron's sombre message will be reinforced today by George Osborne, who will warn that 'the grave problems our country faces' raise 'profound questions about our financial system'. The two men last night pub- lished a 'reconstruction plan' for the economy, designed to dispel claims that the Tories are struggling to respond to the financial turmoil sweeping Wall Street and the City.

At its heart is an ambitious plan to give the Bank of England the job of monitoring debt levels to rein in risky lending by financial institutions.

Mr Cameron, who will deliver his own keynote speech on Wednesday, also proposes to scrap Mr Brown's discredited fiscal rules and replace them with an independent Office of Budget Responsibility which would force ministers to balance the Government's books and reduce the national debt.

With Government borrowing likely to bust all Treasury forecasts and hit a record ?80billion this year - according to some forecasters - experts say spending cuts and tax increases will be necessary to balance the books. The Tories confirmed they would scrap the fiscal rules which have formed the cornerstone of Mr Brown's 11 years in charge of the public finances.

The rules require the Government to balance the books over the economic cycle and keep state borrowing below 40 per cent of national income.

Mr Cameron said they were now 'discredited' by the increasing levels of national debt and Governthe ment borrowing. In his keynote speech to conference today, Mr Osborne will warn City bankers that he is not 'going to excuse them of their responsibility, or allow them to think that things can carry on as before'. …