Less spending needed - Mandelson

Lord Mandelson said "spending choices" had to be made

Britain is facing a decade of public spending "constraints" in order to "rebalance" the country's finances, the business secretary has said.

Lord Mandelson said there would be "less spending in some programmes", but "sustained investment" in areas like healthcare and defence would continue.

He also said the recession was "coming to an end," but the effects of its "severity" were "not yet behind us".

The Tories say ministers are hiding the true scale of cuts that are needed.

David Cameron has accused the government of refusing to commit to a spending review before the next general election "because they do not want to own up to the cuts they are planning".

But Gordon Brown says improvements in public services can still be maintained despite the tougher economic climate.

'Greater efficiency'

Speaking to reporters at Westminster on Tuesday, Lord Mandelson said: "I think that the fall in the economy is coming to an end, but the severity is not yet behind us."

He said the government's priority was still to achieve economic growth, but "spending choices" would have to be made.

Of course, we will be operating under greater public spending constraints in the coming decade

Lord Mandelson, Business Secretary

"Of course we will rebalance public finances in the medium term," he said.

"There will be spending choices and a growing need for greater efficiency across the board, and less spending in some programmes."

He refused to say where cuts would be made, but said there would continue to be "sustained investment in schools, police, hospitals, international aid and frontline services including our country's defences".

'Thoroughly tested'

"Our approach will be characterised by a mixture of fairness and responsibility, and that's what you have seen from the Government to date.

"Of course, we will be operating under greater public spending constraints in the coming decade than we have in the last 10 years and that's why we we need to respond to it in the way I have described, rather than the way in which the Conservatives have suggested they will set about it.

"That's going to be the basis of the choice in priorities that the public will make at the next election."

The Conservatives have demanded more honesty from the government, but have also made it clear that they will only decide on future departmental spending plans once they are power.

However, Lord Mandelson said it was far from certain that a change in government would happen.

"Labour is without doubt being thoroughly tested by events and our own polling in our party reflects that," he said.

"[But] There's no deeply felt or settled embrace among the public of David Cameron or his party. That's why I believe the next election is open."