Clegg and Miliband share the gloom

21 June 2013 Last updated at 19:27 ET

The economy is going to make life very tough for whoever wins the next election, Ed Miliband and Nick Clegg are to warn their respective parties.

Mr Miliband will say Labour must face up to the "hard reality" that it will not be able to reverse spending cuts scheduled by the coalition for 2015-16.

Mr Clegg will warn Liberal Democrats against going into the next election with a "flight-of-fancy" manifesto.

The moves precede Chancellor George Osborne's spending review on Wednesday.

The review will set out the government's spending limits for 2015-16, but is likely to stake out the battleground for the next general election.

The majority of government departments are facing cuts of between 8% and 10% although the NHS, schools in England and international aid are protected, and the military equipment budget is set for a small increase.

The chancellor has reached a settlement with more than 10 departments but has yet to conclude negotiations with a handful of others, including the Ministry of Defence and Business, Innovation and Skills.

'Crystal-clear'

Mr Miliband will use a speech on Saturday to hammer home the tough economic inheritance that Labour will have should it regain power after the next election, scheduled for 2015.

The Labour leader will say his party will not be able to reverse any spending cuts announced by Mr Osborne unless equivalent cuts are made elsewhere or a similar amount of revenue is raised from other means.

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When George Osborne stands up next week and announces his cuts in day-to-day spending, we won't be able to promise now to reverse them"

End Quote Ed Miliband Labour leader

"If we win the election, we will come to power in tougher economic circumstances than we have seen in generations, and that will have to shape the way that we govern," he will tell the National Policy Forum.

"Our starting point for 2015-16 will be that we cannot reverse any cut in day-to-day, current spending unless it is fully funded from cuts elsewhere or extra revenue - not from more borrowing.

"So when George Osborne stands up next week and announces his cuts in day-to-day spending, we won't be able to promise now to reverse them because we can only do so when we can be absolutely crystal-clear about where the money is coming from...

"It's a hard reality. But I am clear about it, Ed Balls [the shadow chancellor] is clear about it, and everyone in the Labour Party should be clear about it too."

'To-do list'

Mr Miliband, who will also set out plans to penalise property developers who "sit on land" rather than building new homes, will say that the public "will only put their trust in us if we show we are credible.

"Only if we have the discipline to face the challenge of our times can we change the direction of our country," he will add.

Labour has already said it would withdraw the winter fuel allowance from the wealthiest pensioners, and coalition cuts to child benefit for households where one person earns more than £50,000 will not be reversed.

Mr Clegg will tell his party that the Lib Dems' next manifesto must be coherent and realistic.

"I want the manifesto to set out our ambitious vision for a liberal society but it must be a to-do list, not a flight of fancy," he will tell the party's local government conference in Manchester.

The Lib Dem leader will say his party must be prepared to make clear what policies it regarded as sacrosanct in negotiations with another party in the event of another hung Parliament.

"That doesn't mean 'pre-negotiating' our manifesto - producing a bland, generic set of plans we know either of the other parties could sign up to. Far from it.

"We can and must fight the next election on a platform of distinct, forward-looking, liberal policies...

"But, building on the approach we took in 2010, we will be even clearer with people about the commitments which are priorities, and the ambitions which we accept may be affected by resources and circumstances."

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