Spending cuts will be tough but fair, Chancellor insists

Mr Osborne will tomorrow unveil what is expected to be the harshest set of economic measures seen in decades in a bid to tackle the UK's record deficit.

Labour said the Government's determination to go further and faster with austerity measures was "profoundly misguided" and would crush the fragile recovery.

But Mr Osborne insisted it was unavoidable given the state of the nation's finances – promising measures would be "tough...but fair".

He said the package, which has been signed off by senior Government figures from both coalition parties, would set the framework for the next five years.

He urged voters to judge it not on the immediate pain it would cause to everyone but on the long-term benefits.

"As a new Government we have inherited a truly awful financial situation. No incoming chancellor has ever faced a set of public finances like this," he told BBC1's Andrew Marr Show.

"And unless we take the determined and concerted action to deal with that then I am afraid we will find our country on the road to ruin.

"We will find higher interest rates, businesses going bust, unemployment rising and our living standards declining. I am not prepared to put up with that."

Asked just how bad the Budget measures would be, he said: "I do not see it as badness – I see it as decisive action to deal with Britain's record budget deficit.

"We sit here as the country in Europe with the largest budget deficit of any major economy at a time when markets and investors and businesses look around the world at countries that can't control their debts.

"We have got to deal with that. In that sense it is an unavoidable Budget. But what I am determined to do is make sure the measures are tough but they are also fair and that we are all in this together."

"People should judge this Budget not just on the day after it's delivered...but also in the years to come and whether it laid the foundations for prosperity, for a country that can live within its means, for a more balance and equitable economy."

Shadow Education Secretary Ed Balls said it was a "profound mistake" to prioritise cutting the deficit faster this year and warned it would put the recovery at risk.

"The priority has got to be growth and jobs," he told the Andrew Marr Show.

"And I fear that what's happening is we are making the mistake of the 1930s – the mistake of thinking cutting the deficit, even if that means putting growth and jobs at risk, is a priority.

"It's not just the callousness, the unfairness of a rise in VAT, it's the fact that it would undermine recovery and jobs."