* Government must find 16 bln pounds of cuts for 2015-16
* Cameron appeals to powerful anti-EU Conservatives
* Labour leads Cameron's party in polls
By Guy Faulconbridge and Matt Falloon
BIRMINGHAM, England, Oct 7 Britain must find
more spending cuts to reduce the budget deficit up to the next
election and beyond, Prime Minister David Cameron said on
Sunday, underlining the government's tough task of fixing the
economy and winning back waning public support.
Cameron also said he would use Britain's veto to scupper
European Union budget talks if necessary, appealing to the
powerful eurosceptic wing of his Conservatives, who are trailing
the opposition Labour Party in opinion polls.
Speaking before the Conservative Party conference, Cameron
said his government was determined to stick to its plan to erase
what was a record budget deficit when he came to power in 2010.
His coalition of Conservatives and Liberal Democrats has
presided over Britain's return to recession, raising speculation
that it may miss its own targets for cutting the deficit.
Cameron backed comments by Liberal Democrat Deputy Prime
Minister Nick Clegg that whoever won the next election in 2015
would have to impose another round of austerity because of the
size of the economic problem.
"Yes, he is right and actually it happens before that
because we have to find 16 billion pounds of spending reductions
for the year 2015-16. It starts before the general election and
we need to do that," Cameron told the BBC.
"I want us to be the party that absolutely levels with the
British public and talks very plainly and straightly about what
needs to be done, because the fact is we have to find those
Finance minister George Osborne will announce new economic
and borrowing forecasts on Dec. 5. The government says it must
keep its resolve to slash spending to safeguard Britain's low
Abandoning their austerity plan would also prove politically
disastrous for the Conservatives, who staked their 2010 election
pitch on it. But Labour has pulled ahead of Cameron's party due
to public unease with the austerity drive, while support has
dived for the Liberal Democrats.
When asked whether Britain would have to reduce welfare
spending, Cameron said: "We have to look at things like the
welfare budget... We have capped welfare but we need to go
Beyond the economy, Cameron also faces problems in his
centre-right party, with some arguing he has not taken a tough
enough line on Europe and a few calling for a new leader, such
as Boris Johnson, the popular Conservative London Mayor.
To pacify the anti-EU wing of his party, Cameron threatened
to use Britain's veto if the 27-nation bloc seeks to inflate its
He suggested the EU should at some point split its budget
into two - one for the euro zone and one for the countries
outside the common currency, including Britain.
Cameron, much to the delight of the anti-EU wing, used the
veto last year to keep Britain out of a European fiscal and
economic pact aimed at resolving the euro zone debt crisis.
"People in Europe know I mean what I say. I sat round that
table - 27 countries, 26 of them signing up to a treaty - and I
said this is not in Britain's interest. I don't care how much
pressure you put on, I'm not signing, we are not having it. They
know what I am capable of saying, no, and if I don't get a good
deal I'll say no again."
Cameron, who is due to speak to the conference on Wednesday,
offered 270 million pounds to local administrations to pay, in
2013/14, for a freezing of council tax - which funds
neighbourhood services such as refuse collection.
Rail fare increases will also be capped at retail price
inflation plus 1 percent in 2013 and 2014, paid for by savings
at the Transport Ministry.
Both measures are meant to ease pressure on households
during the recession, without softening fiscal policy.