Brown attacks Tory NI plans

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Indy Politics

Gordon Brown today launched a fierce attack on Conservative plans for National Insurance, as David Cameron claimed the Prime Minister was "rattled" over the issue which has dominated the opening days of the General Election campaign.

The Prime Minister denounced Tory claims they could scrap the bulk of next year's planned NI rise for employers and workers, saying they were based on flimsy, "back-of-envelope" calculations which could not be delivered.

But Mr Cameron responded by unveiling a new list of 13 business leaders who have endorsed his plans - including the bosses of Logica, Virgin Active and Dairy Crest - bringing the total to 81.

And Marks & Spencer boss Sir Stuart Rose accused the PM of insulting the intelligence of the business community with his charge that they had been "deceived" by the Tories.

Meanwhile, Liberal Democrat leader Nick Clegg joined the attack, claiming the Tory plans would require an increase in VAT to 20.5% at a cost of £389 a year to the average household.

The row came as Labour's National Executive Committee, union bosses and party officials met to approve the party's election manifesto, understood to include a headline promise to hold the basic rate of income tax at 20p during the next Parliament.

And Mr Cameron launched his proposals for a voluntary National Citizens' Service to provide an opportunity for 16-year-olds to take part in "team-building" outdoor activities and social action projects.

Appearing alongside Oscar-winning actor Sir Michael Caine - who confirmed he would be voting Conservative and expected Mr Cameron to be a "great" Prime Minister - the Tory leader said the two-month NCS courses would give youngsters a sense of responsibility and act as a "rite of passage" into adulthood.

Conservatives say they will fund the reversal of the bulk of the rise in NI contributions by cutting £6 billion from public spending in "efficiency savings" over the coming year.

A further £6 billion saved from waste would be recycled to frontline healthcare and other priorities.

But Chancellor Alistair Darling said the Tories' projected £12 billion savings were "fantasy" and would come on top of £15 billion in efficiency savings already being implemented by the Government this year.

And the Prime Minister warned: "You cannot effectively get £27 billion in one year - which is equivalent to half of the education budget - without laying thousands of people off and without losses of businesses and loss of jobs.

"What the people of this country need to ask themselves is this: do the British people really want to gamble your economic future on the basis of a back-of-envelope set of calculations like this?"

At Labour's first press conference of the election campaign in London, Mr Darling accused the Conservatives of double-counting savings that had already been "banked" by the Government.

"The way they are going, no one will be surprised if in the coming days these fantasy savings will be used again and again to bail out further Tory tax and spending promises," he said.

He pointed to comments by Standard Life chairman Gerry Grimstone - also an adviser to the Treasury on efficiency - who said that the Tory calculations were "just not credible".

Mr Brown insisted he had "no quarrel with business", but suggested that business leaders who had come out in support of the Tory plans did not understand the scale of cuts being proposed.

But Mr Cameron said the Government were "looking very rattled and very worried that they are losing the argument with business".

He warned that if the NI increase did go ahead next April it would hit hopes of economic recovery.

"We are coming out of recession, the economy is starting to grow, the very craziest thing to do right now would be to put an extra tax on every job in the country," he said.

"What Gordon Brown has said is that he has identified £11 billion of waste, but he doesn't want to do anything about it until next year. We think that is mad. Why not cut the waste this year to stop the taxes?"

Sir Stuart became the latest business leader to voice his irritation over the claim by Mr Brown and Lord Mandelson that they had been "deceived".

"It's unfortunate that we have been dismissed," he told BBC Radio 4's Today programme.

"This is an important argument and to insult the collective intelligence of 60-plus chief executives is unhelpful."

Launching the Liberal Democrats' Scottish campaign in Glasgow, Mr Clegg unveiled a poster which borrowed a famous Conservative slogan of the 1992 campaign to warn of a "Tory VAT bombshell".

"The only way that they are going to deliver their tax promises is by dropping a tax bombshell, a VAT bombshell of £389 a year on every household in this country," Mr Clegg said.

There was another boost for the Tories later when entrepreneur and star of the BBC's Dragons' Den programme James Caan came out in favour of their economic approach.

The millionaire - who has advised Business Secretary Lord Mandelson on how to encourage entrepreneurs from ethnic minorities - said the Government's NI rises would cost "thousands of jobs".

"Labour and the Conservatives seem to be offering alternative policy focuses for economic recovery, and their plans for deficit reduction depend upon the successful impact of their respective policies," he said in a statement.

"I believe that the recovery needs to be business-led, with particular support for Small and Medium Enterprises (SMEs), and the Conservatives are most convincing on this aspect at the moment."

Mr Caan said Labour's recent Budget had been based on "exaggerated" growth figures, and public borrowing levels were "imprudent".

"Their plans to raise National Insurance contributions will also cost of thousands of jobs," he added.

"The Tories place a different and greater emphasis on making it easier for SMEs to operate, and are willing to actually cut taxes here.

"Their plan to keep NI at its current level will protect jobs in the private sector, and it will act as an incentive for business."