Labour comes out fighting in NI row

By Ian Dunt and Alex Stevenson

Labour is finally hitting back at the Tory attack on the government’s tax plans, after being forced onto the back foot throughout yesterday.

David Cameron used national insurance issue (NI) as the centrepiece of his attack on the prime minister during PMQs yesterday, after a further 30 business leaders backed his tax plans over Labour’s. He said today that the debate had made Labour look “rattled”.

Today the Tories unveiled another 13 business leaders condemning the government’s policies. Gordon Brown, appearing with chancellor Alistair Darling and business secretary Peter Mandelson, defended the rise in NI head on – and criticised Tory plans to make an extra £12 billion in efficiency savings in 2010/11.

Labour figures suggest the Tory plans would remove £6 billion from the economy in this year alone. The Conservatives say the policy can be paid for with efficiency savings.

But in today’s press conference Labour chiefs said the Conservatives’ “flimsy four-page press release” explaining their cuts was only as strong as a “house of cards”.

“Do the British people really want to gamble their future on figures based on the back of an envelope?” Mr Brown asked.

Mr Darling said the government was already delivering £15 billion of extra efficiency savings in 2010/11, insisting “it is not the case that nothing is happening this year”.

Adding another £12 billion of cuts in just nine months, as the Conservatives propose, “simply beggars belief”, he argued.

Lord Mandelson went further, saying the Tories had “zigzagged again”.

“Their entire economic strategy depends on the claim that they can find an extra £12 billion in efficiency savings – this year, just like that – on top of what the government is already doing. It is a plan with the strength of a house of cards.”

Mr Cameron responded in the Conservatives’ morning press conference that the government’s commitment to “doing absolutely nothing” would not be accepted by small businesses and households who have had to make cuts.

“We’re saying in that first year government needs to save £1 out of every £100 it spends,” he said, adding: “We have common sense and logic on our side.”

The one per cent rise in NI from April 2011 will apply to those being paid over £20,000.

“We are saying you can find some savings by cutting out waste,” Mr Cameron told GMTV.

“What Gordon Brown has also said is he has identified £11bn of waste, he’s found it but doesn’t want to do anything about it until next year. We think that’s mad.”

Mr Brown confirmed to Channel 4 News last night that the basic 20p rate of income tax would be kept.

The Labour manifesto is set to be published next week.