Page last updated at 23:04 GMT, Monday, 29 March 2010 00:04 UK

Darling in debate clash with rivals on tax and spending

Alistair Darling, George Osborne and Vince Cable
The three are seeking to reassure people about their economic plans

Chancellor Alistair Darling has clashed with his Conservative and Lib Dem counterparts over tax rises and spending cuts in a live TV debate.

Mr Darling said Tory plans to end part of his planned National Insurance rise were irresponsible and did not add up.

Shadow Chancellor George Osborne said the tax rise was the "wrong priority" and voters faced "five more years of waste, debt and taxes" under Labour.

Vince Cable said the Lib Dems were "different" from the other two parties.

The three men went head-to-head in a "chancellors debate", answering questions on their parties' central economic proposals ahead of the expected start of the election campaign next week.

The debate, on Channel 4, was a forerunner to the three prime ministerial debates - the first of their kind in UK election history.

BBC economics editor Stephanie Flanders
The men who would be Chancellor had a spirited debate this evening - with each playing to their strengths
Stephanie Flanders, BBC economics editor

The chancellor and his opposite numbers faced scrutiny over how they planned to reduce the UK's record budget deficit while also securing a sustained economic recovery after the recession.

Each party has accused the other of confusion over their tax plans and not being straight with the public about the scale of spending cuts that will be needed to rebalance the public finances.

During the hour-long debate, Mr Darling also appeared to rule out a compulsory levy on estates to pay for long-term social care for the elderly, which the Conservatives have criticised as a "death tax".

On the eve of the publication of the government's white paper on social care, Mr Osborne asked the chancellor whether a compulsory charge on people's estates at the time of their death to pay for care remained an "option", to which Mr Darling said: "No, it is not."

'Judgement calls'

The BBC's Nick Robinson said the debate had been largely restrained and polite.

All three men said there would be difficult choices over spending cuts after the election, with Mr Darling saying the next departmental spending review could be "the toughest in 20 years".

You are spending nearly £30bn over a Parliament and you can't identify the credible way with which you can pay for that
Alistair Darling

However, he said the government had made the "right calls" during the financial crisis and recession urged voters to back his "judgement" in handling future difficult decisions.

Mr Osborne came under pressure to justify his decision to reverse Labour's planned 1% increase in National Insurance contributions for those earning up to £45,400, a tax cut which the Tories said on Monday would save people £150 a year.

The Conservatives have said they would pay for this by finding £6bn in government savings.

"For the last year you have been saying that you needed to cut debt further and faster, and yet today, the first opportunity you had when you thought you had identified some savings, instead of cutting debt you have promised to change the National Insurance contributions," Mr Darling told him.

"You are spending nearly £30bn over a Parliament and you can't identify the credible way with which you can pay for that....That really is to take an irresponsible risk. It is poor, poor judgement."

But Mr Osborne said the tax increase would penalise hard-pressed families and businesses at a time when the economy was "not working" and the focus should be on boosting growth.

"Instead of tackling that waste now and stopping wasting people's money, you want to increase the taxes on pretty much every single person here in this room and people watching at home," he said.

"That is the wrong priority when this country needs to recover, when we need jobs, when people's incomes are being squeezed."

'Common sense'

It was "common sense" the next government "had to get out of the starting blocks" and deal with the deficit from day one, he said, claiming a Labour victory would result in "five more years of waste, taxes and debt".

Labour is committed to halving the deficit - expected to total £167bn this year - over the next four years but has put spending decisions on hold until later this year, saying premature cuts would endanger the recovery.

The Conservatives and the Lib Dems accuse Mr Darling of postponing hard decisions until after the election.

Unlike the other two parties - which have promised to ring fence priority areas from spending cuts - the Lib Dems have said all areas must be looked at and have proposed £15bn of cuts, including scrapping tax credits for better-off families and not renewing the Trident nuclear deterrent.

Mr Cable said Labour had done "real damage" to the economy but said that once in government the Conservatives would "get their noses in the trough and reward their rich backers".

"The Lib Dems are different," he added. "We got the crisis basically right and we are not beholden to the super-rich or militant unions."

He also called for a clampdown on tax evasion and speculation, referring to the trade union strikes in the 1980s, he lambasted what he described as "pinstripe Scargills" holding the country to ransom.

The SNP and Plaid Cymru both criticised the performance of the three men, saying there was "little difference" between them on the issue of spending cuts.

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