The shadow chancellor's claims that the Conservatives are a progressive force in politics are a "joke", Business Secretary Lord Mandelson has said.
Conservative claims that the party is a progressive force in politics are "rank hypocrisy", Business Secretary Lord Mandelson has said.
He also described George Osborne's plans to reform public services like schools as a "code for cuts".
He also said shadow chancellor George Osborne's plans to reform health and education would mean spending cuts.
Lord Mandelson told the Guardian voters would not be convinced by the Tories' "political cross-dressing".
This could result in no "safety net" for millions of people, he added.
The peer's attack came on his second day deputising for Prime Minister Gordon Brown while he is on holiday.
But Lord Mandelson told BBC Radio 4's Today programme that social mobility was "not getting better as quickly as we originally wanted to see".
The peer's attack came as he is deputising for Prime Minister Gordon Brown, who is on holiday.
'Crippling cost'
'Crippling cost'
He said: "The first lesson of political positioning is that you have to have credible ground to stand on. George obviously still has a bit to learn."
In a speech on Tuesday, Mr Osborne said Labour had "abandoned the field of progressive politics" to the Tories and predicted the party would be "condemned to irrelevancy for many years to come".
And he claimed the Conservatives' plans would have a "crippling cost in human potential and long-term growth".
He attacked the government for running up "huge national debts that future generations are left having to pay for".
In a speech, Mr Osborne said Labour had "abandoned the field of progressive politics" and predicted they would be "condemned to irrelevancy for many years to come".
Mr Osborne said the UK should be more like Sweden, where improvements had been made in education while balancing the books, by bringing more private providers into the state sector.
The party had led the way recently by holding an open primary to select the parliamentary candidate for Totnes, Devon, he added.
But Lord Mandelson, who has had several run-ins with Mr Osborne previously, told Today that the public sector savings "the Tories envisage will not produce a better service".
And attacking Labour's record, Mr Osborne said: "There is nothing progressive about out-of-control spending that the poorest end up having to pay for, and nothing fair about huge national debts that future generations are left having to pay for.
He added that cuts would "leave no safety net for those who cannot afford to go private".
"And it is that fiscal responsibility allied to a passionate belief in public service reform - particularly in education - which is the only progressive route out of this debt crisis."
Lord Mandelson also said: "This exposes the rank hypocrisy of George Osborne's claims to represent the party of progressives. I've never heard anything so laughable in my life."
Spending on health had to be accompanied by "productivity gains", while increasing pupil numbers meant education policy needed reform to ensure more money gets to the "frontline".
Mr Osborne said: "The torch of progressive politics has been passed to a new generation of politicians - and those politicians are Conservatives.
"By pursuing a course of illiberalism, centralisation, fiscal incontinence and opposition to meaningful public service reform, the current leadership of the Labour Party has abandoned the field of progressive politics."
