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Tory tax 'deception' row erupts Tory tax 'deception' row grows
(about 1 hour later)
The leaders of 23 major UK firms have been "deceived" by a Conservative pledge to axe some National Insurance rises, Lord Mandelson has claimed. A row over National Insurance rises has escalated after business leaders said claims they had been "deceived" into backing Tory plans were "patronising".
He said the Tories could not make their sums add up without increasing VAT. Chancellor Alistair Darling accused the Tories of "peddling a deception" after 23 top bosses backed proposals to curb National Insurance increases.
But Tory leader David Cameron said his comments were "patronising" and "wrong" and showed Labour was "in meltdown". Mr Darling said the bosses should take a "long hard look" at the Tory plans, rather than accepting "flimsy advice".
The 23 bosses, including Marks & Spencer's and Next's chiefs, said Labour's 1% NI increase was a "tax on jobs" and would "endanger" recovery. But two of them hit back instantly, accusing Labour of a "tax on jobs".
Lord Mandelson said Tory plans to axe part of the increase were a "cynical deception" that could not be achieved without increasing VAT, as he said the Conservatives had done after winning elections in 1979 and 1992. Next boss Simon Wolfson, a longstanding Conservative supporter, said in a statement: "Of course we have not been deceived.
"The principle is a very simple one. It is a question of, do we pay for government profligacy through increased taxes or do we urge them to save money in a way that businesses have?"
'Sweet shop'
Kingfisher chief executive Ian Cheshire said: "It's a little patronising to suggest that we've been deceived.
To say somehow Britain's business leaders have been deceived is patronising, wrong, will backfire, and shows that their plans are in meltdown David CameronConservative leader Company bosses back Tories
"This isn't a political point, it's a business issue - whichever way you look at it, it's a tax on jobs."
Business Secretary Lord Mandelson said the Conservative plans were a "cynical deception" that could not be achieved without increasing VAT, as he said the Conservatives had done after winning elections in 1979 and 1992.
He said shadow chancellor George Osborne was "like a kid in a sweet shop, who thinks he can just grab sweets from every jar without paying for them".He said shadow chancellor George Osborne was "like a kid in a sweet shop, who thinks he can just grab sweets from every jar without paying for them".
"Of course there are some in business who are going to support what appears to be a pain-free tax cut. I mean, who wouldn't, if offered that?," said Lord Mandelson."Of course there are some in business who are going to support what appears to be a pain-free tax cut. I mean, who wouldn't, if offered that?," said Lord Mandelson.
"But the point is, this is not pain-free and Mr Cameron and Mr Osborne are peddling a deception.""But the point is, this is not pain-free and Mr Cameron and Mr Osborne are peddling a deception."
It is a significant moment in the election campaign... the heads of these biggest companies, employing 500,000 people, have said, in terms, that cutting government waste won't endanger the recovery but putting up National Insurance will David CameronConservative leader class="" href="/2/hi/uk_news/politics/8598020.stm">Company bosses back Tories 'Panic'
Chancellor Alistair Darling, appearing alongside Lord Mandelson at an election campaign-style press conference, said company bosses supporting the Conservatives in a letter were backing pledges made on a "wing and a prayer". Alistair Darling, appearing alongside the business secretary at an election campaign-style press conference, said company bosses supporting the Conservatives in a letter were backing pledges made on a "wing and a prayer".
HAVE YOUR SAYA rise in employers' NI is a tax on jobsTio Terry Send us your comments
He accused Mr Osborne of "double counting" and claimed the Conservatives had a £22bn "credibility gap" in their economic plans - although he conceded this had gone down from the £34bn gap previously claimed by Labour.He accused Mr Osborne of "double counting" and claimed the Conservatives had a £22bn "credibility gap" in their economic plans - although he conceded this had gone down from the £34bn gap previously claimed by Labour.
He said the £6bn in efficiency savings the Conservatives planned to use to axe the National Insurance increase were "illusory, non-specific and unbankable".He said the £6bn in efficiency savings the Conservatives planned to use to axe the National Insurance increase were "illusory, non-specific and unbankable".
Mr Darling said Mr Osborne was producing "panic" plans based on "the next day's headlines".Mr Darling said Mr Osborne was producing "panic" plans based on "the next day's headlines".
And he urged the business leaders who signed the letter to "have a long look at what the Tories are up to and then they might just have some serious questions to ask".And he urged the business leaders who signed the letter to "have a long look at what the Tories are up to and then they might just have some serious questions to ask".
HAVE YOUR SAYA rise in employers' NI is a tax on jobsTio Terry Send us your comments
He said no chancellor could rule out future increases in VAT - but said he had ruled such a move out last year when he was planning how to cut the budget deficit.He said no chancellor could rule out future increases in VAT - but said he had ruled such a move out last year when he was planning how to cut the budget deficit.
'Significant moment''Significant moment'
If they win the election, the Conservatives plan to scrap the planned April 2011 National Insurance rise for anyone earning less than £45,400 a year, which they say would save people £150 a year on average and also reduce the tax burden on firms.If they win the election, the Conservatives plan to scrap the planned April 2011 National Insurance rise for anyone earning less than £45,400 a year, which they say would save people £150 a year on average and also reduce the tax burden on firms.
Mr Cameron said the plan would not hamper efforts to cut Britain's record budget deficit - or mean an rise in VAT. Mr Cameron said the plan would not hamper efforts to cut Britain's record budget deficit - or mean a rise in VAT.
Speaking on a campaign visit at a B&Q store, he said: "Our plans don't involve an increase in VAT.Speaking on a campaign visit at a B&Q store, he said: "Our plans don't involve an increase in VAT.
"We say it's wasteful spending that's cut, rather than putting up taxes, as the government suggest.""We say it's wasteful spending that's cut, rather than putting up taxes, as the government suggest."
He said the backing of 23 leading business people was a "very significant moment" in the election campaign that showed the Tories "have got it right and Labour have got it wrong". He said the backing of a "pretty incredible" list of business leaders was a "very significant moment" in the election campaign that showed the Tories "have got it right and Labour have got it wrong".
"Labour, today, to say somehow Britain's business leaders have been deceived is patronising, wrong, will backfire, and shows that their plans are in meltdown," he added "Labour, today, to say somehow Britain's business leaders have been deceived is patronising, wrong, will backfire, and shows that their plans are in meltdown," he added.
David Cameron: "There is a threat to the recovery from putting up National Insurance"David Cameron: "There is a threat to the recovery from putting up National Insurance"
Among the high-profile businessmen to back Mr Cameron are Marks & Spencer chief executive Sir Stuart Rose, Sainsbury's boss Justin King and Easygroup's Sir Stelios Haji-Ioannou.Among the high-profile businessmen to back Mr Cameron are Marks & Spencer chief executive Sir Stuart Rose, Sainsbury's boss Justin King and Easygroup's Sir Stelios Haji-Ioannou.
Writing to the Telegraph, the business leaders said the proposed NI increase was an "additional tax on jobs" and would come into effect "at exactly the wrong time in the economic cycle". Writing to the Telegraph, the business leaders said Labour's proposed 1% NI increase was an "additional tax on jobs" and would come into effect "at exactly the wrong time in the economic cycle" and would "engager" economic recovery.
They said Labour's 1% NI increase was a "tax on jobs" and would "endanger" recovery.
BBC political correspondent Ross Hawkins says the businessmen - which include some who are well known Tory supporters but also two who sit on the prime minister's business council - have an obvious incentive for opposing a tax rise that will cost their companies money.BBC political correspondent Ross Hawkins says the businessmen - which include some who are well known Tory supporters but also two who sit on the prime minister's business council - have an obvious incentive for opposing a tax rise that will cost their companies money.
However, he added that their endorsement would be a boost for the Tories and shadow chancellor George Osborne as they seek to demonstrate the credibility of the party's economic plans.However, he added that their endorsement would be a boost for the Tories and shadow chancellor George Osborne as they seek to demonstrate the credibility of the party's economic plans.
The full list of signatories of the letter: Sir Anthony Bamford (JCB); Bill Bolsover (Aggregates Industries); Dominic Burke (Jardine Lloyd Thompson); Ian Cheshire (Kingfisher); Neil Clifford (Kurt Geiger); Mick Davis (Xstrata); Aidan Harvey (Tullow Oil); Lord Harris (Carpetright); Justin King (Sainsbury's); Sir Chris Gent (GlaxoSmithKline); Ben Gordon (Mothercare); John Lovering (Mitchells and Butler); Graham Mackay (SAB Miller); Alistair McGeorge (Matalan); Nicolas Moreau (Axa UK); Stephen Murphy (Virgin Group); Alan Parker (Whitbread); Sir Stuart Rose (Marks and Spencer); Paul Walsh (Diageo); Joseph Wan (Harvey Nichols); Simon Wolfson (Next); Zameer Choudrey (Bestway Cash and Carry); Sir Stelios Haji-Ioannou (easyGroup)The full list of signatories of the letter: Sir Anthony Bamford (JCB); Bill Bolsover (Aggregates Industries); Dominic Burke (Jardine Lloyd Thompson); Ian Cheshire (Kingfisher); Neil Clifford (Kurt Geiger); Mick Davis (Xstrata); Aidan Harvey (Tullow Oil); Lord Harris (Carpetright); Justin King (Sainsbury's); Sir Chris Gent (GlaxoSmithKline); Ben Gordon (Mothercare); John Lovering (Mitchells and Butler); Graham Mackay (SAB Miller); Alistair McGeorge (Matalan); Nicolas Moreau (Axa UK); Stephen Murphy (Virgin Group); Alan Parker (Whitbread); Sir Stuart Rose (Marks and Spencer); Paul Walsh (Diageo); Joseph Wan (Harvey Nichols); Simon Wolfson (Next); Zameer Choudrey (Bestway Cash and Carry); Sir Stelios Haji-Ioannou (easyGroup)