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| Version 4 | Version 5 |
|---|---|
| Economists warn on Tory cut plans | Economists warn on Tory cut plans |
| (about 5 hours later) | |
| More than 50 economists have reportedly warned that Tory plans for spending cuts risk job losses and tipping the economy back into recession. | More than 50 economists have reportedly warned that Tory plans for spending cuts risk job losses and tipping the economy back into recession. |
| The Daily Telegraph says the letter has been signed by Labour peer Lord Layard and Sir David Hendry among others. | The Daily Telegraph says the letter has been signed by Labour peer Lord Layard and Sir David Hendry among others. |
| Meanwhile the Tories say 415 small and medium firms back its plan to halt most of Labour's National Insurance rises. | Meanwhile the Tories say 415 small and medium firms back its plan to halt most of Labour's National Insurance rises. |
| The Lib Dems say only they offer a "fair" tax system and have spelled out "honest and detailed" savings plans. | The Lib Dems say only they offer a "fair" tax system and have spelled out "honest and detailed" savings plans. |
| The Telegraph reported that it had seen a leaked letter in which 58 economists, including Lord Layard, Lord Skidelsky, Lord Peston and Sir David Hendry, back Gordon Brown's plans for the recovery - which it said was organised by Labour peers. | The Telegraph reported that it had seen a leaked letter in which 58 economists, including Lord Layard, Lord Skidelsky, Lord Peston and Sir David Hendry, back Gordon Brown's plans for the recovery - which it said was organised by Labour peers. |
| 'Still fragile' | 'Still fragile' |
| They said the Tories' proposed £6bn efficiency savings this year are "just a cut by another name". | They said the Tories' proposed £6bn efficiency savings this year are "just a cut by another name". |
| "This is not the time for such a destabilising action," they add. | "This is not the time for such a destabilising action," they add. |
| "The recovery is still fragile. Only when the recovery is well under way, will it be safe to have extra cuts in government expenditure." | "The recovery is still fragile. Only when the recovery is well under way, will it be safe to have extra cuts in government expenditure." |
| Cutting government waste won't endanger the recovery - but putting up National Insurance will Signatories to letter backing the Tories | Cutting government waste won't endanger the recovery - but putting up National Insurance will Signatories to letter backing the Tories |
| Some of the signatories also signed a letter to the Financial Times in February warning against a rapid reduction in Britain's deficit. | Some of the signatories also signed a letter to the Financial Times in February warning against a rapid reduction in Britain's deficit. |
| Labour said it showed the Conservatives were looking "increasingly isolated every time they call for immediately cutting support to the economy and putting the recovery at risk". | Labour said it showed the Conservatives were looking "increasingly isolated every time they call for immediately cutting support to the economy and putting the recovery at risk". |
| But the Tories said the leaders of 415 small and medium businesses, from flower shops to small manufacturers, had signed a letter backing their plans to block the bulk of Labour's planned rise in National Insurance. | But the Tories said the leaders of 415 small and medium businesses, from flower shops to small manufacturers, had signed a letter backing their plans to block the bulk of Labour's planned rise in National Insurance. |
| "We believe that the government's proposal to increase National Insurance, placing an additional tax on jobs, comes at exactly the wrong time in the economic cycle," the letter said. | "We believe that the government's proposal to increase National Insurance, placing an additional tax on jobs, comes at exactly the wrong time in the economic cycle," the letter said. |
| 'Battle of letters' | 'Battle of letters' |
| It added: "Cutting government waste won't endanger the recovery - but putting up National Insurance will." | It added: "Cutting government waste won't endanger the recovery - but putting up National Insurance will." |
| BBC business correspondent Nils Blythe said it was the latest in the "battle of the letters" which began in February when a group of economists wrote to the Sunday Times supporting the Conservatives' approach. That was followed by the letter to the FT by another group of economists backing Labour. | BBC business correspondent Nils Blythe said it was the latest in the "battle of the letters" which began in February when a group of economists wrote to the Sunday Times supporting the Conservatives' approach. That was followed by the letter to the FT by another group of economists backing Labour. |
| He said the Tories' support from business leaders, including the bosses of Marks and Spencer and Next, probably had a bigger impact on the debate because they were better known among the general public. | He said the Tories' support from business leaders, including the bosses of Marks and Spencer and Next, probably had a bigger impact on the debate because they were better known among the general public. |
| The row over Labour and the Conservatives plans for tax and spending dominated the first week of the election campaign. | The row over Labour and the Conservatives plans for tax and spending dominated the first week of the election campaign. |
| Gordon Brown's war with British business puts him on the wrong side of working people Philip Hammond, shadow chief secretary to the Treasury | |
| Labour plans to raise National Insurance by 1% for people earning more than £20,000 from April next year - which the party says is necessary to protect spending on health, policing and education. | Labour plans to raise National Insurance by 1% for people earning more than £20,000 from April next year - which the party says is necessary to protect spending on health, policing and education. |
| But the Tories say it would be a "tax on jobs" that would "kill the recovery" - and have pledged to block the bulk of the rise by saving £6bn cutting "wasteful" government spending. | But the Tories say it would be a "tax on jobs" that would "kill the recovery" - and have pledged to block the bulk of the rise by saving £6bn cutting "wasteful" government spending. |
| They have been backed by 80 senior business leaders and the Tories said on Thursday that more than 400 small firms were also supporting their position. | |
| "Once again, Gordon Brown's war with British business puts him on the wrong side of working people," said Philip Hammond, shadow chief secretary to the Treasury. | |
| Gordon Brown and Chancellor Alistair Darling have said the Conservative plans are "reckless" and based on "back-of-the-envelope" calculations. |