Labour and Tories ramp up attacks over economy

The economy will be the focus of Labour and Tory attacks on Thursday as both parties warn about the impact of each other's spending plans ahead of the general election.

Ed Miliband, Labour leader, will accuse the Conservatives of planning "the biggest cuts anywhere in the developed world", claiming that a Tory government would not mean "the good life" as Mr Cameron claims but "hard times" during three years of "extreme spending cuts".

But George Osborne warned once again of the "chaos" of a Labour minority government propped up by the Scottish Nationalist party - suggesting families could be £350 worse off under such a deal.

The Institute for Fiscal Studies, the independent spending think-tank, will later on Thursday publish an assessment of the spending plans of all the main parties.

Mr Miliband, speaking in Nuneaton, will cite figures from the International Monetary Fund suggesting that a Tory-run Britain faces the deepest spending cuts of any advanced country over the next three years.

He will challenge Mr Cameron's claim that the worst of the cuts have already been made, arguing that the Tories' plans would put public services at risk.

"The Tories are committed to the most extreme spending plans of any political party in generations," he will say.

Danny Alexander, the Lib Dem Chief Treasury Secretary, has attacked the Tory plan for reducing the deficit, saying it depends too heavily on public spending cuts rather than tax rises.

Mr Alexander claimed that the Tories would require £60bn of cuts to fund their spending plans - twice the amount they admit. That would remove £6 from every £100 the government spends for three years - more than the UK's defence and police budgets combined.

Mr Alexander said on Thursday morning that only a coalition including the Lib Dems could ensure "continued stability" in the financial markets, warning that more informal parliamentary deals would be politically unstable.

But Mr Osborne used an interview with the Today programme early on Thursday to present the choice in the election as one between chaos and competence, a favoured theme of his party's campaign.<

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He said voters could get "straight back to work with a clear plan" by voting for the Conservative party or they could watch as a Labour minority government tried to scrape together support, prompting fear in international markets - leading to higher mortgage rates.

Only the Tories could offer job stability, higher incomes and a strong economy, he insisted.

Mr Osborne's claim that families would be £350 worse off under a Labour-SNP arrangement is based on the presumption that Britain's debt interest bill would be £6bn higher.

The figure will be rejected by Labour, which says that the only person writing a Budget if it wins the election would be Mr Miliband and Ed Balls, the current shadow chancellor.

The party has ruled out a coalition with the SNP, although it could rely on its tacit support to get laws enacted if there is a hung parliament.

Mr Osborne said a pact between Labour and the Scottish nationalists would take Britain back to the "misery and destroyed livelihoods" it experienced "five or six years ago".

"The choice for this country is becoming clearer and clearer and starker and starker," he said.

He insisted the Tories were not running a negative campaign, saying the "vast bulk" of it had been "promoting the positive".

Labour claims the Tory economic plan involves cuts to public services of 3 per cent of GDP until 2018, unprecedented in any three-year period since after the second world war.

"In the 10 similar episodes across OECD countries for which there is available data, public health spending fell by an average of one per cent of GDP," the party said.

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