Lord Mandelson said back in April:
“It is simply not possible to accept the assumptions being offered by anyone, whether they are the IFS or the Treasury”
Labour says criticism by IFS thinktank on cuts is misleading
Institute for Fiscal Studies figures relate to 2016-17, says Lord Mandelson
Labour defended itself today from claims by the Institute for Fiscal Studies that it had not set out plans to cut the deficit, saying the thinktank's call for a deficit reduction programme stretching to 2016-17 was unrealistic.
Both Labour and the Tories also questioned why the IFS did not include their efficiency plans in its calculations – which in Labour's case amount to as much as £11bn .
The rare public questioning of the respected IFS came as Labour tried to move on to the front foot over the economy by asserting it had made the right decisions to pull Britain from recession, and had detailed plans to attack the deficit.
David Miliband, the foreign secretary, also accused David Cameron of economic illiteracy by likening the British economy to that of Greece. He said the levels of debt, growth forecasts and bond maturity in the countries were totally different.
Lord Mandelson, the business secretary, said at a Labour press conference: "The IFS figures relate to 2016-17, beyond the life of the next parliament for which the general election is being held now. It is simply not possible to accept the assumptions being offered by anyone, whether they are the IFS or the Treasury, or in what conditions anyone will be taking these decisions since it is such a long time period. No government would set a budget for five years' time, especially in the current climate."
Labour Treasury sources said the whole IFS attack was misleading, and had done nothing to improve public understanding because the IFS was wrongly implying the political parties were duping the electorate by not setting out spending plans beyond the next election.
Robert Chote, the IFS director, said he had chosen 2016-17 because that was the date by which the government said the fiscal contraction would end. He accepted that Labour's statutory goal was to cut the deficit by 2013-14, and acknowledged that it was not possible for any government to set out the last penny and pound of what it would be spending in 2016-17.
He said the efficiency savings were not counted by the IFS because they were not savings, and might have happened anyway. He added that he believed some Labour efficiency savings, such as in the advertising budget, were in reality cuts, and not efficiency savings.
The debate came as leaders from all three parties set out their stall to the Institute of Directors, with Labour and Liberal Democrats criticising the way in which the IoD had pushed for a reversal of the planned rise in national insurance contributions.
Labour claims it had set out precise plans to halve the deficit by 2013-14, including the precise amounts to be raised by growth, higher taxes and lower spending.
The Liberal Democrat Treasury spokesman, Vince Cable, said: "I have no time for billionaire tax dodgers who step off the plane from their tax havens into the country where they make their money and have the effrontery to tell us how to vote and how to run our tax policies. If some of them came onshore and paid their taxes it would make a useful dent in the budget deficit."
Cable said he had no quarrel with the IoD lobbying for lower taxes which affect its membership, but he said politicians needed to take into account the needs of the whole economy and say "no, sorry we simply can't afford what you ask".
But the shadow chancellor, George Osborne, hailed the unprecedented intervention by 100 leading business figures against an increase in national insurance contributions. The Tories plan to fund the lost NICs revenue through £6bn efficiency savings.
An independent academic, Prof Colin Talbot, of Manchester Business School, claimed today the impact of the Tory efficiency savings could lead to a loss of 100,000 public and private sector jobs.
But Osborne said it was right to be seen to start dealing now with the budget deficit and showing the world that the British government can live within its means.
He told the IoD: "There are some in this election who argue that to do anything on the deficit this year would be a mistake. They say that whoever is elected next Thursday should wait almost a whole year, until April 2011, before doing anything about the fact we are borrowing more as a percentage of our economy than any major economy in the world."
Mandelson, who was at the same IoD conference, refused to back down in the face of the business community objections to the NICs rise.
"I know we have been criticised by some for our plans to raise NICs by an extra penny next year once growth is a lot stronger, forecast at 3%," he said.
"But don't tell me that taxes should not go up and at the same time tell me that the No 1 priority is fixing the public finances. As I say, tough choices."
Ed Balls Found in Wheelie Bin – Nabidana
Progressive Conservatism? – Iain Martin
The IFS are a Bunch of Lefties – Crash Bang Wallace
Old Holborn Vs. Climate Camp – The Guardian
Labour Council’s Wasteful Payments to Labour Party – LibDemVoice
SpAd Puts Hague in a Spot – Mail
Hague’s New Adviser Raises Questions – Telegraph
Querying Hague’s Advisor – Evening Standard
The Westminster Lunch Crunch – Total Politics
Baroness Ashton’s 100 £100k staffers – Telegraph
Double-Dip Predictions Round-Up – Speccie
AV: Yes Side is Staring at Defeat – Liberal Vision
Gay Intolerance Forces Catholic Care to Close – ASI Blog
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