ConHome expects Osborne to cancel Labour's NI increase as part of pre-election promises
Interviewed on Radio 4's Today programme George Osborne said that the Chancellor had failed to use his Budget to set out a credible plan to reduce the deficit. He said that people will know what they are voting for, in terms of Tory policy, by the time of polling day. After crunching through the Government's numbers he promised to set out more detail on Tory plans but did not say when. The Shadow Chancellor said he wants a clear mandate from the General Election to deal with the biggest budget deficit in the G20 group of nations.
As part of the pre-election package, ConservativeHome expects Mr Osborne to announce that a Tory government will cancel Labour's National Insurance tax rise. The Tories will announce an alternative way of plugging the hole. Earlier this week Policy Exchange argued that the NI rise was a very damaging way of raising extra revenue.
Mr Osborne declined to put a figure on what he meant by eliminating "the bulk" of the structural deficit in the next parliament. Labour has promised to eliminate two-thirds of the structural deficit (if you believe in Labour promises). Drawing on an OECD survey Mr Osborne said experience in other countries was that the right balance of spending cuts and tax rises was 80/20. You can't tax your way out this mess, he warned.
Noting that Portugal was downgraded yesterday, he warned that a downgrade of Britain's debt was very real but he did not spell out the consequences of such a downgrade for the average mortgage payer (as I've attempted to do).
The Shadow Chancellor had the airwaves to himself because the Chancellor, Alistair Darling, had refused to debate with him in the top 8.10am slot.
Earlier, on Sky News, Mr Osborne had focused on Labour's failure to raise income tax thresholds (blogged here). Calling this a stealth tax he attacked the Chancellor for not having the straightforwardness to announce it properly in his Budget statement.
Under questioning from Sky's Eamonn Holmes he refused to rule out a VAT rise. No credible Chancellor boxes himself in on tax options, he said, but he insisted he had no "secret plan" to raise VAT.
> Yesterday's CCHQ video: Behind-the-scenes with George Osborne as he analyses "Labour's last Budget"