Labour attack leaves Tories in disarray over tax cut pledges

Labour drew blood in the election fight over tax and spending plans when the Tories admitted that their £4bn of tax cuts would not reach people's pockets until next year.

Labour drew blood in the election fight over tax and spending plans when the Tories admitted that their £4bn of tax cuts would not reach people's pockets until next year.

Gordon Brown, the Chancellor, claimed the admission contradicted the Tories' pledge that tax reductions would be included in the party's first Budget in June if it won the election. The Tory manifesto says: "Within the first month our first Budget will cut wasteful government spending, stop Labour's third-term tax rises and lower taxes."

Labour seized on remarks by George Osborne, the shadow Chief Secretary to the Treasury, who conceded on Sky News that it would take the party two years to achieve its promised £35bn of savings from government waste. On tax cuts, he said: "They come into effect in the financial year that follows. It's like all tax cuts - there's no great secret there, that's what happens, by which stage we are making significant savings in waste and inefficiency. "

A Conservative spokes-man dismissed Labour's criticism as "completely bogus". He insisted the Tories had always made clear their tax cuts would take effect in the financial year starting next April because the current tax year was already under way.

However, Mr Osborne's comments appeared to contradict a statement by David Cameron, the Tories' policy chief. Asked if the Conservatives could cut taxes immediately, he replied: "Absolutely. Once you set a lower path for the growth of public spending, as we have, you can do these things."

Mr Brown claimed the Tories' tax and spending plans were "unravelling". He said: "For months they have told us their first Budget would cut taxes and that pensioners would have a tax refund this year. Having spent months suggesting they will cut taxes immediately, the Tories are now forced to admit that they cannot find the money to do so."

The first cracks in the Tories' carefully planned strategy came in response to an assault by Mr Brown and Tony Blair on their plans for the economy. Labour issued a detailed document questioning many of the savings identified by the Conservatives. It claimed that the Conservatives had also promised an additional £15bn of spending for which they had not found the money.

The Prime Minister denied that Labour was "rattled" and sending a mixed message by accusing of the Tories of planning £35bn of cuts and boosting spending at the same time. He insisted that it was the Conservative plans that were "incoherent" and not Labour's attack on them.

He added: "The Tories are an absolute mess. If you elect an economic plan that is as big a mess as this, that is as faulty and flawed as this, you elect an economic risk. If you elect an economic risk, watch out for your interest rates, watch out for jobs, watch out for the stability of the economy. It's as simple as that."

Mr Blair said that the Conservatives had not resolved a conflict between the opportunists and extremists in their ranks. Like the Labour Party in the 1980s, "they have not worked out what they want to be, where they are. It's a mess because one part of the party wants to go one way and the other part wants to go the other way."

The Tories dismissed Labour's analysis as just another "dodgy dossier". Michael Howard said last night that his party was not planning any public service cuts or unaffordable spending. "Mr Blair is clearly rattled and clearly, I think, he has lost the plot. His slogan is 'Forward Not Back' and he is not talking about his plans at all," he said.

The Tory leader said Labour's criticism was "utterly wrong". He said: "We have had these plans looked at by the Institute for Fiscal Studies, which is the independent body, the most respected body. They have confirmed that if we deliver on our savings, which we are determined to do, we will be able to cut taxes by £4bn in our first Budget."