Tories and Labour hit by early election setbacks

Prime Minister David Cameron speaks in front of 10 Downing Street after meeting with the Queen to dissolve Parliament. Picture: Getty

David Cameron, who conceded at a rally last night that he was “not the perfect prime minister”, was dismissed by the respected economic think tank, the Institute for Fiscal Studies (IFS).

It said the Prime Minister was wrong to claim a Labour victory would result in tax rises of more than £3,000 for every working family.

Meanwhile, Labour leader Ed Miliband ran into difficulties after the UK chief executive of engineering giant Siemens objected to the use of his quote in an advert for the party.

In Scotland the campaign kicked off with former prime minister Gordon Brown leading efforts to win back lost Labour votes in Glasgow, where SNP First Minister Nicola Sturgeon was also campaigning.

Meanwhile, Scottish Conservative leader Ruth Davidson appeared to admit her party could not win a majority in the UK and urged a minority government instead.

The Tories were narrowly ahead in a UK-wide poll commissioned by Lord Ashcroft on day one of the campaign, with 36 per cent to Labour’s 34 per cent.

Launching his campaign yesterday, the Prime Minister focused on the economy as he spoke in Downing Street before heading to a rally in Chippenham, Wiltshire, a seat currently held by his Liberal Democrat coalition partners.

He issued a warning that the 7 May poll offered voters a “stark choice” between him and Mr Miliband as prime minister, and claimed a Labour win would deliver “economic chaos”.

His £3,000 claim was dismissed by Labour as a “made-up figure” as the IFS released an analysis that found the party had not said “anything to suggest that this is what they are planning”.

But Siemens UK chief executive Juergen Maier objected to Labour’s use of a quote in a party advert which warned of the risk Mr Miliband believes would be posed to British business by a referendum on the UK’s membership of the EU, which has been promised by Mr Cameron if the Conservatives win.

Mr Maier was quoted as saying that the prospect of a referendum was “profoundly worrying for business leaders”, but later said he had not wanted his comments “attributed specifically to any particular party”, as his company was apolitical. Mr Miliband said Labour was simply quoting public statements by business figures.

Tories said that Labour would need to deliver £30 billion of tax rises or spending cuts by 2017-18 to meet the requirements of the Charter for Budget Responsibility which it voted for last year.

Conservative sources pointed to comments made by Mr Miliband in 2010 – before he became Labour leader – as an indication that he would rely on £15bn worth of tax hikes for half of the necessary “consolidation”.

But the IFS said that even if Labour chose to divide the burden of consolidation 50/50 between taxes and spending cuts, it could meet its fiscal target of falling public debt with a £5bn tax rise in 2016-17 and may need no tax rises at all to achieve its goal of eliminating the current budget deficit by the end of the parliament.

With their commitment to balancing the overall budget by 2017-18 and going on to run a surplus, the Conservatives would require “substantially bigger spending cuts or tax increases than Labour”, the IFS said.

“There is little value in bandying around numbers which suggest either party would increase taxes by an average of £3,000 for each working household,” said the IFS analysis. “We don’t know what they will do. But neither of the main parties has said anything to suggest that is what they are planning.”

Chancellor George Osborne said the Conservatives had made a “reasonable estimate” when claiming a Labour victory would result in tax rises of more than £3,000 for every working family.

He said: “It’s based on what the Labour Party voted for and what Ed Miliband has said he will do. He’s very clear he would put taxes up to deal with the hole in the public finances that we would go on filling by savings of public spending and that means that money comes out of working families.

“I think that’s a perfectly fair thing to point out.”

But Labour Treasury spokesman Chris Leslie said: “This is a disastrous and embarrassing start to David Cameron’s campaign. Within hours of making totally false claims about Labour, the independent IFS has totally undermined them.”

Mr Miliband launched Labour’s business manifesto with a warning that Mr Cameron’s referendum promise represents “a clear and present danger to British jobs, British business, British families and British prosperity”.

He accused Mr Cameron of overseeing a “divided Conservative Party, half of whom want to leave” the EU. The Prime Minister did not seem to know his own mind on Europe and had promised a Tory leadership contest in which candidates were likely to vie against one another to be the most extreme on Europe, said Mr Miliband. “It is a recipe for two years of uncertainty,” he said.

Promising to “build a better country together”, Mr Miliband said: “There are two futures on offer at this election: to carry on with a Conservative plan based on the idea that as long as the richest and most powerful succeed, everyone else will be OK.

“Or a Labour plan, a better plan, that says it is only when working people succeed that Britain succeeds.”

At the rally in Wiltshire last night, Mr Cameron asked whether people wanted Mr Osborne in the Treasury or Ed Balls who “broke the banks”, and praised Home Secretary Theresa May as preferable to Labour shadow Yvette Cooper.

“I don’t say we have solved every problem in our country,” Mr Cameron said. “Of course not. But we have created 1,000 new jobs for every day this government has been in office.

“We have paid down the deficit and given another parliament we will clear it altogether.”

He went on: “We have got a record we can be proud of. But we have also got a team – not just a Prime Minister, a team – that has been turning this country around.

“Leadership does matter. I don’t claim that I have got every call right or that I am the perfect prime minister. But I know this.

“I had a job to do in 2010, sorting out our economy, getting the deficit down and getting people back to work.

“There are only two people that can walk through that door in Number 10 in 39 days time – there is me or Ed Miliband.”