Cameron goes on attack over economy

Mr Cameron used a speech yesterday to warn that a Labour victory in next year’s General Election would result in “total and utter chaos”, with more debt, higher taxes and deeper cuts to public services.

The Prime Minister said the economic plans set out last week by Ed Miliband amounted to a “massive gamble with our future” which could result in the national debt being £500bn bigger in 21 years’ time.

His decision to use a planned speech on the economy to directly challenge Labour’s plans is seen as the clearest sign yet that with 141 days until the election, the major political parties are already on an election footing.

Mr Miliband sought last week to win back trust in Labour’s ability to handle the nation’s finances by setting out what he termed a “tough and balanced” approach which would eliminate the current deficit “as soon as possible”.

But the Prime Minister drew a contrast between Labour’s plan to balance the “current” budget – which covers day-to-day spending – and the Conservatives’ more ambitious target of balancing the overall budget with infrastructure investment.

In a speech in Poole, Dorset, Mr Cameron cited estimates from the independent Institute for Fiscal Studies that this would give Labour leeway to borrow an additional £28bn a year and unveiled a Treasury estimate that this could add £500bn to the national debt.

Experts though have warned that the scale of the squeeze required to meet Government targets would mean spending cuts “on a colossal scale”.