'Time to come clean' on where cuts will fall

This week all three parties were accused of hiding the vast quantity of cuts they were planning, with the Institute of Fiscal Studies saying that the Liberal Democrats were "the best of a bad bunch" as they had revealed 26 per cent of the savings they would need to make, Labour had only revealed 13 per cent and the Tories 18 per cent.

Unlike the first two debates, it did not take long for the leaders to go on the attack with Mr Brown repeatedly accusing Tory leader David Cameron's tax policies of being reminiscent of the "same old Tory party".

Mr Cameron said Labour were trying to scare people with false claims about cutting benefits for the elderly and families, and Mr Brown stated neither Nick Clegg nor Mr Cameron were fit for Government as they had not "thought their policies through".

The issue of where the cuts will fall – which all parties have kept a closely guarded secret during the campaign – was addressed directly when the leaders were called on to be honest.

Mr Clegg said his party had set out detail in their manifesto on public sector pay restraint, cutting tax credits for the top 20 per cent of recipients, and scrapping the Eurofighter and biometric passport projects.

"We've set out much greater detail than any other party – 15bn worth of savings – which are a sort of upfront downpayment to deal with this huge black hole that we have in our public finances," he said.

Mr Brown said Labour had set out a four-year "deficit reduction plan" starting in 2011 including "tax rises that are fair, spending cuts that are equitable, and at the same time growth in the economy that is essential for recovery".

This would mean an increase in the top rate of tax, changes to pension tax relief and a National Insurance (NI) rise.

"We have one principle that we are adopting and it's clear," Mr Brown said. "We are not going to allow the frontline National Health Service, or schools or policing to be cut. We will find the cuts in other areas."

Mr Cameron said politicians needed to be "frank" about the fact cuts were coming and claimed the Tories were the "first to say" that cuts would have to be made.

"If I were your Prime Minister I will do everything I can to protect the frontline services," he said. Mr Cameron insisted his party had set out "some of the difficult things" that were needed, adding: "We are not just relying on waste."

This included a public sector pay freeze and an extension to the retirement age.

It was on tax where the debate was as much about ideology as policy after the leaders were asked what they would do because the "taxman is taking more and more from average workers".

Mr Cameron justified his party's plans on inheritance tax by claiming it would encourage families "to do the right thing" and save for their children.

And responding to Mr Brown's accusations that benefits would be cut under the Tories he snapped: "And let me just say this about tax credits – they would stay under a Conservative government.

"Gordon Brown has got to stop misleading families in this country like he's been misleading older people and cancer patients as well."

Mr Brown said it had been "tough in the last few years because of the recession" and added that his party had tried to help when people were in difficulty through tax credits.

He also repeated his claim that the Conservatives planned to cut tax credits but "at the same time give an inheritance tax cut to the 3,000 richest people in the country of 200,000".

He said: "Now that's not fairness, that's the same old Conservative party – tax cuts for the rich and cutting the child tax credits for the very poor. It's simply not fair."

Mr Clegg said Britain's tax system was "grotesquely unfair".

He said: "After 13 years of Labour, who would have believed it? That you would have our tax system where multi-millionaires from the City of London pay a lower rate of tax on their capital gains than a cleaner does on her wages."

The leaders also took turns to take shots at the banks, describing them as "unacceptable", "irresponsible" and "outrageous".

Labour 'escapes gaffe damage'

Labour appeared to have avoided any immediate damage from Gordon Brown's "bigot" gaffe in an opinion poll released last night.

The YouGov daily tracker poll for The Sun – conducted mainly after he was heard describing a pensioner as "bigoted" on Wednesday – showed Labour on 27 per cent, the same as the previous day.

The last opinion poll to be released ahead of last night's debate, it put the Tories in the lead on 34 per cent, and the Liberal Democrats down three points on 28 per cent.