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Coalition parties hail GDP figures

GDP figures showing the British economy growing faster than expected have given a General Election boost to the coalition parties.

Chancellor George Osborne said the Office for National Statistics (ONS) assessment that the UK economy grew by 2.8% in 2014 - up 0.2% from earlier estimates - was proof that the Conservatives' "long-term economic plan" was working.

Liberal Democrat Treasury minister Danny Alexander said his party had been "the rock of stability on which this recovery has taken root" and warned that giving sole control of the economy to either Tories or Labour in the May 7 poll would put growth at risk.

The new figures came as Prime Minister David Cameron challenged Labour to spell out its tax plans, warning voters that Ed Miliband's party will "pick your pocket" if they win power.

But shadow chancellor Ed Balls insisted that all of Labour's manifesto pledges would be fully costed and funded, and accused the Conservatives of planning "even deeper cuts in the next three years than we have had in the last five".

Mr Balls visited Swindon to set out Labour's plan to cut and then freeze business rates, which he said would save 1.5 million small businesses an average £400, funded by reversing a coalition cut in the main rate of corporation tax from 21p to 20p due to come into effect on April 1.

Large companies had already benefited to the tune of £7 billion from cuts in the levy over the past five years, while small businesses had paid £3 billion more in rates, said the shadow chancellor, adding: "It's not right to go ahead with the further cut for larger companies when we can use the money in a better way to help us create more good jobs by backing small companies."

Mr Cameron - who has set out a Conservative pledge to boost employment by two million over the next five years - said Labour's plan to hike corporation tax was "crazy" and Tories predicted it could cost almost 100,000 jobs.

The Conservative leader said he "made no apology" for claiming that Labour would increase taxes on working families by more than £3,000, despite the Tory estimate being judged unfounded by independent economists and dismissed as "made up" by Labour.

The Prime Minister said both Tories and Labour were promising £30 billion of deficit reduction and cast the election as a "big choice" between Tory plans to achieve the savings through cuts to welfare and public spending and Mr Miliband's preference for tax to take some of the burden.

Voters face "a choice about whether you want a government that will find savings and not pick your pocket or with Labour a government that will pick your pocket, I think, on a pretty frequent basis", said Mr Cameron.

But Liberal Democrats urged the PM to "come clean" over Tory plans to cut £12 billion from working-age welfare, after he repeatedly ducked challenges to spell them out in detail during a round of broadcast interviews.

Lib Dem spokesman Lord Scriven said: " David Cameron either doesn't know where the axe will fall, or he is not being honest with the public. Either way he is riding roughshod over some of the poorest people in society.

" The Conservatives might not think it's 'relevant' to say whether they would tax disability benefits or restrict child benefit to the first two children, but the people who rely on this support do."

Deputy Prime Minister Nick Clegg committed Lib Dems to providing an extra £2.25 billion for mental health services over the next five years and said the party would deliver the £8 billion a year extra health funding by 2020 demanded by NHS England head Simon Stevens.

Mr Osborne said the ONS's upward revision of GDP in the fourth quarter of 2014 to 0.6%, from a previous estimate of 0.5%, c onfirmed the UK as the "clearly fastest-growing major advanced economy".

He hailed a "hat-trick of good news about the British economy", with real household disposable income per capita up strongly, c onsumer confidence at its highest level for over 12 years and living standards now higher than at the time of the last election in May 2010.

"Voters now face a stark choice: do we stick with a plan which is working, delivering growth and jobs, or do we put all that at risk with Ed Miliband whose policies of more spending, more borrowing and higher taxes will lead to economic chaos?" said Mr Osborne.

Mr Alexander said: "Rescuing our economy was the main reason that the Liberal Democrats formed the coalition. As we approach the General Election, this upward revision in GDP is further evidence that our recovery plan is working. Handing back control of our economy to either Labour or the Tories in government on their own in this election will put all this hard-earned progress at risk."

Responding to the GDP figures, Mr Balls said: "Tory claims that the economy is fixed will ring hollow with working people who feel the recovery may be working for a few at the top, but isn't reaching them.

"This is the slowest recovery for 100 years and the Tories have failed to deliver the sustained rises in living standards they promised.

"We can do better than this with a better plan that puts working families first, creates more good jobs and backs small businesses.

"That's why Labour's economic plan will raise the minimum wage, deliver more apprenticeships, cut business rates and introduce a lower 10p starting rate of tax."

Shadow chancellor Ed Balls insists all of Labour's manifesto pledges will be fully costed and funded, and accused the Conservatives of planning "even deeper cuts in the next three years than we have had in the last five".

Mr Balls visited Swindon to set out Labour's plan to cut and then freeze business rates, which he said would save 1.5 million small businesses an average £400, funded by reversing a coalition cut in the main rate of corporation tax from 21p to 20p due to come into effect on April 1.

PA reporter Sam Lister tweets from the Labour campaign trail: "On GDP, Balls says if the Conservatives want to use figures to show their plan is working 'we say bring it on'."

https://twitter.com/sam_lister_/status/582858667491483648

Mr Balls said the economic recovery had been the slowest in 100 years and was set back in 2010 by the Conservatives.

He added: "A small upward revision today in the GDP figures doesn't change that overall record. This has been a disappointing recovery and it didn't have to be this way.

"If the Conservatives want to go round and say 'Our plan is working, look at the GDP figures; our plan is working, look at the figures on disposable income' then we say bring it on because the reality is that this is the toughest squeeze on people's living standards in a parliament since the early 1920s."

He added: "I don't think that just crossing your fingers and hoping for the best is good enough."

Ukip leader Nigel Farage said it was no surprise the economy had grown, given that the coalition has doubled the size of Britain's debt.

He said: "If you max out your credit card every month, your lifestyle will improve, of that there's no question, but at some point in time you have to pay the bill back.

"We have growth in the economy, we've done it through massive year-on-year budget deficit financing."

Labour Treasury spokesman Chris Leslie was pressed over whether the party was planning tax rises totalling £15 billion, as the Prime Minister claimed.

Mr Leslie told the BBC: "That's just not our plans and it's not the case."

Asked how Labour would split the burden of deficit reduction between tax rises and spending cuts, Mr Leslie said: "I challenge the premise of the question. You are only giving two ways out of the three to deal with the deficit. That third one is making sure we get out of this low-wage spiral and boost revenues for the Treasury, because if you have low pay as endemic as we have, you are going to have to keep topping it up with social security and tax credits, which costs a lot more, and you're also going to see a fall in tax revenues.

"For us, you can't detach the economy from what happens with the public finances. The two are inexorably related.

"The Tories have tried for the last five years (to say) it's all about cuts, and it hasn't worked. Their strategy is going to leave us with £75 billion of borrowing, so they've failed on their promise to get rid of the deficit. We've got a better plan."

Spelling out Lib Dem plans on deficit reduction, Mr Clegg said: "We will need to introduce some further savings to government expenditure. We will need to make some further reductions, though not nearly on the scale the Conservatives are predicting, on welfare. We will need to bear down on tax avoidance and tax evasion.

"And yes, some taxes for the very wealthy will need to go up. Income tax, VAT, National Insurance and headline corporation tax rates won't need to go up, but there will need to be some tax changes in order to pay for all this."

Meanwhile, Institute for Fiscal Studies director Paul Johnson questioned whether Conservative plans to recoup £5 billion from tax evasion and aggressive tax avoidance were achievable.

"Conservatives have said we're going to get £5 billion from tax avoidance measures," Mr Johnson told Sky News. "Now that's a very flaky number - where do you get £5 billion from tax avoidance? We don't know.

"Given the scale of spending cuts they'll otherwise require, they must be at least thinking about tax rises."

Treasury Minister David Gauke admitted that voters had gone through a "difficult period of time" under the coalition when living standards have far from boomed.

But the Tory minister blamed it on the bank-centic nature of the financial crash, the large deficit left by Labour, the eurozone crisis and high commodity prices, and stressed that living standards were now improving.

Asked to defend ONS figures showing disposable income per head had only grown by 0.2% since May 2010, when the coalition came to power, Mr Gauke told BBC Radio 4's PM : "Well I accept that we've gone through a difficult period of time, I'm not making a great boast that this has been a period of time where living standards have boomed, far from it.

"Over the course of the last year it's gone up 2%, that's good progress but that is on top of a number of years that have been difficult for reasons I'm happy to explain but we are now moving in the right direction".

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