General Election: Ken Clarke visits Leeds

Connservative big-hitter Ken Clarke has waded into the spending cuts versus National Insurance rise row that has been a key feature of the General Election campaign.

On a visit to Leeds, the party's shadow Business, Innovation and Skills secretary and former Chancellor – wearing his trademark hush puppies – mounted a robust defence of the Tories' plan to chop 6 billion of

state spending during the current financial year.

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His comments came as Labour's campaign was boosted by the publication of a letter from 77 economists from around the world backing Gordon

Brown's argument that such a big reduction could cost jobs.

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The letter, organised by economics professors Lord Skidelsky of Warwick University and Lord Layard of the London School of Economics, said: "This cut is described as efficiency savings.

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"But in macroeconomic terms it is just a cut by another name.

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"This is not a time for such destabaliising action. The recovery is still fragile."

It warned that rash action now could "imperil jobs" and hit the prospects for reducing the country's deficit.

Mr Clarke said he had great respect for Lord Skidelsky but he strongly believed the economists who had signed the letter were wrong.

He argued that the increase in public spending was not a planned financial stimulus but a consequence of Labour's mismanagement of public finances.

Mr Clarke said: "We have a serious fiscal crisis which has to be tackled straight away.

"The Government admits there is wasteful spending in their bloated budgets but they are saying you shouldn't start cutting expenditure yet but should carry on wasting money.

"Instead they say put up National Insurance and put up the costs of business. I find that ludicrous.

"Gordon Brown says a cut in waste is taking money out of the economy but that's nonsense."

Mr Clarke said the question was simple: "Do you want 6 billion of tax increases or a 6 billion reduction in wasteful public spending?"

He argued that compared to the overall level of public spending, 6 billion was not a particularly big amount and experts had identified a number of areas where money could be saved including cancelling "failed giant IT projects" and not recruiting people to "back office" jobs as staff retired.

Mr Clarke said Leeds was an "exciting regenerated" northern city but it still needed the right economic climate to attract more private investment.

He said: "The next Government has got to be the most pro-business Government we have had since the war to get us out of the deepest and longest recession we have had."

Mr Clarke acknowledged that whoever was in power after May 6 faced some tough public spending choices.

He said: "We will be dominated by the need to tackle the deficit.

"We have to face up to that. It has to be done sensibly and professionally. After the election a full public spending review will be needed."

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