Osborne gambles tax cut ahead of TV debate

Busy old Westminster morning - Tory press conference in Millbank Tower (on the very site that Tony Benn was born), MPs expenses, daily lobby briefing. Run, run, run.

George Osborne, facing the biggest moment of his political career in the Channel 4 Chancellors debate tonight, decided to start the day by upping the stakes in the election race.

Osborne announced this morning that the Tories would not go ahead with the 1p National Insurance rise that Darling proposes.

The shadow chancellor claimed he could fund this tax cut with £12bn of efficiency savings in government spending that can be delivered without harming frontline services.

Some £6bn could be made in this coming financial year 2010-11, he said, to make a start in reducing government borrowing.

A further £6bn of savings would also be made in the Departments of Health and International Development - but would be re-invested in the front line - and in the Ministry of Defence, although not until the next financial year.

The pitch is that seven out of ten working people will be better off under a Tory government.

But this isn't just a stab at vote-winning tax cuts, it's a question of credibility too.

Osborne is Labour's prime target in the election and they were fast out of the blocks claiming that you cannot fund tax cuts on efficiency savings you have not yet made.

Ken Clarke, who was on the stump with Osborne this morning, said as much only a week ago. Both Cameron and Osborne have said the same thing in the past.

A full Labour rebuttal is underway, describing this tax cut a back of a fag packet policymaking. Ed Miliband is calling this a "panicked move" that undermines George Osborne's credibility. "You can't fund a tax cut on the never never," says Miliband. Whatever happened to the priority of cutting the deficit, they ask?

It was a bold move by Osborne, but one that looks like blowing up in his face before this evening. The immediate questions from journalists were all on the same theme - how can you identify savings from efficiency cuts that have not yet been made?

While he was on top of his brief Osborne looked pale and pasty when he sat down, his natural pallor unfortunately. It's going to be a tense day for him and it will be interesting to see how much flak the NI tax cut can take before it reaches the TV studio tonight.