More than 20 of Britain's top business leaders have publicly backed George Osborne's pledge to partially reverse Labour's planned rise in national insurance.
The chief executives of major UK companies including Marks & Spencer, J Sainsbury, Whitbread, Kingfisher, Next and Mothercare have signed a letter saying they support Osborne's plan and warning that raising NI rates by one percentage point would damage British business as the country emerges from recession.
The group, which collectively employs 500,000 people, said: "We are responsible for ensuring that our businesses and our employees come through the recession in good shape. The government's proposal to increase national insurance, placing an additional tax on jobs, comes at exactly the wrong time in the economic cycle," they wrote.
The letter, published by the Daily Telegraph, is a major endorsement for the shadow chancellor, who had been attacked by Labour and the Liberal Democrats after announcing his plan on Monday morning. Alistair Darling had accused Osborne of taking a "terrible risk" by guaranteeing no rise in NI for those earning under £35,000, at a cost of around £5.6bn.
Osborne has said the Conservatives would finance this commitment though an immediate push for efficiency savings if they won the upcoming general election. This "war on public sector waste" has found favour with the corporate leaders who signed today's letter – including Sir Stuart Rose, Justin King and Sir Stelios Haji-Ioannou.
"In the last few years, the private sector has improved its productivity by around 20%, while productivity in the public sector has fallen by 3%. Savings can be made by removing the blizzard of irrelevant objectives, restrictive working practices, arcane procurement rules and Whitehall interference," the letter said.
"Cutting government waste won't endanger the recovery – but putting up national insurance will."
Two of the signatories – Rose of M&S and Paul Walsh of drinks giant Daigeo – currently serve on the Business Council for Britain, advising Gordon Brown on economic issues.
Others, though, are known supporters of the Conservative party. Simon Wolfson, chief executive of Next, and Lord Harris, the chief executive of Carpetright, have both donated money to David Cameron in the past. JCB, whose chairman Sir Anthony Bamford signed the letter, has also provided support to the party.
Darling and Lord Mandelson were quizzed about the letter at a press conference this morning. The chancellor reiterated his claim that many of Osborne's efficiency savings are illusory, or already being implemented by the government.
"My guess is that these business leaders did not get where they are today by accepting such flimsy advice," he said.
Mandelson also attacked the shadow chancellor, accusing him of offering "quack medicine".
"George Osborne is like a kid in a sweetshop who thinks he can just grab sweets from a jar. Unfortunately, it's the country that will be left very sick afterwards," the business secretary said.
The letter was signed by:
Sir Anthony Bamford, chairman, JCB
Bill Bolsover, chief executive, Aggregate Industries
Dominic Burke, chief executive, Jardine Lloyd Thompson
Ian Cheshire, chief executive, Kingfisher
Neil Clifford, chief executive, Kurt Geiger
Mick Davis, chief executive, Xstrata
Aidan Heavey, chief executive, Tullow Oil
Lord Harris of Peckham, chairman and chief executive, Carpetright
Justin King, chief executive, J Sainsbury
Sir Christopher Gent, chairman, GlaxoSmithKline
Ben Gordon, chief executive, Mothercare
Sir Stelios Haji-Ioannou, founder and chairman, easyGroup
John Lovering, chairman, Mitchells & Butlers
Graham Mackay, chief executive, SABMiller
Alistair McGeorge, chief executive, Matalan
Nicolas Moreau, group chief executive, Axa UK
Stephen Murphy, chief executive, Virgin Group
Alan Parker, chief executive, Whitbread
Sir Stuart Rose, executive chairman, Marks & Spencer
Paul Walsh, chief executive, Diageo
Joseph Wan, group chief executive, Harvey Nichols
Simon Wolfson, chief executive, Next
Zameer Choudrey, chief executive, Bestway Cash & Carry
