UPDATE 1-UK’s Labour dismisses Greece comparisons

* Economy moves centre stage after think-tank criticism

* Polls show May 6 election headed for inconclusive result

* Leaders prepare for final TV showdown on Thursday

(Releads, adds Mandelson quote, background)

By Kylie MacLellan

LONDON, April 28 (BestGrowthStock) – Britain’s ruling Labour party
dismissed comparisons between the UK and Greece on Wednesday as
the issue of getting a record budget deficit under control
returned to the fore ahead of next week’s election.

Vince Cable, treasury spokesman for Britain’s third party,
the Liberal Democrats, told Reuters the country risks sliding
into a Greek-style financial crisis unless the next government
takes drastic action to cut borrowing. [ID:nLAL004406]

Greece, which saw its debt downgraded to junk status by
rating agency Standard & Poor’s on Tuesday, is currently in
talks with the IMF and the European Union on getting a 45
billion euro bail-out package to prevent a sovereign default.

Greece’s budget deficit last year stood at 13.6 percent of
GDP, compared to a British deficit running at over 11 percent.

Labour Business Minister Peter Mandelson said that likening
Britain to Greece was “frankly ridiculous”.

“We are in a very, very different situation in Britain from
that in Greece,” he told reporters. “The UK economy is growing
… it is gaining strength and will do during the course of this
year. In contrast Greece is in recession.”

The British economy, a key campaign battleground, was back
in focus after a think-tank criticised all parties for the lack
of detail in their fiscal plans ahead of Thursday’s final
television leaders’ debate, which will focus on economic policy.


Repairing the public finances will be the biggest domestic
policy challenge for whichever party wins the May 6 election,
but the parties have been reluctant to risk voters’ wrath by
clearly identifying the extent of cuts.

The Institute for Fiscal Studies said on Tuesday the
impending spending squeeze would be the sharpest in at least 30
years and warned the parties would likely have to raise taxes
more than they are prepared to admit. [ID:nLDE63Q2DO]

All three major parties agree tough fiscal tightening is
needed to reduce the budget deficit, but they differ over when
the pain should start and how to share the burden.

Labour’s Mandelson, opposition Conservative finance
spokesman George Osborne and his Lib Dem counterpart Cable will
come under scrutiny over their respective plans for the economy
as they face questions from business leaders in London.

Finance minister Alistair Darling will also make a speech on
the economy later.

In an interview with the Times newspaper, Lib Dem leader
Nick Clegg said Labour, in power for 13 years, lacked energy,
and the election had now become a choice between “two competing
pitches for change”.

“This is now a two-horse race between the Conservative Party
and the Lib Dems,” he said.

Opinion polls on Wednesday continued to point to a hung
parliament, in which no one party wins an overall majority, but
showed the Conservatives and Labour had regained some ground
from the Lib Dems, who have enjoyed a ratings boost since the
first TV leaders’ debate. [ID:nUKPOLLS10]

Clegg faces Prime Minister Gordon Brown and Conservative
leader David Cameron on Thursday in the third and final TV

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UPDATE 1-UK’s Labour dismisses Greece comparisons