Labour manifesto to promise 'Budget responsibility'

The Tories have promised to increase NHS spending by £8bn if they win the election

It is a topsy turvy fiscal battle between Labour and the Tories.

Hard on the heels of the Tories promising to increase NHS funding by £8bn a year in real or inflation-adjusted terms, without announcing spending cuts or tax increases to pay for it, Labour is characterising itself as the party that won't make any unfunded spending increases.

So the first page of its election manifesto, which will be published on Monday, is devoted exclusively to its claimed fiscal toughness, and says "every policy in this manifesto will be paid for without requiring any additional borrowing".

The manifesto unveils what Labour calls a "Budget Responsibility Lock", promising to "cut the deficit every year" - with all Labour budgets to be verified as deficit-reducing by the Office of Budget Responsibility.

The manifesto also pledges that "any government led by Ed Miliband will not compromise" on these fiscal rules - which is supposed to be an answer to the Conservatives' criticism that a minority Labour government would be forced to spend and borrow recklessly to secure the support of the SNP.

The Tories will claim that Labour claims of future prudence lack credibility, given that the deficit ballooned to an unsustainable 10% of national income on its watch, after the financial crash of 2008.

And it will also point out that its own fiscal plans would begin to get the national debt down earlier and faster than Labour's.

That said, Labour will say that the Tories may talk a hairshirt approach to the public finances, but they are also promising £8bn of NHS spending increases and £8bn of tax cuts - for a rise in the 40% tax threshold and in the tax-free allowance - without saying how they would finance this largesse.