Mandelson says Osborne 'boy in a man's job'

George Osborne, shadow chancellor, was drawn into an increasingly personal war of words over public spending on Sunday, after he said Labour had a secret tax-raising agenda and had completed a U-turn over education cuts.

He said the government had "capitulated" by belatedly admitting that cuts would be necessary but he faces the prospect of a fierce ad hominem counterattack by Labour and the Liberal Democrats.

Mr Osborne was criticised by both parties for his "false" claim to have unearthed a confidential government plan to increase income tax by £14.8bn; the Treasury said it was based on published Budget documents.

The episode reinforced a view in senior Labour and Liberal Democrat circles that Mr Osborne, 38, has shown poor judgment during the economic crisis and should be relentlessly targeted.

Lord Mandelson, business secretary, said Mr Osborne looked "like a boy in a man's job".

David Miliband, foreign secretary, said Mr Osborne had shown he was "not a serious person".

The Lib Dems plan to target Mr Osborne, partly to contrast him with Vince Cable, the party's treasury spokesman, who last week topped a poll of "most trusted" politicians.

"The public doesn't need George Osborne's imaginary secret documents or conspiracy theories to work out that the public finances are in a bad shape," Mr Cable will say at the Lib Dem conference in Bournemouth.

Mr Osborne's team said the attacks on him reflect his recent successes, arguing that he took a justified political gamble in putting the Tories at the forefront of arguing for public spending cuts.

Mr Osborne also argues that the Treasury papers contain new numbers and that the rapid growth in income tax receipts assumed by the Treasury is either based on tax rises or "improbable" returns to growth.

Mr Osborne on Sunday renewed his attack on the government's newfound candour over the need for cuts, accusing Ed Balls, schools secretary, of a U-turn over education spending.

Mr Balls, once a leading advocate of a strategy contrasting "Labour investment versus Tory cuts", became the first cabinet minister to set out plans for cuts, claiming to have identified £2bn of savings - including axing senior administrative jobs in schools.

David Cameron has never wavered in his support for Mr Osborne, although he did recognise the need to strengthen his economics team by bringing Ken Clarke, the former chancellor, back to the front bench.

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