Blair not ready to issue tax promise

Tony Blair has ripped into the pledges of the Conservative party by rejecting Michael Howard's claims that he can slash government expenditure and lower taxes.

The Prime Minister wrestled with the Tory leader at their regular question time meeting and said opposition tax proposals in the run up to the election were unrealistic.

Mr Blair added that under a third term of Labour government he could not rule out the possibility of tax rises, despite criticism that he had already raised taxes 66 times in stealth.

He did however promise to answer his critics in the near future and said they should wait for his own party's tax approach, due to be unveiled in the forthcoming manifesto.

"What we will never do is promise to cut taxes and spend more - exactly the promises made before by the last government. And what did it end up with? Boom and bust," Mr Blair said.

His comments come as Shadow chancellor, Oliver Letwin, has accused Labour of needing to raise taxes by £8bn so they can balance the books in the next parliament.

George Osborne, Tory MP, said the real cost of "inevitable" tax rises would be to cover up the financial deficit of between £8bn and £12bn, should Labour win the next General Election.

He added that almost every single independent observer of the economy agrees with the figures, despite continual denials from Mr Blair.

He cited the IMF, the OECD, the National Institute of Economic and Social Research, the Confederation of British Industry, the Chambers of Commerce and the Independent Institute of Fiscal Studies.

Meanwhile, Mr Howard took advantage of the tax offensive and hinted that the Prime Minister’s own party had 'form' on taxation pledges – traditionally seen as central plank of election campaigns.

He told MPs that Labour planned "what you always have done, which is to put up taxes in the first budget after a general election."

Yet the Conservative leader has run into difficulty in the past few days, after reports his own party is split as to the scope of their tax promises.

Assurances of political unity from Mr Howard have not stopped the pressure on the Tories, after John Prescott demanded full publication of the James Review, which sets out savings the party would make if elected to government.

Mr Blair said that the Treasury forecasts prove that Labour's calculations for the economy have been sound, but Mr Howard insisted the Government "must once again start to live within its means."

 

21st January 2005

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