Blair rejects top rate tax rises

Tony Blair has ruled out hiking the top rate of tax for the nation's highest earners just days after a member of his inner circle suggested it was a post-election possibility.

Peter Hyman, who was the Prime Minister's speech writer and head of strategic communications at Downing Street, claimed that discussion had taken place as to the scope of top rate tax rises.

He said such increments for the wealthy were an essential move if the Government was committed to alleviating the tax burden on people with low incomes.

Extra revenue from tax rises could also be invested in front line public services, such as education.

But in a meeting with senior MPs, Mr Blair explicitly rejected the claim and appeared unaware his former aide had indicated such a tax rise.

"Did he now? Just give me five minutes. I'll go and sort him out," joked the PM to a panel of laughing MPs.

"I am not in favour of raising the top rate tax," he told the Commons liaison Committee, adding that the widening gap between rich and poor was often "misleading."

According to the DT, MPs questioning Mr Blair, including the chairmen which monitor government departments, tried to force the PM into answering further questions on tax reform.

When pushed on the issue of inheritance tax for example, seen as a burden for low-income families who have suffered due to rising house prices, he said that the answer was best-left to Chancellor Brown.

Instead of revealing any further tax plans, the PM chose to reinforce the Labour record of achievement.

"Let us be clear. There have been hundreds of thousands of children and almost 2m pensioners lifted out of acute hardship, there are people benefiting from the working families tax credit and from the minimum wage," he said.

Yet some senior MPs were clearly more interested in the PM's personal attributes, such as his ability to avoid direct questions and the efforts of the Blair household to combat global warming.

"If you'll forgive me I don't think I'll get into my family and what they're doing on global warming," replied Mr Blair to Robert Key, MP for Salisbury.

The subject of climate change was preceded by a comment from Edward Leigh, chairman of the Public Accounts Committee, who remarked on the Prime Minister's unique way of tackling closed questions.

He told Mr Blair: "You're very good at answering what I wasn't asking about," mused the MP for Gainsborough.

Meanwhile, the PM added that he felt confident and "reasonably optimistic" about economic growth of the country, adding that he did not believe Gordon Brown was about to break his "golden rule" on spending.

Other issues debated include the withdrawal of British troops and the handover of control in Iraq, which Mr Blair said he wanted to implement as soon as the security situation allows.

 

10th February 2005

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