Howard insists on Labour tax rises

National Insurance contributions will be raised under a third term of Labour government, Michael Howard has claimed.

Speaking at Prime Minister's Questions, the Tory leader said it was no good for Mr Blair to stick to his 'wait and see' approach on tax, because he had already made pledges on top rate tax earlier in the week.

Mr Howard was referring to the PM's meeting with the Commons liaison committee on Tuesday, when senior MPs were told that top rate tax rises were not a post-election possibility.

Although Mr Blair did not universally stamp out hiking the highest band of tax, he did make it clear that he was "not in favour" of the move, despite allegations from Downing Street aide, Peter Hyman.

Now Mr Howard, mindful of the expected General Election on May 5, has rallied his party to accuse the Labour government of overspending cash from the public purse.

He accused ministers of throwing away money on unsuccessful schemes such as trying to curb bad behaviour and truancy as well as fledgling efforts on asylum schemes.

The Conservative leader recalled the £11bn hole in the Government's finances, which the party has been pushing towards Labour with the backing of the Institute of Fiscal Studies and other four other economist think tanks.

As a result, Mr Howard claimed there was no need to wait for Labour's manifesto to work out whether tax rises were imminent.

Pointing at the issue of National Insurance, he said: "Everyone knows tax will go up under Labour: Isn't it now clear which tax it would be?"

Mr Blair chose to respond by directing Mr Howard towards Labour's economic record on spending by pointing out how the government had used a strong economy to invest in front line services.

Facing further questions, the PM refused to be drawn into the business of tax pledges, saying that the forthcoming Labour manifesto would settle the opposition's interest in their tax commitments.

The debate between the two main party leaders also heard a passionate exchange on the issue of asylum, which appears to have cemented itself as a central plank in the election run-up, as the parties continue to find fault with each other's proposal.

In one exchange, Mr Blair said he denounced the Tory plan of using a sort of "Fantasy Island" to process asylum applications overseas, and demanded to know which countries the Conservatives wanted to use.

Meanwhile, Mr Howard produced a document from the European Council of ministers, which he said explicitly revealed Labour's own plan for tackling asylum applications abroad.

The PM hit back - reminding the Tories that not only did he publicly disclose the plan - but conceded it a failed idea, once it emerged that no countries would be interested in the proposal.


11th February 2005

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