Labour refuses to budge on tax despite latest Fine Gael pledge

The Labour Party has kept open the possibility of increasing capital gains tax when in government, despite Fine Gael's move to rule out any tax increases if it wins the next general election.

Refusing to be drawn on Fine Gael's no-increase promise, made during its conference at the weekend, a Labour spokesman said nothing had changed since last month when his party leader Pat Rabbitte indicated he would look at capital gains tax closer to an election and make a decision "depending on the circumstances at the time".

Interviewed on TV3's The Political Party on Sunday night, Fine Gael leader Enda Kenny said that differences on tax policy between the potential coalition partners would be "all right on the night".

But despite what Mr Richard Bruton called Fine Gael's "crystal clear" stance on tax, Labour was sticking to its position yesterday that it would not publish detailed policies in the area until much nearer an election.

The spokesman said that while they would take certain joint policy positions, Labour and Fine Gael were separate parties with different platforms. "As the Tánaiste said last Friday [speaking about differences in Government over the Ferns report], we're two different parties with different perspectives, but that doesn't mean we can't work together in Government."

At a parliamentary party meeting in Clonmel in September, Mr Rabbitte dismissed as "overexcited bleatings" demands that Fine Gael and Labour publish their programme for government. He said Labour's position on taxation "will not be addressed by us publicly until battle is joined in a general election campaign, or shortly before it".

Mr Rabbitte ruled out increases in personal or corporation tax, however, pointing out that the 12.5 per cent corporation tax rate had been fixed by the Fine Gael-Labour coalition in 1997. Yesterday, his spokesman said that while keeping the issue of an increase in capital gains tax open, suggestions that Labour would return to a 40 per cent rate were "nonsense".

At Fine Gael's conference in Millstreet, Co Cork, Mr Bruton said: "We have enough taxes. We see no case for increasing personal, corporate or capital taxation. Far from it. What this country needs is to give back to the taxpayer real value for the huge sums of money that their sweat has yielded to the Exchequer in recent years."