Tax and spending again dominate debate

Tax and spending policies again dominated the political agenda yesterday at the start of the second full week of the British …

Tax and spending policies again dominated the political agenda yesterday at the start of the second full week of the British general election campaign.

Charges of more "stealth" taxes to come and a £25 billion "black hole" in Tory spending plans filled the air as 148 business leaders claimed a second-term Labour government would pose "a significant threat" to Britain's future prosperity.

Claiming Labour could not invest in and reform public services without raising taxes, the Shadow Chancellor, Mr Michael Portillo, challenged Labour to match the Tory pledge not to raise the "ceiling" rate of National Insurance contributions.

The Conservatives said that, if Labour raised the rate, middle-income workers earning £34,000 and over would have to pay an extra £800 a year in tax.

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"If they cannot give the assurance we have given on NI contributions, people will have to conclude that they are planning to abolish the National Insurance ceiling, hitting four million people," Mr Portillo said.

Labour refused to be pinned down on the question, and the Chancellor of the Exchequer, Mr Gordon Brown, said it would be "foolish and irresponsible" to make judgments on public spending four or five years in advance. The Social Security Secretary, Mr Alastair Darling, meanwhile, attacked the Conservatives' tax and spending policies, claiming their sums did not add up.

Introducing a "mock" Tory budget, Mr Darling said Labour's intention was to focus on the irresponsibility of a Conservative government which would substantially reduce spending on public services to pay for tax cuts.

In addition to the £20 billion spending outlined in the Conservative manifesto, Mr Darling said, Labour had exposed another £3.3 billion it intended to spend to increase the strength of the Territorial Army and £1 billion to introduce a new police cadet force and recycling policies.

"We show that their sums do not add up. In fact, they have tax commitments going well beyond the £8 billion they have claimed. They have extra spending commitments, and their so called £8 billion of savings are simply not credible," Mr Darling claimed.

"The Tory budget sums do not add up. The Tory budget would take us back to boom and bust. The Tory budget would cut £20 billion from our schools, hospitals, police and other public services." While these exchanges dominated yesterday's London debate, Liberal Democrats in Wales claimed Labour had failed "the fairness test".

Their eye firmly on the Scottish Executive's decision to back the recommendations of the Sutherland Commission, the Lib Dems renewed their call for all elderly people across the United Kingdom to be given access to free long-term personal care.

Their Cardiff Central candidate, Ms Jenny Willott, declared: "Tony Blair said before the last general election that he did not want to live in a country where people were forced to sell their homes to pay for care. Labour's rejection of the Royal Commission means the debtcollector will still come calling on the frail and elderly in England and Wales."

On the day train companies were returning to near-normal timetables following the lifting of speed restrictions imposed after last year's Hatfield train crash, the Liberal Democrats leader, Mr Charles Kennedy, was campaigning on transport.

He pledged to put a "safe, reliable and affordable" public transport system at the heart of Lib Dem policy and said a Lib Dem government would establish an independent railway safety body.

Meanwhile, the Deputy Prime Minister, Mr John Prescott, was "delighted to be back in Wales" yesterday less than a week after the incident in Rhyl when he punched an egg-throwing protester.

There was no advance notice of his visit to Barry, in south Wales, where police and party managers were taking no chances of a repeat performance.

Only one member of the public was there to see the John Prescott Express bus arrive at the Seaview Labour Club where Mr Prescott described the Tories as "cowboys". He told an audience of around 40 people that apathy was Labour's biggest enemy in the election.

"Just think of what might happen if you wake up in the morning and you find that `Yorkie', William Hague, getting up there and saying `Where there is discord we will bring harmony'" he said.