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Portillo: Families will be better off under the Conservatives

At a press conference at Conservative Central Office, Rt Hon Michael Portillo, Shadow Chancellor:

"Labour Governments always put up taxes. This Labour Government was supposed to be different. Four years ago, Labour campaigned on a manifesto that said 'New Labour is not about high taxes on ordinary families'. Even Tony Blair couldn't bring himself to write the same sentence in Labour's manifesto this time around.

"Smugly, Labour assume it is morally superior for Government to take increasing amounts of money away from the people who have earned it and who want to spend it on their families, even when they divert it instead to abysses of state bureaucracies.

"This Labour Government has spent four years driving up taxes by stealth. Give them the chance and we would get more of the same. Gordon Brown's taxes are making life hard for millions of people.

"Under the Conservatives, hard-working families will get to keep more of their own money. We will deliver a much-needed tax break for Britain - for hard-working families, pensioners and businesses.

"Previous Labour Chancellors boasted of taxing the rich. Mr Brown has targeted the less well off. The poorest fifth of households are now paying the highest proportion of their income in tax since records began.

"Since 1997 the tax burden on the least well off has risen from 37 per cent to more than 41 per cent of their income. The taxes paid by the poorest households have increased more sharply than those paid by any other income group. Labour has made life harder for people who have very little.

"This election will mean a lot for people struggling to get by on tight budgets that they can't stretch any further. A Conservative victory on June 7 will mean that they pay less tax. We will abolish taxes on savings and dividends. We will cut taxes for families with children under 5 by £200 a year. We will introduce a new married couple's allowance and make widows' allowances tax-free. We will take 1 million pensioners out of tax altogether and cut the tax bill of many more. And we will cut the tax on fuel by 6p a litre. We can cut taxes because we have identified £8 billion of specific savings compared to Labour's spending plans.

"In their analysis of our tax plans, the independent Institute for Fiscal Studies have shown that Conservative tax proposals will reduce the tax that many hard-working families pay by £12 a week. And they say the average pensioner couple will be nearly £9 a week better off.

"The IFS say of Conservative tax cuts: 'Pensioners also do well on average due to the increases in their income tax allowances, the savings tax cuts, and the increases in the state pension for the over 75s. Couples without children all do fairly well on average from these reforms [our tax cuts], with increases of between £4.24 and £6.23 per week. These gains are larger than anything seen for these groups under Labour since 1997'.

"Conservatives believe in lower taxes. We understand that there is no such thing as Government money, only people's money.

"The figures given by the Institute for Fiscal Studies are averages, produced by an economic model. For many people, the gains will be bigger. I will give just four realistic examples of families who will be better off under the Conservatives.

"First, a married couple with a three-year-old child. The husband works, earning £25,000 a year and his wife has chosen not to work. They drive 10,100 miles a year in their Ford Mondeo. They have £10,000 in building society account paying an interest rate of 6%. Under the Conservatives this family would save on petrol, on the children's tax credit and from our married couple's allowance and plan to abolish taxes on savings. All in all, they will gain £1,409.61 a year.

"A single pensioner, with an income of £9,500 a year from his state and occupational pensions, who drives 2,600 miles a year (the average mileage for a pensioner). He has £18,000 of savings to last the rest of his life, placed in a high interest account with the local building society. This pensioner would pay £679.66 a year less tax under the Conservatives.

"Or take a widow with a 12-year-old child. She earns £7,000 a year and has a £30,000 life assurance payment in a building society account paying interest at 6 per cent. She drives 3,250 miles a year. She would pay £1,390.58 a year less tax.

"Or take a couple with two children aged thirteen and nine. The husband earns £27,000 a year and the wife works part-time, earning £3,000 a year. They drive 10,100 miles a year. They have £5,000 in a building society account paying interest at 6 per cent. This family would gain £489.61 a year.

"There is a better way than Labour's dependency society, where people are penalised for trying to look after themselves and their families. It is a better way that people will be offered if they vote Conservative on June 7.

"We will reduce state interference and allow people to take more responsibility for their lives; and unlike Labour we won't punish them when they do so. We will let people keep more of their own money because we never forget that it isn't the government's money, it is the people's money."

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