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Portillo: A fortnight's more taxes under Labour

The Shadow Chancellor, Michael Portillo, attacked Labour for raising taxes by stealth over the past four years. Speaking in Hornchurch:

"This weekend is a Bank Holiday weekend. But life's no holiday under Labour. The New Labour way of life is that people should pay more and more in tax and get less and less in return.

"Labour's Chancellor of the Exchequer likes to talk of his belief in the work ethic. He has a work ethic, all right. His work ethic is that people should have to work longer and harder just to pay their taxes; that they should work longer and harder not for themselves and their families, but for the Government. The toil is the people's and the reward is Gordon Brown's.

"This was not how it was supposed to be. Back in 1997, Labour's manifesto said this Labour Government would be different. 'New Labour,' the manifesto said 'is not about high taxes on ordinary families'. I don't know who Labour thinks has been paying the 45 stealth taxes that we've seen since 1997 - who Labour thinks has been paying the taxes on marriage and mortgages and pensions and petrol.

"Mr Blair has the audacity to claim that ditching the pound would be an act of patriotism. But even he wouldn't dare put a sentence about taxes and ordinary families in to his manifesto this time around.

"Under Labour, the tax burden is up by £28 billion. That's equivalent to 10p on the basic rate of income tax. And it's the poorest that have been hit hardest. The sharpest increase in taxation under Labour has fallen on the 20 per cent of households with the lowest incomes. They now see a larger share of their income going in tax than ever before.

"Today is 27th May. In 1997, 27th May was Tax Freedom Day - the day when people finish working to pay their taxes and start working for themselves and their families.

"This year Tax Freedom Day has been put back until June. When you consider the share of your money that the Government takes in tax, it is as if you work only for the Government until 10th June. Only after that is the money you earn yours to keep.

"So under Labour you face a whole fortnight more of paying tax. A fortnight more for the Government; a fortnight less for yourself.

"In 1997, 27th May was Tax Freedom Day. Under Labour, it has become Stealth Tax Day - a day when people face another two weeks working just to pay taxes to the Labour Government.

"The belief in high taxes is central to New Labour. Conservatives think differently. There is no such thing as Government money, only people's money.

"People probably expected Labour to break its promises and raise tax; but they also expected it to improve their local schools and hospitals and to protect them from crime. Labour has let them down. When the Government spends £12,000 every second, people know that too much money is being wasted. Government has no right to adopt a morally superior tone when it takes money from hard-working people who would have spent it on their families, and instead commits it to the abysses of the state's bureaucracies.

"Conservatives have put forward a carefully costed programme which will allow us to deliver £8 billion of tax cuts.

"We will abolish taxes on savings. We will let pensioners keep an extra £2,000 of their income tax-free. We will introduce a new married couple's allowance worth up to £1,000 a year for families with children under eleven. And we will cut 27p a gallon from the most hated and most regressive Labour stealth tax - the tax on fuel.

"A Conservative Government will cut taxes. A Labour Government would go on putting taxes up. We think Government spending should grow within the average growth rate of the economy. Labour calls that policy 'extreme'.

"The only alternative - Labour's alternative - is for Government to go on spending taxpayers' money faster than people can earn it. That is why, under Labour, taxes would have to keep on going up.

"In fact, for Labour to increase Government spending at the present rate throughout the next Parliament, they would need to raise £10 billion of extra taxes. In this Parliament, the tax on petrol has been Labour's favourite stealth tax. If £10 billion were to be raised through further increases in petrol tax, the price would have to rise to £6 a gallon.

"Tony Blair says he's a "straightforward kind of guy". Let him be straightforward about the stealth taxes he would be use to raise the £10 billion that he needs.

"Whenever anyone asks Labour whether the £10 billion will come from this tax or that tax, Gordon Brown says that no responsible Chancellor could give specific assurances on each and every tax. He says we can't know what unexpected events could arise. But that's not the point. The question isn't about unexpected tax increases. The question arises because we know that Labour's spending plans require higher taxes and that Conservative spending plans allow lower taxes.

"Last week, we rumbled Gordon Brown's wheeze of a stealth tax on middle-income earners. On Monday, he refused to rule out raising the National Insurance ceiling, a stealth tax that would hit four million people including thousands of police officers, deputy head teachers and senior nurses. On Tuesday morning, he refused to rule out abolishing the ceiling altogether - a move that would amount to a 50 per cent top rate of income tax in all but name. Labour's promise on the top rate of tax looked to have been broken before polling day.

"Later that day, the Chancellor said there would be no 50 per cent rate of tax - but left it typically unclear as to what he meant. He has committed himself not to raise the standard or higher rate of income tax. The pledge is meaningless unless he follows through with a pledge on National Insurance Contributions. So my challenge to Mr Brown is this. If he meant to say he would not abolish the National Insurance ceiling, let him say so.

"If he will rule out raising the ceiling so high that he creates a 50 per cent rate of income tax, does he still refuse to rule out a smaller increase? If so, he will be announcing that he is prepared to raise the limit from just under £30,000 to just under £34,000. That is a stealth tax on four million people, costing them up to £400 a year.

"One way or another, Labour would need to raise £10 billion of taxes. We know there would be National Insurance increases. We expect that petrol tax would go up again. One way or another, there would be more taxes from Labour, leaving less money for the people. Let them now say which taxes they plan to raise."

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