Speeches recovered from the Conservative party’s online archive More…

Hague: Labour's plans for higher taxes

Speaking at Conservative Central Office, the Rt Hon William Hague, Leader of the Conservative Party:

"We have exposed Labour's plan to tax Britain's middle classes more.

No-one can now underestimate the scale of the tax increase that, if re-elected, Labour plans to impose on people like senior nurses, police officers, teachers, doctors and company managers.

On Monday, Gordon Brown refused to contradict the report that he is planning to raise the national insurance ceiling by more than inflation.

Yesterday he refused even to rule out getting rid of the ceiling altogether. That must mean that he is planning, in effect, to bring in a higher tax rate of 50 per cent for anyone earning over £29,900 a year.

There's only one word to describe Labour's manifesto commitment not to increase income tax rates: it's a con.

They want a higher tax rate of 50 per cent, which means you'll pay £500 a year more tax if you earn £35,000 a year and over £1,000 more if you're on £40,000.

No wonder Gordon Brown wants to keep the figures quiet.

Last time, it was his old boss John Smith who tried to bring the tax increase in.

Gordon Brown told a friend at the time "John's making a mistake, he shouldn't be giving any figures away at all."

He's learned the lesson: keep mum.

It's time to be honest, Gordon. We know that you're planning to raise the national insurance ceiling. So give it straight to the doctors, nurses, teachers and police officers who will have to pay the tax.

And if Gordon Brown won't do it, Tony Blair should now show some leadership on this issue. He should today instruct his Chancellor explicitly to rule out abolishing the National Insurance ceiling.

But the tax rises won't stop there.

It's not just Gordon Brown's national insurance plan that is going to increase taxes on hard-working people in Britain.

We have obtained a leaked copy of a plan that is being approved in Brussels as we speak.

What it contains removes any remaining doubt that the EU plans to take away Britain's powers to decide its own tax rates.

The documents spells out steps to be taken to 'harmonise' income tax and VAT across Europe.

And, of course, for Brussels, harmonious taxation is higher taxation.

The document talks of the necessity of co-ordinating national income tax systems.

On indirect taxes like VAT it says "a high degree of harmonisation is necessary"

That means extending VAT to items like food, books and children's clothes that are zero-rated in Britain, but taxed on the continent.

And if the rate of VAT, as well as its coverage is harmonised, it means a 25 per cent rate of VAT.

So a school uniform that costs £69 in Britain today would cost over £17 more under these plans.

It confirms that the EU intends to standardise tax on petrol and diesel - and, again, you can be sure that petrol tax won't be coming down. Rather, Labour's draconian increases in fuel tax will be locked in and we will never again be free to bring them down.

It makes the case for corporate taxes to be harmonised.

Tony Blair said that he is opposed to tax harmonisation.

He talks tough in public, but behind closed doors in Brussels he throws in our hand.

The Committee that has produced this plan is even chaired by a Labour Treasury minister, Dawn Primorolo.

And it is clear that Britain's veto will not be an obstacle to these plans. Page 9 of the document contains the extraordinary admission that the EU would take steps to bypass the national veto if we ever threatened to use it.

Giving up to Brussels Britain's ability to set our own taxes is part one of Labour's two stage policy of transferring the management of the British economy to Brussels.

If re-elected, they would take Britain into the Euro, and so give up control of monetary policy to the European Central Bank.

That means interest rates would no longer be set in Britain, according to economic conditions prevailing in Britain. We would be forced to accept a one-size-fits-all interest rate covering every member state. An interest rate that would be bound to be wrong for most places, most of the time.

It would be a grave error, for which the British economy would pay the price.

At this election, the alternatives are now very clear.

A Labour Party that would ride an endless escalator of spending and taxing by stealth, and that would give to Europe the power to raise taxes still further.

And a Conservative Party that will cut taxes and make sure that decisions on our economy are taken in Britain, not Brussels."

Keyboard shortcuts

j previous speech k next speech