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Hague: Labour's new stealth tax – income tax at 50%

In a speech to a Conservative Party rally in Plymouth, the Rt Hon William Hague, Leader of the Opposition:

"Two weeks into this election campaign, I keep having to remind myself that there is meant to be a third party: one that still officially calls itself an Opposition. But when is the last time you heard the Liberal Democrats seriously opposing this Government?

"At what stage does a party cease to be an Opposition and become a branch of the Government? If you support Labour's policies, if you vote together, if you are represented formally in Cabinet, if your leader stands up every Wednesday in the House of Commons only to drop to his knees before Tony Blair, then in what sense are you still an Opposition?

"Look at any area of policy, and the Lib-Dem approach is always the same: take whatever Labour is doing, and then go further.

"Under Labour taxes are rising rapidly; but the Lib-Dems want to go further, raising basic income tax, introducing a new top rate tax band and calling for new local and regional income taxes.

"Labour want to join the euro two years from now; the Lib-Dems wanted to join two years ago.

"Labour say that they would like to have reformed the Common Fisheries Policy, but that other EU states would not support them; the Lib-Dems actually support the CFP in principle.

"Labour want to break England up into artificial regions; the Lib-Dems want to give these regions real power, smashing up our country and handing the pieces to Brussels.

"Labour have let 35,000 prisoners out of gaol early; the Lib-Dems want to scrap mandatory sentences altogether, which would mean shorter prison terms for even the most dangerous criminals: repeat armed robbers, rapists, muggers and murderers.

"Labour have clobbered drivers by putting up the price of petrol; the Lib-Dems want to clobber them again with new taxes to drive and park in town centres.

"Labour have turned Britain into a soft touch for those who want to abuse our asylum system; the Lib-Dems want to go further, restoring social security benefits to asylum seekers and making this country an even more obvious soft touch.

"Labour are taking us stealthily into a European Army; the Lib-Dems want to do it openly.

"So now we know what the Lib-Dems mean by "constructive opposition". They mean reacting to every Labour policy by saying: "If you insist - but why not go even further?"

"We all know why they do it, of course. They're convinced that, if they grovel for long enough, Labour is bound to take pity on them and introduce proportional representation.

"Well, perhaps I've missed something, but if people in the South West really do see electoral reform as a huge issue, they're keeping pretty quiet about it.

……

"Labour need to raise £10 billion in new taxes to pay for their spending plans. This morning Gordon Brown refused to rule out scrapping the National Insurance ceiling altogether. Four million people are now faced with the prospect of effectively paying income tax at 50%.

"40,000 teachers, 20,000 police officers, more than 70,000 doctors and nurses all taxed at 50% of their income. This courtesy of the self-styled party of public services.

"At the last Election, Labour said that this Stealth Tax on middle income earners was 'dead and buried'. Today it is alive and kicking.

"In 1997, Labour broke their tax promise within months of the Election. This time their key pledge on income tax hasn't even lasted a week.

"On tax as on everything else, you cannot believe a word they say.

……

"And I will not give up on pensioners. Labour have got a nerve to call themselves the party of pensioners. They have spent the last four years belittling and marginalizing the older generation in their rush to embrace pop-stars, celebrities and all things modern.

"First they insulted pensioners with the 75p increase.

"Then they called them 'racist' and said there was 'no mileage' to be had from listening to their concerns.

"Now they plan to sweep up more than half of all pensioners into depending on means-tested benefits and all the worry and confusion that comes with them.

"Well, I will not brush aside those who have done so much to build the country we live in today, the people of my parents' generation.

"They are men and women who have spent a lifetime supporting and helping others.

"They are people whose hopes and fears and common sense instincts are as deeply felt and as worthy of respect as anyone else's.

"They have the right to expect some dignity, comfort and independence in retirement.

"That is what the next Conservative Government will give them. Today we have launched our manifesto for pensioners.

"We will take a million pensioners out of income tax altogether and reduce taxes for millions more.

"We will abolish taxes on savings and on dividends for all lower and basic rate taxpayers.

"We will keep the Winter Fuel Allowance, the free TV licences and the Christmas Bonus and make them more widely available by giving the cash equivalent, tax-free, to those in care homes, those living abroad and people over 75 without a TV.

"We will raise the basic pension for everyone and give extra help to those aged over 75. From April 2002 this will be worth an extra £3 a week for single pensioners and £4.80 for a married couple, an extra £4 a week and £6.80 for the over 75s.

"Pensioners will be better off under the Conservatives, because their concerns are the concerns of us all.

"They want more police on our streets spending more of their time catching criminals, so do we.

"They want a Health Service which treats people according to how sick they not how old they are, so do we.

"They want to keep the Pound, so do we.

"And they want to keep Britain's independence, the Britain they worked so hard to create. So do we.

"People often say to me: "Yes, I want to keep the pound. But it's all inevitable isn't it? We're going to be dragged into the euro one way or another."

"No, it's not inevitable. It's up to you. You can vote Labour or Liberal and see the pound abolished. Or you can vote Conservative to keep the pound.

"And make no mistake: this is not a question for two years' time; it's a question for two weeks' time. Because if Labour and their Liberal allies win on 7 June, they will begin taking us into the euro on 8 June. Businesses would have to convert their tills, change their accounting systems, retrain their staff. The public services would have to devote precious resources to preparing for the changeover. Indeed they have already started. And, of course, Britain would have to rejoin the Exchange Rate Mechanism before joining the Euro.

"So this is not just a decision about whether we keep the pound. It is a decision about the whole management of our economy. On 8 June, we will either have a Labour Government that is directing our economy with a view to joining the euro, or a Conservative Government that has British growth, British jobs and British prosperity as its overriding priority.

"That is the choice we face. And we have two weeks to make it, not two years.

"I know that there are many people who may never have voted Conservative before, but who want to keep the pound. And I am appealing to those people tonight. Lend us your vote this time, so that your vote will still mean something next time, and the time after, and the time after that. Lend us your vote, so that we will carry on having meaningful general elections in an independent Britain."

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