Blair denies claims of tax by stealth

QUESTION TIME

WILLIAM HAGUE accused the Prime Minister of imposing stealth taxes on business yesterday, dismissing Tony Blair's pledge that taxes had been reduced as "complete and utter rubbish".

The Tory leader used the last question time before the Budget next Tuesday, to argue that Labour had increased taxes on business by pounds 5bn-a-year.

During noisy exchanges, Mr Blair rebutted Mr Hague's claims, stressing that the tax burden would rise by less than the level the Tories predicted in their last Budget.

"The CBI has welcomed our reform of tax and if you are talking about the reform of tax credits, of course that will yield from the next couple of years onwards a pounds 4bn tax cut for business. I assume it is your policy to reverse that policy now."

While it was true that the overall tax take was to increase between 1997 and 2002, the Government had public spending under control, he added.

Mr Hague said that while Mr Blair claimed business taxes had gone down, a "fact" that they had gone up.

The main elements of the stealth tax were the introduction of a quarterly payment system for corporation tax, abolition of dividend tax credits, increased road fuel duties, increases in stamp duty and the windfall tax on the privatised utilities.

"Before we start debate on this year's Budget, is it not time that we started to tell the truth about last year's," Mr Hague said.

Replying, Mr Blair pointed to measures such as the Working Families Tax Credit, Child Care Benefit and a cut in National Insurance which would leave many families better off.

The Prime Minister warned Mr Hague he was in danger of acting like a hypocrite if he attacked rises in petrol duty. It was the Conservatives who introduced the "petrol duty fuel escalator", he said.

He said: "Let me read what the former Chancellor of the Exchequer, Kenneth Clarke, - if it's not out of order to quote him to Conservatives any more - said when he put in the escalator.

"He said: `Any critic of the Tory Government's tax plans who also claims to support the international agreement to curb carbon dioxide emissions will be sailing dangerously near to hypocrisy'."

t The row over the "real scandal" behind waiting list figures intensified during question time when Mr Hague claimed that the number of people waiting to get on an official hospital waiting list had doubled in the last two years. He claimed there were now nearly half a million people waiting for hospital appointments.

But Mr Blair replied waiting lists were being brought down after years of increases and the latest figures showed more outpatients were being treated.

Frank Dobson, the Health Secretary, said earlier this week that the number of people waiting for treatment in England fell by 14,200 in January.