Brown scores over tax 'lie peddlers'

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The Independent Online
Gordon Brown, the shadow Chancellor, claimed first blood in his battle with tax advisers yesterday as he welcomed the cancellation by the leading accountancy firm KPMG of its seminars to advise people how to avoid higher taxes under a Labour government.

Mr Brown on Tuesday branded tax advisers in general "lie peddlers" for predicting the levels at which taxes would rise. KPMG, which he did not name, was the main target of the shadow Chancellor's wrath, which was roused particularly by the firm's assumption that, where Labour had not announced a policy, the policy in the 1992 election manifesto would probably apply.

KPMG issued a statement yesterday which said that it had decided to cancel remaining seminars being held under the "pre-election tax planning" title. A spokesman said: "These seminars have become something of a political football, but we are apolitical and we have to maintain that. We will continue to give appropriate advice to clients who seek it, but not in the public forum of seminars."

But the shadow Chancellor was undermined by a survey of 51 Labour general election candidates which found that 50 of them favoured a new top rate of income tax on annual income over pounds 60,000. A similar overwhelming majority believed that a Labour government should scrap the Trident nuclear missile system, which last year's party conference voted to keep.

Paddy Ashdown, the Liberal Democrat leader, kept up the pressure on Mr Brown's refusal to specify tax rates and levels. He said: "The Tories lied to us last time. Labour seems to be preparing to lie to us next time."

Mr Ashdown accused Labour of being "so scared of their past tax record" that they were "caught like frightened rabbits in the headlights of the Tories' attacks. They refuse to say how they will pay for their promises. They refuse to commit themselves to anything".

He told a rally in Twickenham, south-west London, last night: "Without more truth on tax, we'll never restore trust in politics."

Liberal Democrat officials said their policy was to put the standard rate of income tax back up from 24p to 25p in the pound "if necessary", to increase spending on education. They also would impose a new 50p top rate on incomes over pounds 100,000 a year, and use the pounds 1bn revenue to raise the level at which people started to pay national insurance contributions and tax - taking 750,000 low-paid people out of paying taxes and NI contributions altogether.

A Liberal Democrat source close to Mr Ashdown said: "Ours is probably the tax policy Labour would like, but they won't say so."

At the last general election, Labour and Liberal Democrat tax policies were similar, with the parties only disagreeing on the level at which a new 50p top rate of income tax would come in: the former said pounds 40,000 a year, the latter said pounds 50,000. Both wanted to abolish the limit on NI contributions, which meant that those on over pounds 22,000 a year would pay more.

Since then, Mr Brown has scrapped all Labour's tax commitments and, in the vote on the 1p cut in the standard rate of income tax in last year's Budget, Labour officially abstained, while the Liberal Democrats and 10 Labour rebels voted against.