Budget 1999: Opposition Reaction - Hague says taxes forced up by stealth

WILLIAM HAGUE, in his response to the Budget, accused Gordon Brown of being the "pickpocket Chancellor", claiming he was forcing up taxes by stealth.

While Mr Brown had distributed a "few little goodies", he had already levied additional taxes of pounds 1,500 for every taxpayer in the country in the current year.

Opening the Budget debate, Mr Hague attacked the Chancellor for "persecuting motorists" and having failed to mention the decline in the savings ratio altogether.

"He is the pickpocket Chancellor, who shakes your hand with a smile after he has stealthily removed your wallet."

While Mr Hague welcomed measures such as the reduction in the standard rate of income tax, he said Mr Brown had passed over "more quickly" the scrapping of the 20p tax band.

He told the Chancellor: "You didn't say the total tax burden as a result of your cumulative decisions is going to rise next year.

"You didn't say what is the truth, that, as a result of your decision in three budgets, this is the third year running in which we will have higher taxes because of the decisions of this Government.

"It would not have been apparent from your speech that you have already announced in previous budgets tax increases for the coming year which add up to pounds 7.2bn.

"Taxes on pension funds of pounds 5.4bn, earlier decisions on the married couple's allowance of pounds 1bn, increases in petrol duty of pounds 1.4bn."

The tax burden had been raised by pounds 6bn in Mr Brown's first year as Chancellor and pounds 7.9bn in his second.

Mr Hague scorned the Chancellor's claim that the Budget was good for families, saying: "It is good for families who don't have a mortgage, who aren't married, who don't run a car, who don't smoke, who don't save for a pension.

"For a family like that it's fine! There may even be a family like that somewhere in the country. Sounds suspiciously like you, to me!"

Mr Hague said any "seemingly nondescript sentence" within today's Budget could mean "a clobbering for people anywhere in the country.

"You are not only an expert on stealth taxes, you are an expert on giving a stealth speech. As we already know, this is a government that says one thing and does another, that takes a pound and gives a few pennies back, that cannot be trusted to be straight, even on Budget Day."

Behind the statistics of an economic slowdown, there were families under pressure, businesses struggling in a manufacturing sector, which were further hit by the Chancellor's announcements.

While Mr Hague welcomed reduced tax rates for cars with low-emission engines, he attacked petrol-duty increases, adding: "The Government have taken their persecution of the motorist too far and their damage to the haulage industry too far."

He went on: "Few people will be aware that after today's budget about 85 per cent of the price of petrol will be in tax."

Accusing the Chancellor of "missing opportunities" in the Budget, the Tory leader told Mr Brown his attempts to increase taxes by stealth would be uncovered by people in the "real world. You should have been attacking the forest of regulation that is strangling business, but you didn't.

"You should have given a clear signal that the tax system will support marriage, but you didn't. You should have cut fuel costs for the road- haulage industry, but you didn't.

"Instead of raising taxes by stealth you should have started to introduce some honesty into the tax system, but you didn't. You should have tackled the runaway welfare spending, but you didn't. You should have set out a programme to lower the tax burden but he is continuing to increase the tax burden on all of those issues. You had the opportunity to act and you have failed to do so," Mr Hague said.

His concerns were echoed by Paddy Ashdown, the Liberal Democrat leader, who said the Chancellor could have done "big things" in the Budget but had decided instead "to follow a scatter-gun approach and do a number of smaller things". Mr Brown had mounted a "selective smash-and-grab raid" on Liberal Democrat ideas, but the Budget did less than it could have done to tackle poverty. Over this Parliament the Government would have invested less in health and education than the Tories originally intended, he added. "If I sound ... grumpy it is because I frankly admit it is extremely frustrating to hear someone else singing snatches of our song but doing it so completely out of tune."

Derek Foster, Labour MP for Bishop Auckland, said he would be "torn to pieces" by his mainly rural constituents over the increase in petrol taxes. Accusing the Government of neglecting the rural areas, he told Mr Brown: "It is the working poor that I care about. The rich in the rural areas can care about themselves. You cannot make work pay if you price the working poor out of their car, because we do not have buses, we do not have trains. All they have got to get to work is their cars ... we are not making work pay; we are doing the opposite."