Election '97: Parties tussle over 'rising' tax burden

Politicians traded increasingly personal accusations about levels of taxation yesterday as an independent report claimed that the tax burden for the average household had gone up by pounds 7 per week since the last election.

The Prime Minister accused Labour of hypocrisy over the issue, while the shadow Chancellor called a press conference to claim that John Major had lied to the electorate.

At the Conservatives' morning press conference, John Major said the tax burden was "exactly the same as it was five years ago."

While there had been 22 tax rises, as Labour claimed, there had also been 25 tax cuts elsewhere, he said. The tax rises had been necessary in the early years of the Parliament because a recession would have forced spending cuts if they had not been made, he said.

"There is a degree of hypocrisy - and that is putting it quaintly - in what they have to say about tax rises. If there has been a breach of trust as they claim ... why is it that people are pounds 1100 better off?" he said.

Gordon Brown, the shadow Chancellor, said yesterday's report from the Institute of Fiscal Studies showed the tax burden had not remained the same, as Mr Major claimed.

"We now know that is a lie," he said.

"So from the party that claims to stand up for the family, families with children have been hardest hit by the changes in taxation," he added.

Mr Brown would not give a commitment that the tax burden would not rise under Labour. The party has promised to keep to the income tax plans of the current government, and its figures show that the burden will rise in the next two years.

He said the Government's own figures showed that the direct tax burden had risen from 20.2 per cent at the last election to 20.7 per cent at this election, and the typical family was paying 14.4 per cent today in indirect taxes compared to 12.5 per cent at the last election.

The IFS report said that the average tax increase was pounds 7 per week, or pounds 350 per year. While a single earner couple with no children lost pounds 10.40 a week and one with children pounds 12.70 a week, a two earner couple with no children lost pounds 11.20 and one with none lost pounds 13.70.

The Chancellor, Kenneth Clarke, said that while the Conservatives would keep pressure on public spending, Labour would be forced to put up tax.

"It is Labour which would risk higher taxes, because they are not committed to our spending numbers for more than two years, and even then their figures do not add up - there is a pounds 12bn hole in their plans," he said.

Earlier, Mr Major had hinted that the Conservatives would rather cut income tax than keep down Value Added Tax.

"We have made it clear during the last few years that our priority was direct taxation. We do so for the reason that it gives people direct choice about how to spend their money."

On Tuesday, he said he saw no reason to believe the Conservatives would have to change the rates of Value Added Tax.