Election '97: Tories promise golden future

John Major yesterday opened the election bidding with the offer of a "golden bequest" for the voters; something that could help make Britain the best place in the world to live.

"We now have the opportunity to achieve a massive expansion in wealth and ownership, so that more families can enjoy the self-respect and independence that comes from being self-sufficient from the state," he said in a foreword to the Conservative manifesto. But with just four weeks left to polling day, the Conservative leader repeatedly warned that the voters faced a stark choice: "A choice of two futures."

There was the "rosy" option offered by the Tories - or the Labour alternative. "To load costs on business while calling it 'stakeholding'; to increase the role of the state while calling it 'the community'; to succumb to a centralised Europe while calling it 'not being isolated'; to break up our country while calling it 'devolution'. To risk this alternative would be a disaster for our country."

Mr Major told a London press conference to launch his "watershed manifesto" that it was the boldest and most far-reaching that any party had published since 1979.

The document included significant pledges on education, health, welfare, privatisation and taxation including a return to the "aim" and "target" to bring in a 20p basic rate of income tax over the five-year lifetime of a new parliament, and a widely-leaked tax bonus of up to pounds 17.50 a week for married couples where one spouse stays at home to look after a child or "others needing care".

But the Prime Minister got into difficulties, compounded by the Chancellor, Kenneth Clarke, when he went on to speak of his intention to "lighten further the burden of taxation". The manifesto itself said: "Achieving our public expenditure goals will mean we can sustain permanently low tax levels." But the Treasury's own Budget Red Book projections quite clearly spell out government plans to increase the tax burden from 36.25 per cent of national income this year by gradual stages, to 38 per cent in the year 2001-2.

Neither Mr Major nor Mr Clarke would give a specific pledge that there would be no further spread of Value Added Tax, or an increase in VAT rates, although they both said they had tax-cutting "instincts".

The Prime Minister said: "I am not anticipating that we would replace one tax reduction with another tax increase, but ... I cannot anticipate every event that may occur in the future of which I may know nothing at the moment."

He said that provided public spending was kept below the overall growth of the economy, "we have scope for overall tax reductions" and he added later: "Unless we cut taxes, the tax burden will rise."

Adding to the confusion, the Chancellor told BBC Radio 4's World at One that while the Red Book showed the tax burden rising, helping to cut the budget deficit and national debt, "insofar as the control of public spending enables us to give ourselves more scope, then we're able either to stop the tax burden rising or to move towards the tax cuts which we're entitled to point to."

Gordon Brown, the shadow Chancellor, told Labour's daily press conference: "The contrast between the Conservatives' promise that they will actually cut tax and the Red Book, saying that they will raise taxes, has got to be pointed out."

However, when he was asked whether Labour would cut the Red Book tax burden, he said: "As far as the Labour Party is concerned, we have got to inherit a situation that exists, but there are no public spending promises other than those that are properly funded that will cause or lead to tax rises."

Paddy Ashdown, the Liberal Democrat leader, said the Tory publication was "not so much a manifesto but a horror comic" and there was nothing in it about "a new honest approach to taxation and expenditure, nor is there anything to suggest that taxpayers have any more reason to trust them than before". The highly-detailed, 56-page manifesto - You can only be sure with the Conservatives - included the expected hard line on Europe, without ruling out a single currency; plans to create more specialist schools; new health service; and privatisation of parts of Royal Mail, Parcelforce, London Underground and the National Air Traffic Service.

With promises to maintain the value of child benefit and family credit, and to introduce the "people's pension" which would slash pounds 40bn off the tax bill by the middle of the next century, Mr Major said he was offering "one of the biggest transformations of the welfare state since it was founded".

t Labour's lead over the Conservatives has opened up to 27 points, according to a Mori poll in today's Times newspaper. The poll shows the opposition party on 55 per cent, 5 per cent up on a week ago. The Tories are on 28, down one, and the Liberal Democrats on 11, down three.

Key pledges in the Conservative Party manifesto

Cut public spending to less than 40 per cent of national income in the next five years.

Aim for 20 pence basic rate of income tax with a maximum of no more than 40 pence.

Extend the Project Work programme to get the jobless off benefit and back into work.

Increase spending on the National Health Service year on year.

Reduce families' tax bills by transferring the personal allowances of people at home looking after children or relatives to spouses.

Begin phasing out the State Earnings Related Pensions Scheme by providing all young employees with personal pensions.

Guarantee school standards through national targets and the publication of test results for seven, 11 and 14-year-olds.

Privatise Parcelforce and the London Underground, and introduce competition to the gas and water industries.

Raise pounds 25 billion for housing estates by encouraging tenants to transfer to housing associations or private landlords.

Resist moves towards European federal state and safeguard national interest by staying out of single currency based on fudged criteria.