Tony Blair yesterday told the Parliamentary Labour Party: "It will mean they will stop at nothing. They will think there is nothing to stop them extending VAT. Last time, they said they would not put VAT on fuel ... But they did just that."
Today, Labour will spell out that warning with a new poster campaign. The poster shows a hand breaking an egg, accompanied by the message: " Next Tory tax? pounds 10.50 a week VAT on food. Enough is enough."
The Conservatives yesterday held a press conference heralding the latest fall in unemployment, warning that if Labour were elected it would threaten the increase in employment.
But the Labour attack on tax will be as potent, given the record of the last election campaign, when John Major said he had no plans to extend VAT coverage - before extending it to domestic fuel and power bills.
Today, Labour will produce a letter from Kenneth Clarke, Chancellor of the Exchequer, in which he said last month: "I can only reaffirm that I have never promised not to extend the scope of VAT."
The Government's Commons difficulties were aggravated last night when an all- party select committee broke up without reaching a decision on the balance of power in the committee that will scrutinise the Finance Bill.
Ministers have argued that in spite of the fact that the Government has no overall majority following the death of Wirral South Tory MP, Barry Porter, it should maintain a majority in the Finance Bill committee because Wirral South counts as a Tory seat until a by-election decides otherwise. That point was not agreed by last night's meeting of the Committee of Selection, and the issue will now have to be resolved by a vote of the whole House.
As it would not be in the interests of the Ulster Unionists to back the Government in that vote, the result could be touch-and-go.
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