Politics: Ashdown attacks `fantasy tax cuts'

The game of "fantasy tax cuts" played by Labour and the Tories at the last election was attacked by Paddy Ashdown last night.

Calling for a simplification of taxation under which people would be guaranteed the services and standards they would get for their money, the Liberal Democrat leader said in a lecture in London: "One of the characteristics of our age is the strange death of ideology in our politics.

"It's no longer true, as Mr Major tried to convince us before the last election, that `cats miaou, dogs bark and Labour puts up taxes' ... But, equally, it's no longer true that our public services are safe in Labour's hands."

Mr Ashdown said that the first Budget measures by the Chancellor, Gordon Brown, had increased taxes by pounds 36bn over the five-year lifetime of the Parliament. Those tax increases, however, had gone on petrol, tobacco, house sales, pensions and savings - which tended to hit the poorest most badly - because Labour had promised not to increase income tax.

Similarly, for spending, Labour had promised to maintain the Tories' spending limits, and patients and parents were now paying the price of that commitment in spite of the possibility that there was enough money available now for additional investment.

Urging an extension of dedicated taxation, he said specific taxes might be raised for priority spending on nursery education, reducing class sizes, and school books and equipment, but he added that taxpayers themselves should be asked to identify their priorities and preferences.

"We need a new tax settlement to go with the new constitutional settlement," he said. "The two are halves of the same project - the project of giving citizens more power, more control."

- Anthony Bevins