Brown rules out income tax rises to pay for health service

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Gordon Brown ruled out raising income tax to improve the health service yesterday, but left open the possibility of higher indirect taxation or even a special tax.

The Chancellor's promise to stick by Labour's election tax pledge came after Tony Blair dampened expectations over investment on the NHS.

Stepping back from his promise to bring spending on health up to the European average, the Prime Minister said this was a target only "in broad terms". Number 10 said ministers would not be "pinned down" to a figure before next year's spending round.

Mr Brown, who had opposed the introduction of a ring-fenced tax, said he was now "open-minded" about linking a tax rise to improvements in the health service. But he said he would stand by his pledge in June not to put up the basic or higher rate of income tax.

He told the BBC's Breakfast with Frost programme that the Government would also abide by its promise not to extend the scope of VAT, but refused to be drawn on whether it would raise the ceiling for national insurance contributions. "I made my pledges on the election in income tax and VAT. I made it absolutely clear that no Chancellor going into Budgets will make specific pledges on other issues," he said.

Writing in The Independent today, Chris Powell, chairman of the Institute for Public Policy Research, calls on Mr Blair to consider French-style social insurance as part of the review of the NHS. "Over 20 years we could well see a doubling of the cost of what people require out of health. I defy anyone to raise that in the black hole of tax."

Liam Fox, the Tory health spokesman, told On the Record it would be "foolish" not to consider asking people to pay more for their health care.