Brown's tax cut pledge dubious, MPs told

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The government's claim that the overall tax burden would fall over the years was highly dubious, MPs were told by a think-tank yesterday.

The government's claim that the overall tax burden would fall over the years was highly dubious, MPs were told by a think-tank yesterday.

The Institute for Fiscal Studies expects the tax burden would rise as the economy grows, Andrew Dilnot, the IFS director, told the Commons Treasury Select Committee.

"Normally, you would expect the share of national income accounted for by tax to rise as the economy grows if there are no changes to the tax system. The Government is predicting a fall. It is conceivable... but I would be very surprised."

In his Pre-Budget Report (PBR) last week, the Chancellor, Gordon Brown said the share of the economy accounted for by tax would fall from 37.3 per cent this year to 36.8 per cent by 2005. He based this on a fall in revenues from North Sea oil duty and corporation tax. But Mr Dilnot said this was unlikely to be big enough to cut tax for households and businesses.

Later Michael Portillo, the Shadow Chancellor, said Mr Dilnot's evidence proved Labour was the "high tax party". He said: "The fact is that taxes will certainly rise if Labour is re-elected. That means more stealth taxes hitting hard-working families, pensioners and businesses."

He issued figures calculated by the Commons Library showing up to 59 per cent of pensioners would be "trapped" on means-tested benefits under plans announced by Mr Brown last week. Mr Portillo accused him of breaking the pledge he made in Opposition, to end means-testing for the elderly.

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