Duncan Smith stands firm on tax as Lib Dems gain in polls

Iain Duncan Smith refused to back down on his pledge to cut taxes last night as a fresh opinion poll showed the Tories almost neck and neck with Labour on the economy.

The Conservative leader said low taxation on business would lead to a healthier economy and ultimately better public services such as education, transport and health care.

He also suggested the NHS and other services were so bad under Labour that many Britons were now tempted to live abroad.

Mr Duncan Smith's remarks came as a YouGov poll showed 32 per cent of voters said they would trust Labour to handle the economy better in troubled times, compared with 31 per cent for the Conservatives. The poll also showed the Liberal Democrats rather than the Tories had benefited most from the Government's troubles.

General election voting intention put Labour on 36 per cent (down three points since December), Tories on 32 per cent (unchanged) and the Liberal Democrats on 24 per cent (up three).

In his speech to businessmen in Leeds, Mr Duncan Smith said he was proud to be British but "no longer proud" of the NHS, education, police and justice systems.

He pointed to an opinion survey last year claiming that 50 per cent of Britons wanted to live abroad in countries such as Australia. "People stay, not because they have a great life, but because it's 'OK'. They're making do and they are expected to continue making do," he said. "Time was, not so long ago, when we claimed to have a National Health Service which provided the finest health care in the world. We had some of the finest universities ... our police made sure our homes were secure and our streets were safe. We no longer pretend that things are better here than anywhere else."

Mr Duncan Smith said the Government was imposing record levels of tax on the public while failing to improve public services. "This might be at least partly worth it if our higher taxes produced better service for us. But do we have the same standards of health care as the French? Does our education system rival those of other European countries? Are our streets safer than those of continental Europe or even New York? 'No' on all counts," he said.

He said it was time to abandon polices "rooted in a post-war consensus that has become worn out".

The Tory leader said he was "howled down" for backing lower taxes. "It is possible to have both lower taxes and better public services," he said.