Meacher finds room for tax increases

Labour sources last night moved to squash suggestions by a member of the shadow cabinet that the party could raise tax rates if it came to power.

Michael Meacher, the shadow minister for environmental protection, had said in an interview with the New Statesman magazine that there was still flexibility despite a pledge not to raise income taxes.

Gordon Brown, the shadow chancellor, said last week that a Labour government would freeze public spending targets for two years and would keep levels of income tax as they are at present.

But Mr Meacher said Labour would find itself under pressure to be fair to all sections of society. "Gordon Brown was talking about income tax. He was very careful to exclude other forms of tax. There's capital gains tax, inheritance tax and all the allowances and the share options schemes. So it isn't quite as bleak as it seems," he said.

"Gordon has made the position fairly clear on the rate. Clearly there are something like 200 different allowances and he is not going to go through them all setting them now before coming into government," he added.

Last night a spokesman for Mr Brown dismissed the remarks. "Gordon Brown made it clear in a speech last week that he would not be raising rates of income tax and that we had no public spending plans that meant we needed to raise taxes overall," he said.