The Conservative Party in Blackpool: Clarke prepares way for tax rises: Chancellor ignores doubters and insists cut in spending is not enough

KENNETH CLARKE, the Chancellor, yesterday recalled the track record of Baroness Thatcher as cover for possible tax increases in his November Budget.

Unsettling representatives who appealed to him during an economy debate not to raise taxes, Mr Clarke said the Government had to get back to sound public finance.

'As Margaret Thatcher discovered in her courageous Budget of 1981, when the first priority is to balance the books, tight control over public spending is not always enough. The key question for me to decide, not now, but in November in the Budget, is whether we have done enough.

'No Conservative chancellor raises taxation unless it is absolutely vital for the good of the country. And make no mistake, the tax increases Norman Lamont announced last March were absolutely vital.'

Mr Lamont himself told a fringe meeting that his last Budget, containing more than pounds 10bn in tax increases phased in over three years, would raise 12.5 per cent more than the 1981 Budget increases - though he attributed the latter to Lord Howe, not Lady Thatcher.

Mr Clarke joined in the ministerial support for the Prime Minister, crediting him with winning the last election almost single handedly. 'Any enemy of John Major is an enemy of mine. Any enemy of John Major is an enemy of the Conservative Party.'

No one would say it had been a good year for the party, he said. 'Blood, sweat and tears would be an understatement. Frankly none of us will forget it for a very long time.' It was precisely at such times that the enduring strengths of the party had to be asserted, he said - 'clarity of purpose, unifying principles, self-discipline'.

Mr Clarke said that just as Britain had been among the first countries in Europe to emerge from recession, so it must lead in cutting government borrowing. 'As a Conservative chancellor I cannot accept that a government should be borrowing pounds 1 for every pounds 6 that it spends. Interest payments on the national debt are the fastest rising of all the Government's spending programmes. That is your money buying nothing. No hospitals, no schools, no roads.'

His first instinct and first duty as Chancellor when tackling borrowing was to rein back public spending, and that was what he and Michael Portillo, the Chief Secretary, were doing, Mr Clarke told the conference. The limits set for next year's public spending were the tightest he could remember in 14 years as a minister. They amounted to a freeze, and he appealed for support in the tough decisions ahead.

'We mustn't be under any illusions about what a freeze in public spending means. If we are to deliver our promises on health care, higher education, pensions and law and order we will have to cut back hard on other spending programmes. Some of those savings will be painful.'

Mr Clarke said he understood the concern about VAT on domestic fuel. 'As a party we need to do better if we are to convince the public why that decision was the right decision and why we must carry it through.'

VAT would raise nearly pounds 3bn in a full year, with two-thirds of the money coming from households with incomes of pounds 12,000 a year or more. Even with VAT, gas prices would still be at the same level in real terms as five years ago. He repeated the promise that extra help for 'the poorest members of the community' would arrive before the first bills next April. 'That help will go to many millions of households. No sensible person should condemn the tax before they have even seen our package of help for those least able to pay.'

Opening the debate, Charles Latham, leader of Southend council, urged Mr Clarke to look carefully at the decision to impose VAT at the full 17.5 per cent in 1995. Andrew Turner, prospective Euro-candidate for Birmingham East, emphasised the importance of the support package.

But despite the rash of motions opposing VAT on fuel - none of them selected - the anger did not emerge in the debate. Tax increases roused more passion. Andrew Mikenna, of Manchester, was booed when he called for 'a slight increase' in direct taxation to help reduce the spending deficit.

More representative was Nick Gibb, of Stoke-on-Trent, who said it was 'vitally important' for the party to maintain its position as the party of low taxation. People paid less income tax in successful economies, he said. In Japan the average tax and insurance on a pounds 20,000 salary was pounds 3,400, in Germany and the United States pounds 3,700 but in Britain pounds 5,200.

(Photograph omitted)

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
Angel Di Maria is shown the red card
tech
Sport
Roger Federer after his win over Tomas Berdych
sport
Life and Style
News in briefs: big pants in 'Bridget Jones's Diary'
fashionBig knickers are back
Sport
James Milner is set to sign for Liverpool this week despite rival interest from Arsenal
sportReds baulk at Benteke £32.5m release clause
News
The controversial Motor Neurone Disease Association poster, featuring sufferer Michael Smith, has drawn a series of angry complaints
newsThis one has been criticised for its 'threatening tone'
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: European Sales Director - Aerospace Cable & Wire

£100000 - £125000 per annum: Recruitment Genius: As a top tier supplier to the...

Recruitment Genius: Digital Project Manager

£17100 - £22900 per annum: Recruitment Genius: One of the North West's leading...

Recruitment Genius: IT Support Technician

£20000 - £22000 per annum: Recruitment Genius: This is an intermediate help de...

Recruitment Genius: CNC Turner

£20000 - £35000 per annum: Recruitment Genius: This long established manufactu...

Day In a Page

On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific
In this the person to restore our trust in the banks?

In this the person to restore our trust in the banks?

Dame Colette Bowe - interview
When do the creative juices dry up?

When do the creative juices dry up?

David Lodge thinks he knows
The 'Cher moment' happening across fashion just now

Fashion's Cher moment

Ageing beauty will always be more classy than all that booty
Thousands of teenage girls enduring debilitating illnesses after routine school cancer vaccination

Health fears over school cancer jab

Shock new Freedom of Information figures show how thousands of girls have suffered serious symptoms after routine HPV injection
Fifa President Sepp Blatter warns his opponents: 'I forgive everyone, but I don't forget'

'I forgive everyone, but I don't forget'

Fifa president Sepp Blatter issues defiant warning to opponents
Extreme summer temperatures will soon cause deaths of up to 1,700 more Britons a year, says government report

Weather warning

Extreme summer temperatures will soon cause deaths of up to 1,700 more Britons a year, says government report
LSD: Speaking to volunteer users of the drug as trials get underway to see if it cures depression and addiction

High hopes for LSD

Meet the volunteer users helping to see if it cures depression and addiction
German soldier who died fighting for UK in Battle of Waterloo should be removed from museum display and given dignified funeral, say historians

Saving Private Brandt

A Belgian museum's display of the skeleton of a soldier killed at Waterloo prompts calls for him to be given a dignified funeral