Waldegrave admits that Tories have put up tax

Government vulnerability on tax was exposed yesterday when Michael Heseltine was contradicted by a Treasury colleague who admitted an increase in the burden of direct taxes.

William Waldegrave, Chief Secretary to the Treasury, was asked on the LWT Jonathan Dimbleby programme whether it was true - as Labour said - that direct taxes had risen by pounds 50 a year for the average family since the 1992 election.

Mr Waldegrave said: "I think that's broadly right. You have to, I think, include National Insurance contributions because we had to put them up in, I think it was, 1994."

Interviewed separately on BBC's On the Record programme Mr Heseltine repeatedly denied the same charge.

John Humphrys told him that according to figures supplied by the Commons library, using Treasury data, the average family was pounds 50 worse off in terms of direct taxation than it was at the last election.

Mr Heseltine replied that this was "not the case" and Mr Humphrys was giving a "false impression".

But the Commons library figures showed, in fact, that a couple with two children and one breadwinner on average male earnings of an estimated pounds 411.30 a week would be paying an extra pounds 54.70 a year in income tax and National Insurance contributions in 1997-98 than in 1992- 93. The Treasury estimates that the direct tax burden has risen from 20.2 per cent of income for the same family in 1992-93 to 20.7 per cent in 1997-98 - the same level as in 1991-92, pre-election year.

The facts also dispute the Prime Minister's assertion to the Commons that his government had "kept direct tax down".

Gordon Brown, the shadow Chancellor, said last night: "The Tory tax bombshell has exploded today as William Waldegrave has admitted that the Tories have not been telling the truth ... This explodes John Major's claim that direct tax is falling."

Nick Harvey, the Liberal Democrats' campaign chairman, last night challenged Mr Brown and Labour to vote against the Chancellor's proposed penny cut in the standard rate of income tax in the Commons tomorrow night - saying the money would be better spent on education.

"In six months' time," he said, "the Labour Party may well form a government. If the Labour Party votes in favour of tax cuts on Tuesday night, that government will find the Treasury cupboard bare when it attempts to invest in public services."