Party political tax war hots up

The tax ‘war’ between Labour and the Tories has intensified with a firm pledge from Prime Minister John Major of a basic 20p income tax rate.

It came after financial secretary Michael Jack described Labour leader Tony Blair’s 10p starting rate as ‘frankly incredible’ because of its z8bn cost.

Major delivered his promise in a letter sent out by direct mail from central office to selected supporters. In the letter he also promised that, ‘as soon as we can afford it’, inheritance and capital gains tax will be scrapped altogether.

Meanwhile, Labour published a leaflet setting out what they said were the Tories’ ’13 lies about Labour’. In it they claimed to have no proposals for a ‘teenage tax’ but admitted to reviewing child benefit for 16-18 year olds. The leaflet defended a windfall tax on fat cat utilities, insisted Scots would not have to pay more tax because of devolution and said that proposals that they would impose a new London tax ‘were pure invention’.

Labour denied planning a new inheritance tax on the super rich, and said they had no plans to tax houses in the south east extra. Speculation that they were planning: a trucking tax; a new company car tax; a graduate tax; a private health tax; a higher council tax; and a telephone tax were also hotly denied.