Portillo hints at £8bn tax cuts

Michael Portillo: Pledging to cut tax and increase spending

Shadow chancellor Michael Portillo has said the Tories could offer £8bn in tax cuts if they won the next general election by not increasing public spending by as much as Labour.

Labour immediately rebutted the claim, lining up a string of cabinet ministers to denounce the proposals as leading to privatisation of the NHS, describing them as presenting a "real and present danger" to the service.

In an article for The Times newspaper Mr Portillo sought to neutralise Labour's repeated accusations that Conservative spending plans amounted to £16bn worth of cuts in public services.

I'm talking about changing the way people think about the way they support the health service and take the strain off it wherever they can

Michael Portillo

Outlining his strategy on taxation Mr Portillo told the BBC it was time the public was told that spending on services could be increased by £60bn - compared to Labour's planned £68bn - as long as the economy was growing.

Labour spending 'unsustainable'

The shadow chancellor said he would not commit himself to a particular figure for tax cuts, despite telling The Times that cutting £8bn off the tax burden was a possibility.

He would have to find spending cuts to pay not only for his tax plans but also for the extra spending his shadow ministers are promising

Andrew Smith

Mr Portillo promised details on figures would be announced in the future, but the party would not go as far as releasing a shadow budget as Labour had done in 1992.

So far the Tories believe they have identified savings of £3bn from the social security budget and a further £2bn from efficiency savings.

Turning to Labour, the shadow chancellor said the government's plans to increase public spending by about 3% a year was unsustainable.

The Conservatives favour a figure of around 2%.

Tax protests

"What ever the government may be promising for public spending, which I believe is unsustainable - we can also see that people are now protesting about paying these levels of tax.

"They have protested over petrol and they are doing all they can - many people - to avoid paying tax on alcohol and cigarettes by buying them from car boot sales and so on."

He also stressed that the Tories would stick to Labour's spending plans for the first year after a general election.

Providing broad details of how to reduce public spending, Mr Portillo said people should be encouraged to spend more on their health and pension provision.

Tony Blair attacked Tory spending plans at the Labour Party conference

Writing in The Times, Mr Portillo said: "If we were to commit ourselves to raise public spending by £60bn instead of Mr [Gordon] Brown's £68bn, and to make £8bn of tax cuts, we would, without any effect on debt, still be committed to a huge programme of spending that would easily encompass our commitment to match Labour's planned spending on the NHS."

During his Today interview, Mr Portillo harked back to his party conference speech by saying the Tories wanted to get "extra money from other sources" into the health service.

He said the Conservatives would expect "people who can, to make a little extra contribution".

Mr Portillo said: "I'm talking about changing the way people think about the way they support the health service and take the strain off it wherever they can.

'Privatisation and cuts'

Health Secretary Alan Milburn said this showed Mr Portillo had "once again confirmed the Tories' privatisation agenda for the NHS".

Leader of the House of Commons Margaret Beckett said the Tory plans were a "real and present danger" to the NHS, taking it back to a familiar agenda of "privatisation and cuts".

And Chief Secretary to the Treasury Andrew Smith said the shadow chancellor's policies threatened the health of the economy, consisting of "spending cuts he cannot name and tax cuts he cannot fund".

He said a Tory government would be have to borrow £11bn if it followed Labour's spending plans and met its own pledges.

"His shadow spokespeople in all the spending departments have gone around making additional commitments to Labour's spending plans, so he would have to find spending cuts to pay not only for his tax plans but also for the extra spending his shadow ministers are promising," Mr Smith said.