Hague and Blair launch tax battle

William Hague says the Tories will target tax cuts

Tony Blair and William Hague have launched a pre-election battle on tax and which party can be best trusted to manage the country's finances.

The Conservatives unveiled a new £1.5m poster campaign accusing Labour of increasing taxes by stealth and failing to deliver any improvements in public services.

New Tory slogans

You've paid the tax, so where's your operation?

You've paid the tax, so where are the teachers?

You've paid the tax, so where are the trains?

You've paid the tax, so where are the police?

The prime minister will counter later on Tuesday that hard choices made by his government, and not chance, have led to a successful economy.

The tax battle follows Mr Blair's signal at the weekend that Labour intends to put the economy at the heart of the general election campaign expected this spring.

William Hague said the Tories were happy for the economy to form the chief battleground and reiterated the party's pledge to deliver £8bn in tax cuts.

The Tory leader said government taxes were hitting the poorest members of society hardest and were equivalent to an extra 10 pence on the income tax rate.

Target tax cuts

Mr Hague said the Conservatives would target tax cuts at those who he said had been hit hardest under Labour such as motorists, pensioners, savers and rural people.

"The people of Britain do not want more stealth taxes. They know that they have paid all their taxes. Now they want to know where the money has gone."

He added: "The typical working family is paying an extra £670 in tax under Labour."

The Tory campaign, featured on 1,000 billboards across the country, includes attacking what the the party called the government's "tax and waste" spending policies.

The posters highlight issues on which the Conservatives are convinced Labour is vulnerable, such as police numbers, the health service and teachers.

A typical slogan is: "You've paid the tax, so where are the police?"

The Tories have in recent months succeeded in forcing the government on the defensive over police numbers, which have fallen since New Labour took office in 1997.

They hope to turn Labour's own 1997 election slogan against the government by insisting that under Mr Blair "things aren't getting any better".

'The great pretender'

Poster attacks before the last election drew criticism

Mr Hague accused Mr Blair of pretending taxes were not rising and that public services were improving.

"Tony Blair is to borrow from the song the great pretender.

"He pretends the NHS is not in perpetual crisis. He pretends that there are enough teachers and he pretends that there are enough police."

Speaking at the campaign launch, Shadow chancellor Michael Portillo added: "There is no signs that Labour's extra taxes have actually brought any benefits for the people of this country."

'Choices not chance'

But Health Secretary Alan Milburn insisted that the government had kept all its promises on taxation.

"We said that we wouldn't raise the basic or top rate, in fact we have cut the basic rate, we have introduced a new 10p starting rate and we have cut VAT on fuel," he said.

"The typical family with children, for example, will on average be £850 a year better off as a consequence of the choices we have made on tax policy."

Later on Tuesday the prime minister will use a speech in Bristol to insist that increased investment in public services is only possible because of tough choices his government took early in this parliament.

Mr Blair will also unveil his own party's latest slogan: "choices not chance".

The prime minister's speech follows Chancellor Gordon Brown's signal last week that he intends to target any tax cuts in his March budget at families and pensioners.