Give the people back their surplus

Michael Portillo is shadow chancellor and Conservative MP for Kensington & Chelsea.

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By the Rt Hon Michael Portillo MP

We all know that the chancellor, Gordon Brown, can afford to cut taxes in the Budget and he should do so. But we also know that he will only be giving back with one hand a tiny fraction of what he has already taken with the other.

Our priority will be to cut taxes in ways that help those who have been hit hardest by Labour and to support those who take responsibility for themselves and their families

The chancellor only has a surplus now because he has been over-taxing the British people since he came to power four years ago.

Labour doesn't understand that it's not really the chancellor's surplus at all; it's the people's surplus, taken from hard-working families, savers, pensioners and businesses who are paying too much in tax.

Overall, the tax burden - the share of our income that we as a nation hand over to the taxman every year - has risen under Labour by £25bn, equivalent to nearly 10p on the basic rate of income tax, and it is hard-working families, pensioners, savers and business who have been hit hardest.

So Gordon Brown would have to cut taxes by £25bn on Wednesday just to get taxes back down to where they were before he set foot in the Treasury.

All talk, no cuts

The chancellor hopes that if he talks about tax cuts once every four years he can make people believe he's a tax-cutting chancellor and forget all the extra taxes they've had to pay.

Before the last election Gordon Brown and Tony Blair promised time and again that they would not increase taxes. In office they have shown their word to be worthless

But any tax cuts in this pre-election Budget will be seen for what they are: insincere, because people will see through a transparent attempt to buy off their discontent before they go to the polls; and incredible, because voters knows that Gordon Brown is a tax-raising chancellor who would put taxes up again in the next Parliament if Labour were to win a second term.

Before the last election Gordon Brown and Tony Blair promised time and again that they would not increase taxes.

In office they have shown their word to be worthless, clobbering people with stealth taxes on petrol, on pension funds, on marriage, on mortgages, on cigarettes, on savers and on entrepreneurs while at the same time failing to deliver better public services.

Undoing the damage

Gordon Brown will want to use this Budget to distract attention from the rising tax burden - which he has banned ministers from mentioning - and his failure to deliver better schools, hospitals and more police on the streets.

I want to use my first budgets to undo some of the damage that Labour's stealth taxes have done- not least the way in which they have hit those people who have tried to do the right thing.

Our priority will be to cut taxes in ways that help those who have been hit hardest by Labour and to support those who take responsibility for themselves and their families. So we will:

• abolish taxes on savings, helping almost 17 million households
• give the over-65s a £2,000 tax break, taking one million pensioners out of tax altogether and giving millions more a tax cut worth £8.50 a week
• reduce the tax paid by families with young children by £200 a year over and above the level of the Children's Tax Credit set by Gordon Brown
• reintroduce a recognition of marriage in the tax system to support parents and carers who remain at home to look after their children and relatives, worth up to £1,000 a year
• provide a further tax break for widowed parents worth around £1,000 a year

These tax cuts will be financed from changes to public spending that Gordon Brown refuses to make, and can be afforded over and above any tax cuts the chancellor may offer in the Budget.

We have put forward the most detailed public spending proposals ever advanced by a party in opposition, allowing us to cut taxes by £8bn by 2003-04.

Conservative tax cuts are sustainable and rooted in a vision of a responsible society - a vision that looks further ahead than the next election.