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Tuesday, 17 March, 1998, 19:47 GMT
Hague: 'betrayal', Ashdown: 'not bad'
The Conservative leader, William Hague, said Gordon Brown's Budget was a step by step betrayal of Britain. However, he told the House of Commons that his party welcomed some aspects of the Chancellor's package.
Opening the debate on Mr Brown's statement, Mr Hague said Mr Brown's statement sent a clear message that the Government was not on the side of "the family that works hard and saves hard and tries to be independent of the state".
He welcomed measures to help small companies and cut National Insurance contributions. But he accused the Chancellor of betraying rural areas with a rise in petrol prices, betraying business with extra taxes and betraying women and children by proposing to become the first Government ever to tax child benefit.
Mr Hague attacked the new working families tax credit as an initiative that, he said, would increase expenditure, increase the number of people tangled up in the benefits system, and increase complexity.
He said the Chancellor had devised the system, "which I think he hopes none of the commentators will understand", in order to redeem Labour's pledge to reform welfare.
He said Labour had come to power "with a heap of promises, a bundle of aspirations, a lorry-load of clichés, but nothing resembling a plan [for welfare reform]."
The Tory leader added that plans to provide tax credit for child care would not help parents who looked after their own children, but only lone parents and two-earner couples using registered child minders and clubs. He said it could create a "crazy situation" where next door neighbours would do better looking after each other's children.
He added: "At least he was self sacrificing and did not introduce a special tax relief for looking after children for the duration of a photo call."
Mr Hague said he welcomed spending increases on health and education but he criticised the Government for not fulfilling its pledge to reduce hospital waiting lists.
He attacked the Chancellor's decision to postpone the introduction of a 10p tax rate, which he said had been announced before, during and after the election as well as in this Budget statement.
He also said the Budget did not "remotely make up for" tax increases already announced in the last 10 months of the Labour Government.
Golden economic legacy
Mr Hague accused Labour of "step by step betraying the golden economic legacy" it had inherited from the Conservatives. He claimed the Chancellor had created "the worst of all worlds" for industry, with higher taxes, interest rates and a strong pound.
He said the Chancellor had shown so little confidence in his own policies that he had even downgraded his own growth forecast for this year in the fine print of the Budget, the Tory Leader added.
He added that the Tories had forced Labour into a "humiliating U-turn" on its plans for the new Individual Savings Accounts, which are due to replace Personal Equity Plans (PEPs) and Tessas. "We may have lost the vote but we clearly won the debate," he said.
During the Budget statement Mr Brown declared that holders of existing PEPs would be able to hold on to their accumulated savings without paying tax.
Mr Hague said the Government's plans had permanently damaged Britain's savings culture. "Don't let the Chancellor think that he has done no damage to savings in this country, savers now know that the Labour Party have an instinct for retrospective taxing."
A policy too far
Mr Hague said that although Conservative Governments in the past had increased petrol duties above the level of inflation on environmental grounds, Mr Brown had taken that policy too far.
"An extra 4.4p on a litre of fuel means that the tax has gone up by 20% in the last two Budgets, by twice the rate of increase under the last Government and introducing that rise from today, rather than the normal November rate will cost motorists hundreds of millions of pounds extra."
However, he said the programme was not bold enough and would do little to correct underfunding of public services. He also accused the Government of over-reliance on interest rates to control the economy and of a lack of clarity on joining the European single currency.
Former Conservative Chancellor, Kenneth Clarke, criticised Mr Brown for not providing enough detail in his announcements and attacked the child care funding proposals.
Labour MP, Dennis Skinner, gave the Chancellor "seven or eight out of 10" for his financial package but said he could have gone further than allocating an extra £500m for the health service. "I would have said an extra billion for the health service. That would have taken it up to over £3bn since we came into office," Mr Skinner said.
Edward Davey, of the Liberal Democrats' Treasury team, said: "The proposals on National Insurance Contributions are very welcome. The real disappointment is the failure to invest in public services."
Labour MP, Giles Radice, chairman of the Commons Treasury Select Committee, said the Budget preserved Mr Brown's reputation as an Iron Chancellor, but found useful increases for education, health and transport.
Shadow Social Security Secretary Iain Duncan Smith claimed Mr Brown had produced "a devastating Budget for families".
Peter Temple-Morris, the former Tory MP turned independent, praised the Chancellor's package as having something for everyone. "It was very evident from the faces of the Opposition that it was very hard for them to find anything to criticise," he said.
Britain's biggest union, Unison, described the Budget as "hard-edged with some compassion".
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