After five years in office, the Labour party has thrown away the fig leaf that it doesn't believe in raising tax on people's income.
In the budget, the Chancellor of the Exchequer reached directly into our pay packets.
Just before the last election, the Trade Secretary, Patricia Hewitt said, 'Tony Blair and Gordon Brown have made it quite clear they've got no plans whatsoever to raise the ceiling on National Insurance.'
And he didn't. Gordon Brown did something to National Insurance which took even more money from the citizen: he raised the rate, and he invented a new tax for wealthier people.
Jeremy Paxman discussed if Labour had misread the public's tolerance for higher taxes on income with Alistair Darling, Michael Howard and Matthew Taylor.
We are joined by the Working
Pensions Secretary, Alistair Darling,
the Shadow Chancellor, Michael
Howard, and the Liberal Democrats
Treasury spokesman, Matthew Taylor.
When precisely, Alistair Darling,
did you decide to raise income
(Work and Pensions Secretary)
We decided as part of the Budget
judgement that if we were going
to spend more, substantially more,
on the NHS, that we would have
to raise National Insurance. The
key issue that we face is that all
of us are agreed, there¿s an all-party
consensus on the fact we need to
spend more on the Health Service.
The key issue was whether to do
this through National Insurance
increases or the Tory alternative
of charges and fees, as the Shadow
Health Secretary has clearly set up.
So you are asking us to believe
that Gordon Brown, Tony Blair
and Patricia Hewitt, and all the
others, were telling the truth at
the election when they said you
weren't planning to muck around
with National Insurance, despite
the fact that the Wanless Report
was commissioned before the
We made it very clear at the
general election, and I know
this very well, because I spent
45 minutes one day in a press
conference, making it very clear
that no Chancellor was ever
going to go through allowance
and tax, and say, "We are never
going change them". So we
made that very clear, we made
an explicit promise¿
The Prime Minister more or
No, he didn't. The Prime
Minister you saw in the film
there, saying he wasn't writing
a Budget at that time of the
interview. Jeremy, the central
issue is firstly, does the Health
Service need more money?
Secondly, if it needs more
money, does it get funding
That's common ground.
No, it¿s not.
It¿s common ground that
the NHS needs more money,
is it not, Michael Howard?
Even you want the spend more
money on the NHS.
The difference between us is
do you fund it through taxation,
increase the National Insurance,
or, as Liam Fox the Shadow
Health Secretary has made very
clear, do you do it through health
insurance, fees and charges
of what he calls self-pay.
Michael Howard, you have a
problem, because Liam Fox
also said that taxes may need to
rise in order to improve the NHS.
We certainly agree that you need
to spend more money on health.
Unlike the Government, we
don't have a closed mind about
learning lessons from other
countries. We think there are
things they do better elsewhere.
They clearly have better health
care than they do in this country.
Some of my more fortunate
constituents are being taken by
the NHS to France for operations
which they would have to wait
years for if they stayed at home.
Which taxes would you have
What we are going to do is
examine how we can best
provide the ideals of the NHS,
which is first-class health
service for the people of this
country when they need it,
regardless of ability to pay.
When we have come up with
how we can best deliver that,
we'll make sure it's properly
So as of now, you haven't a
Look, it's ten months after the
election. It might as well be
ten minutes after. If we had
come up today with a properly
worked through scheme, you
would laugh me out of this
Liam Fox has already come
up with a scheme. Self-pay
This is absolutely serious. It is
not a political gimmick. We're
engaged in a serious exercise
of how we can best deliver world
class health care for the people
of this country.
We'll explore the economics
of that a little later in another
discussion. Let's look at the
politics of this. Matthew Taylor,
Gordon Brown clearly thinks
this is an epochal Budget, if
that word exists. He believes
that people are willing to be
taxed more for directly to fund
better public services. If that's
so, why didn't more people vote
for you at the last election?
First of all, people have
consistently voted, the majority
of people, for parties that have
talked about that kind of
investment. Contrary to your
report earlier, the majority of
people haven't voted for
tax-cutting parties. That is
one of the big problems that
the Conservatives have had.
I think that people are willing
to pay. The evidence is that
in 1997, all polls showed that
people thought Labour would
raise taxes to spend on NHS
and education, despite Labour's
promises. What they actually got
was Conservative tax-cut plans
implemented for two years.
That's why we're in the mess
we are. What Labour have now
done, it is a decisive turning
point in Labour's approach is
to public services and the
Health Service in particular,
Labour have now accepted the
argument we made all along.
You can't get something for
nothing. They are going to
employ more doctors, nurses,
provide those residential and
nursing home places for the
elderly, so they don¿t have
to stay in hospital beds that
patients need, when actually
what they need is Care in the
Community. That change
costs money. Now, I believe
it can win the public over, but
only if the money is well
spent, and only if it's guaranteed
that that money will stick with
the Health Service.
Do either of you think that it
was either realistic or perhaps
hubristic of Gordon Brown to
be talking about a third term?
He is apparently extremely
They have to start telling the
truth. As is perfectly obvious,
they didn't tell the truth at the
last general election. If they
expect people to be taken with
them, they do actually, I think,
need to spell it out. They¿ve
started today, it's a bit late, but
at least we might make some
progress. What's certainly the
case is people won't vote for the
We don't know what it is yet!
What we know is Michael
Howard has described the
NHS as Stalinist. It was actually
invented by a Liberal, but never
mind. We know that Liam Fox,
their health spokesman, has
committed them to what he
calls self-pay, which is charging
you for your care.
Look, he¿s already ¿fessed up
on this. He says they don¿t
know what they¿re going to do
Michael Howard doesn¿t but
Liam Fox does.
Since when have you known
the inner counsels of the
Conservative Party better than
the Shadow Chancellor?
Let me answer that question.
There¿s two things you need
to bear in mind. Firstly,
Michael is on record as saying
that he believes that the
Government share of income
spent should be 35%.
No, not this again!
You¿re on record, Michael.
I said that in 1997. What were
you saying in the 1980s? Things
have moved on.
Michael, do you not believe
that any more?
No, I don't, and I¿ve said it
You don¿t believe that spending
should be 35%? You believe
it ought to be reduced?
Of course I don¿t.
Of course you do.
What we now face, largely as
a result of the five years of
Labour Government, is a crisis
in the public services. I've
endlessly said that has got to
come before tax cuts. Let's not
argue about what was said in 1997,
let's argue about the problems
that the country faces today,
because it faces serious problems.
It¿s going to face serious problems
as a result of your tax increases.
We are now one of the most
highly taxed countries in Europe.
We're one of the most highly
regulated countries in Europe.
We're becoming less and less
attractive to inward investment.
As the Secretary of State for
Work, you ought to be concerned
about the effect on jobs of the
large hike in taxes that you have
Actually, as today's employment
figures show, there are record
numbers of people in work,
something that Michael couldn't
say when he had the equivalent
post ten years ago. Our record
there is quite good.
Let¿s see what about your
National Insurance employers
Let us come to the central issue
before us tonight. There is
common ground that the amount
of money that needs to be spent
on the NHS needs to be increased.
The choice is clear, you either do
it through taxation or you do it,
and I repeat the point, because
Liam Fox has said this, you do
it through insurance or charges.
The question he has to answer
is who pays, how much, and if
you can't pay, what happen to
you? That¿s the difference
between the two parties.
This transcript was produced from the teletext subtitles that are generated live for Newsnight. It has been checked against the programme as broadcast, however Newsnight can accept no responsibility for any factual inaccuracies. We will be happy to correct serious errors.