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Programme highlights Wednesday, 9 May, 2001, 15:32 GMT 16:32 UK
Brown insists tax policy adds up
Gordon Brown
Mr Brown insists he won't raise taxes
Labour backbenchers in marginal seats might have liked to hear a different message from their Chancellor - perhaps one offering more obvious inducements to voters.

But in a speech on Wednesday, Gordon Brown was cagey on tax but adamant that the underlying principle of the party's election manifesto would be the achievement of economic stability - one of five economic goals he would be setting for the party.

"We will stay the course of stability because it is the foundation of everything we do - stability yesterday, today, and tomorrow," Brown declared.

Michael Portillo
Michael Portillo: "We believe in allowing people to keep more of their money"
The other four goals were high productivity, full employment, the halving of child poverty and the opening up of higher education to a majority of young people.

"We need a balanced approach which recognises the need to invest in public services, but where affordable, targeted tax cuts."

The manifesto, he said, would have much to say about five other policy priorities - health, fighting crime, local Government, Europe and the Environment.

But Mr Brown's aim was clearly to demonstrate that Labour's management of the economy is so sound and solid that he can afford the large increases in public spending that he's already promised.

Earlier, on the Today programme, the Chancellor claimed that, under Labour, people were better off - the average household had become 10% better off in real terms during Labour's period in office. And that they could still be better off even with the Government increasing public spending.

But do his sums add up? If they don't, will he raise tax? Indeed, will Labour make a new pledge not to raise taxes, as it did over income tax and higher rates of tax in 1997?

Independent critics and opponents together say that his plans to spend more on new hospitals and schools outstrip growth - and that in due course he will only be able to make up the difference by raising taxes.

Mr Brown insists he can afford the spending AND what he calls targeted tax cuts - a phrase he repeated several times in today's speech, without saying what he meant.

Matthew Taylor
The LibDems say their policy of raising income tax by a penny is more honest
He is clearly keeping his powder dry on what those targets might be until the manifesto launch next week.

The economy is not an area where any ground at all can be ceded to Labour by their opponents. Matthew Taylor from the Liberal Democrats insists Labour can't have it both ways and that neither Labour nor the Conservatives could be trusted on the tax.

"Gordon Brown cannot hide the fact that Labour is spending a smaller proportion of national income on health, education and pensions than the Tories ever did," he said.

As for the Tories, they're still in the process of marking out new ground for themselves in the face of Labour's attempt to claim the mantle of prudent economic management.

The Shadow Chancellor Michael Portillo said: "We believe in allowing people to keep more of their money. Gordon Brown believes in keeping more of people's money."

Tax cuts 'irresponsible'

Speaking on the World at One Mr Brown defended his record and criticised calls for him to promise tax cuts:

"The Conservatives are making irresponsible tax cut promises. That is a recipe for a return to boom and bust," he said.

He said the government had freed up substantial resources for public spending by reducing unemployment and clearing a large part of the national debt - thereby reducing debt interest repayments.

Having published his spending plans for the next three years, he was confident that he would have the surplus to deliver "targeted tax cuts", he said.

The Chancellor Gordon Brown
"We seek a Britain that can be a great economic success story"
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