BBC Homepage World Service Education
BBC Homepagelow graphics version | feedback | help
BBC News Online
 You are in: UK Politics
Front Page 
World 
UK 
UK Politics 
Interviews 
Business 
Sci/Tech 
Health 
Education 
Entertainment 
Talking Point 
In Depth 
AudioVideo 



Shadow Social Security Secretary David Willetts
"We can afford it out of the 8bn of savings we have identified"
 real 28k

Andrew Dilnott, Institute of Fiscal Studies
"It is quite radical"
 real 28k

Monday, 5 February, 2001, 13:32 GMT
Tories to abolish tax on savings
William Hague
Hague unveiled 'radical' savings tax breaks
The next Conservative government would abolish tax on all savings except at the upper rate, shadow chancellor Michael Portillo has announced.

In what he said was "the most radical changes to the taxation of savings for a generation", Mr Portillo said only those earning above 32,000 a year would have to continue to pay the tax.


They have failed to identify savings which can pay for these or any other tax cuts

Labour spokesman
"Today we are proposing to abolish tax on savings altogether, except at the upper rate," he said at a news conference at the party's Westminster headquarters.

"Under the next Conservative government, nobody will pay any tax on the interest they've earned from their savings unless they have an income above 32,000 a year."

Conservative leader William Hague, who joined Mr Portillo to unveil the plans on Monday, attacked the government's record on tax as having discouraged saving.

He said that proposed Tory tax reductions would be designed to encourage "individual independence, institutional freedom and social responsibility".

'Radically different'

"We want Britain to be a responsible society," said Mr Hague.


Re-elect Labour and soon any rational person will think twice before saving for the future

William Hague
"A society where people and institutions see it as worthwhile to save.

"A society where people's first instinct is to prepare for the future so that they can provide for themselves and those who depend on them.

"A society where everyone can afford to save today so that they can live in dignity tomorrow."

The Tory vision for Britain was "radically different" from the one under Chancellor Gordon Brown, whom Mr Hague accused of undermining people's "financial independence".

"Re-elect Labour and soon any rational person will think twice before saving for the future, because soon only the very rich will be able to escape from clutches of means testing," he said.

'No accident'

As a nation the UK now put aside the same proportion of its wealth as people did 40 years ago, he said.

"This is no accident when you consider the way the chancellor has treated savers," the Tory leader said.

Mr Portillo has described the plans for pensioners' savings as "only a small part of a rather bigger announcement".

He has said the package - widely expected to form part of the next Tory manifesto - will encourage a "savings culture".

'Sums don't add up

The plans were dismissed by a Labour Party spokesman who said: "No one will believe anything the Tories say about tax because none of their sums add up.


Everyone knows you can't get something for nothing - except for Michael Portillo and William Hague

Matthew Taylor
"They have failed to identify savings which can pay for these or any other tax cuts.

"The truth is that the Tories' plan would mean 16bn cuts in public services like schools, hospitals and transport."

'Phoney figures'

For the Liberal Democrats, treasury spokesman Matthew Taylor said the Conservatives were "unable to explain" just how much their tax proposals would cost.

"The Conservatives promise to match Labour pound for pound in every spending area and claim they can also cut taxes and balance the books - no-one will believe these phoney figures," he said.

"The Conservatives no sooner unveil their tax plans than they unravel. Tory tax plans just don't add up.

"Everyone knows you can't get something for nothing - except for Michael Portillo and William Hague."

Search BBC News Online

Advanced search options
Launch console
BBC RADIO NEWS
BBC ONE TV NEWS
WORLD NEWS SUMMARY
PROGRAMMES GUIDE
See also:

05 Dec 00 | Talking Politics
Tory tax cuts: A closer look
29 Jan 01 | UK Politics
Hague's 8bn tax giveaway
22 Jan 01 | UK Politics
New Tory spending pledge attacked
22 Mar 00 | UK Politics
Tory MP warns Hague on tax
Internet links:


The BBC is not responsible for the content of external internet sites

Links to more UK Politics stories are at the foot of the page.


E-mail this story to a friend

Links to more UK Politics stories