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Thursday, 8 March, 2001, 15:40 GMT
Budget row stokes election fever
Portillo and Brown square up as election nears
Spending on schools and hospitals has become the main battleground between Labour and the Conservatives - a day after what was generally accepted to be a pre-election Budget.

Chancellor Gordon Brown says his plans for an extra 2bn for health and education over three years makes it more urgent for the Tories to explain how they will make cuts to fund tax reductions.

The Tories must cut Labour's spending plans by 16bn

Alistair Darling
Shadow chancellor Michael Portillo responded by saying he will match the announcements in the Budget and still cut taxes.

"Labour's spin is absolutely different from the reality, as it always is. It isn't extra money, and therefore there is no problem in matching it," he said.

Spending 'affordable'

But Social Security secretary Alistair Darling said later that the additional funds for schools and hospitals were affordable because of unexpected savings on social security and debt interest payments.

"The Budget plans mean that spending will now grow by 3.7% a year over the next three years," he said.

"The Tories' spending rule, their only spending rule, is that spending should grow by 2.25% a year or less.

Michael Portillo
Portillo derided Labour's tax cuts
"This is the rock on which they stand. If they grow spending at 2.25% a year, they must cut Labour's spending plans by more than 16bn over three years or 10bn over two years."

Mr Darling also accused Mr Portillo of being inconsistent in claiming he would match Labour plans, but also insisting he would stick to lower spending growth.

"He either has a rule or he doesn't. There are two Portillos about," said Mr Darling.

Petrol Cuts

At his own post-Budget briefing Mr Portillo accused the chancellor of "triple counting" the 1bn he said would be invested in the NHS over the next three years, saying the true figure was 290m.

"It is neither here nor there," he said.

Mr Portillo insisted the Tories would stick to their plans to cut public spending by 8bn, while matching Labour's expenditure on vital public services, to fund tax cuts.

He also confirmed a future Tory Government would cut petrol by at least 3p a litre even after Mr Brown's Budget measures.

In Wednesday's Budget, the chancellor announced around 3.6bn in tax cuts - 2bn of which went to motorists and which had already been foreshadowed in November's pre-Budget report.

He also confirmed 1.6bn for pensioners which had been pre-announced in the autumn.

Budget Key points
Extension of 10p tax bracket
Paternity leave introduced
Child and Working Families Tax Credit boosted
Freeze on wine, beer and spirits duty
Cigarettes up 6p a pack
Betting duty scrapped
The Budget's warm reception from many of the national newspapers has added to the pressure on Tony Blair to call a spring general election.

The Sun newspaper, a stalwart supporter of the Tories throughout the Thatcher years, declared it was backing Labour for a second term.

But former Conservative foreign secretary Sir Malcolm Rifkind denied that this was a fatal blow for his party.

He told the BBC that the newspaper's policy had been decided by its owner, Rupert Murdoch.

"He takes a judgement as to what suits his own views. He's perfectly entitled to his opinion, but the country is not governed by The Sun and it is not The Sun that decides elections," said Sir Malcolm.

Earlier, Mr Brown insisted Labour was not complacent about the outcome of the election, saying it should never take anything for granted.

Money 'misused'

For the Liberal Democrats, Malcolm Bruce attacked the Budget as a missed opportunity.

"We need to do a great deal more if we are going to get the nurses, the doctors and the boost to pensions that we need."

He said that Mr Brown had the money but was not using it in the right way.

"It is a pre-election Budget when what was needed was an investment Budget," he argued.

The BBC's Andrew Marr
"Part of the problem is the mind-numbing size of the numbers they are talking about"
The BBC's Reeta Chakhrabati
"The parliamentary opposition remained impervious to Gordon Brown's financial charms"
Leader of the opposition William Hague
"All is not what it seems"
Chancellor Gordon Brown
"Our country now has the lowest inflation for 30 years"

Key stories

Spending and saving




See also:

08 Mar 01 | Business
07 Mar 01 | Budget 2001
08 Mar 01 | Business
08 Mar 01 | UK
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