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EDITIONS
 Wednesday, 17 April, 2002, 17:29 GMT 18:29 UK
Budget 'breaks tax promise'
Charles Kennedy, Gordon Brown and Iain Duncan Smith
Chancellor Gordon Brown's eagerly awaited 2002 Budget was dubbed a "missed opportunity" by the two major opposition parties.

Tory leader Iain Duncan Smith accused Mr Brown of breaking his promise to the British people by adding a penny in the pound to national insurance (NI) to fund health service improvements.

Frankly, after this, no-one will ever believe another word you say

Iain Duncan Smith
Tory leader

He said the policy change was not mentioned in last year's election campaign, claiming Labour had merely returning to its old "tax and spend" ways.

Liberal Democrat leader Charles Kennedy took another tack by stressing that while there was a "good deal in the Budget to welcome", the chancellor had made the pensions system "fiendishly complicated".

Mr Duncan Smith kicked off his attack on the Budget by labelling Mr Brown "the chancellor that has made small print into a fine art".

'Worse off'

He said: "This government said it wouldn't raise income taxes at all and everyone knows this is a tax on income.

"You've added a penny in the pound to income tax today.

"You've broken your promise to the British people."

Mr Duncan Smith reminded the chancellor that he had described NI as a "tax on ordinary families".

A person on average earnings would be 15 a month worse off now under New Labour, he said.

You are planning to spend public money faster now than the nation can earn it over the next four years

Iain Duncan Smith
Tory leader

A nurse consultant earning 34,000 would be 24 worse off a month and a police inspector on 37,000 would be 27 worse off each month.

"So much for your great help for all those trying hard in the public services," said Mr Duncan Smith.

"Frankly, after this, no-one will ever believe another word you say."

The Tory leader accused Mr Brown of failing to mention that the country was running a deficit for the first time now in four years.

"Public investment has dropped by 1bn last year compared to your estimate at the time of the pre-Budget report."

No imagination

Mr Brown had not indicated manufacturing output is forecast to shrink this year.

But Mr Duncan Smith stressed: "Perhaps the saddest thing today ... is the state of the NHS.

"Over the past five years you have increased NHS spending by almost a third - so where has all this money gone?"

The government's failure was forcing patients to go to other countries for treatment and was letting down the elderly and the vulnerable.

By jove they kept this one quiet

Charles Kennedy
Liberal Democrat leader

Mr Duncan Smith said he would have expected the chancellor to have come up with a more imaginative approach to the problem.

The Budget "missed that opportunity". "Waiting times are getting longer but all you can suggest is more tax and no change."

Mr Duncan Smith heralded the healthcare in countries such as Germany and Denmark which Mr Brown had not "bothered" to visit.

"But today you have raised 6bn a year by adding to 1% to NI for every employee and every employer in Britain."

He argued: "You are planning to spend public money faster now than the nation can earn it over the next four years."

Many children would not going to get any of the tax credits they were entitled to because of the complicated forms they had to fill in.

Euro call

Mr Kennedy said that while his party had long-argued for increased investment in the health service, he could not find any mention of tax increases in the Labour manifesto.

"By jove they kept this one quiet," he joked.

"The health service increase will of course be welcome but for many patients it has come anything up to five years too late."

The government should ensure that the cash is devolved locally.

Mr Kennedy said it was "deeply ironic" that the Tory leader had advocated a trip round health services in continental Europe when he had been a protagonist against the signing of the Maastricht Treaty.

It was time to introduce a proper timetable for "getting this country, post a referendum, into a single European currency", he said, arguing that the strength of the pound was weakening Britain's manufacturing base.

Mr Kennedy warned that a lot of credibility and opportunity had been lost by the government with its broken promises, targets, too much spin, but not enough delivery and investment.

  WATCH/LISTEN
  ON THIS STORY
  The BBC's Rory Cellan-Jones
"Most tax payers will face a bigger bill"
  The BBC's Andrew Marr
"The NHS means more to Labour than anything else"

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See also:

17 Apr 02 | Politics
17 Apr 02 | Politics
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