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Thursday, 3 February, 2000, 13:04 GMT
Portillo springs surprise U-turns

Michael Portillo: On the attack over tax

Michael Portillo has dramatically announced two major Tory U-turns in his first appearance on the Commons front bench since his surprise promotion to the shadow cabinet.

The shadow chancellor said a future Conservative government would not scrap the national minimum wage - which had previously been bitterly opposed by the Tories.

Gordon Brown: Welcomed Tory u-turns
And he said it would also "respect" the Bank of England's independence to set interest rates, a move introduced by Chancellor Gordon Brown as one of his first initiatives after taking office in 1997.

Mr Portillo said a Conservative government would legislate to enhance the bank's independence.

Mr Brown said he welcomed "the conversion of the Conservative Party to Labour Party policy on the Bank of England."

And he welcomed Mr Portillo "admitting he was wrong" over earlier opposition to the minimum wage

Mr Portillo was greeted by loud Tory cheers as he rose for his first encounter with Mr Brown at the despatch box.

Describing dealing with the chancellor as like "being assaulted by Mr Toad with the pomposity and self-congratulation that distinguishes him", he then surprised MPs by offering to be "entirely open, so we can get some openness from the chancellor".

Criticism rejected

Mr Portillo went on: "I want to tell the House today that the next Conservative government will respect the independence of the Bank of England and legislate to enhance that independence and create more accountability of the Bank to Parliament.

"And I want to tell this House that the next Conservative government will not repeal the national minimum wage."

Labour backbenchers cheered the u-turn as Mr Portillo returned to the attack on the "rising" tax burden under the government, criticism strongly rejected by Mr Brown.

The session also saw the chancellor announce that this year's Budget statement - in which he will set out his tax plans - will take place on 21 March.

Key lines of attack

Mr Portillo's two surprise announcements represent a major overhaul of the party's economic policy.

Two key lines of attack for the Tories since Labour came to power have been to criticise the decision to hand over interest rate powers to the Bank of England and the imposition of new "burdens" on business such as the minimum wage.

Outside the chamber, Conservative Central Office said: "We are saying that as far as both the level and the structure of the minimum wage is concerned we will look at the detail.

"But at the level it is operating at it is not a threat to jobs."

The spokesman said much of the party's criticism of Bank of England independence had centred on the way the monetary policy committee, which sets rates, had been set up.

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See also:
03 Feb 00 |  Business
Chancellor 'backs rate rise'
01 Feb 00 |  UK Politics
Portillo promoted in Tory shake-up

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