Page last updated at 11:51 GMT, Sunday, 28 December 2008

Tories 'may unveil tax cut plans'

George Osborne
Mr Osborne said the National Insurance rise was a "tax on jobs"

The Conservatives would cut taxes if they won the next general election, the shadow chancellor has suggested.

In a Sunday Times interview, George Osborne indicated a Tory government would not implement Labour's planned increase in National Insurance in 2011.

He also suggested he would aim to cut income tax on savings and the tax burden on the over-65s.

But Secretary to the Treasury Angela Eagle accused Mr Osborne of trying to "grab headlines" with "empty promises".

The Tories have trailed Gordon Brown and the Chancellor Alistair Darling in polls ranking economic competence despite the downturn, and been taunted by Labour of being the "do nothing" party.

But in the New Year, the party is expected to fight back to try to regain the initiative.

National Insurance

The shadow chancellor's remarks hint at a change of tack for the Tories who had said the credit crunch forced tax cuts off the agenda.

In the interview, Mr Osborne accused Labour of turning Britain into the "sick man of Europe".

He said if the Conservatives came to power, any tax cuts would be paid for by curbs on public spending or increases in other taxes, unlike the government's fiscal stimulus.

The Conservatives still intend to do nothing to give real help now to families
Angela Eagle
Exchequer Secretary to the Treasury

The government has also proposed a 1% rise in National Insurance contributions for employers and employees.

But Mr Osborne told the Sunday Times: "My priority is to try to reverse the increase in National insurance because it is a tax that affects the vast majority of people in Britain.

"It is a tax on jobs at a time of high unemployment. It is a tax on incomes at a time when people will be under severe strain."

Ms Eagle hit back at the remarks, accusing the Tories of opposing measures aimed at helping those who are struggling.

"George Osborne is happy to try to grab headlines with vague talk about tax cuts but as usual he can't say anything about how he would pay for them," she said.

"The truth is these are just empty promises from the Tories. All that Osborne has confirmed today is that the Conservatives still intend to do nothing to give real help now to families.

"It says something about their inability to move on from their 1980s ideology that they regard real help now - such as the 60 for pensioners, and the child benefit and child tax credit increases brought forward to 1 January - as state intervention to be opposed."

BBC political correspondent Iain Watson said Mr Osborne had chosen his words carefully to allow for some "wriggle room".

But if the Conservatives do announce plans to cut taxes, it could mean the next General Election would be fought on familiar territory, our correspondent added.

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