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Monday, 30 October, 2000, 14:07 GMT
Election campaign targets economy
Shadow chancellor Michael Portillo
Portillo pledges low taxes and high spending
By BBC News Online's political correspondent Nick Assinder

As each day goes by, voters are being given further glimpses of the shape of the battleground for the next general election.

The latest has come from shadow chancellor Michael Portillo with confirmation that a Tory government would match government levels of spending on the NHS while at the same time cutting taxes.


The real battle between now and the election will be over which party voters trust to run the economy best

This is a return to the old suggestion that people can have the best of both worlds - increases in public spending AND lower taxes.

And it is certainly the case that in recent years, on both sides of the Atlantic, the idea that people should be asked to pay more taxes to fund public services has been seen as a massive vote loser.

Labour, once known as the tax-and-spend party, abandoned its old ways and embraced that idea for the last general election.

But ministers have lately been forced to confess that the government has increased the overall tax burden.

They insist it is now set to fall, but they have time and again been forced to resort to the old argument that, if they had not increased indirect taxes there would not have been the huge boost for public services.

Old divide

What the Tories clearly want to do is to get back to the old divide between them and Labour over the economy.


it is certainly true that Mr Portillo has yet to put real flesh on the bones of his policies

They want the election to be fought between a high tax, high spend Labour party and a low tax, high spend Tory party.

But, in attempting to move into that area, Mr Portillo has left himself open to the claim that he would actually be forced to cut public spending.

He has also allowed fresh claims that, by suggesting the better off could pay more towards health care, he is out to privatise the NHS.

Ministers have long been insisting that the opposition's plans would see 16bn slashed from spending and believe Mr Portillo's latest pronouncement has accepted that 8bn will have to go.

The Tories, however, insist this is not true and that they would be able to fund the tax cuts by efficiency savings and tackling benefit fraud.

However, in an attempt to head off some of the Labour claims about cuts, Mr Portillo has also pledged to stick to the government's plans for the first year of a Tory government.

Needless to say, both sides insist that the other's figures do not add up.

And it is certainly true that Mr Portillo has yet to put real flesh on the bones of his policies.

Most trustworthy

But Labour, now in full pre-election mode, is worried enough to have put the economy top of its agenda.

The party knows that, if the Tories once again manage to paint themselves as the most economically trustworthy party, Labour will be in serious trouble.

So, when the prime minister makes a speech in the north east later this week, he will concentrate on "the big economic choices facing the country".

What politicians on both sides know is that most voters put little store in statistics.

Most recently Labour has learned that painful lesson. Despite the massive planned increases in public spending there have been few signs of delivery and disillusion has become widespread.

So, the real battle between now and the election will be over which party voters trust to run the economy best.

That was once the Tories' great strength but it slipped away and, at the last election, Labour was seen as the most economically trustworthy party.

Tony Blair's battle will be to hold onto that title.

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See also:

30 Oct 00 | UK Politics
Portillo hints at 8bn tax cuts
05 Sep 00 | UK Politics
Rivals take aim at Tory plans
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