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 A/V REPORTS
The BBC's Philippa Thomas
"The Tories say that Labour is in league with Brussels over tax hikes"
 real 56k

Chancellor Gordon Brown
"William Hague has had at least six different positions in his attitude to the single currency"
 real 56k

Head to head on Europe
Labour's Robin Cook and Conservative Francis Maude
 real 28k

Lib Dem candidate Malcolm Bruce
"We believe the British public should have a final decision in a referendum"
 real 56k

Wednesday, 23 May, 2001, 15:15 GMT 16:15 UK
Parties battle over Europe
Tony Blair visits a classroom in Southampton
Mr Blair is pushing education but is asked about tax
A bitter row between Labour and the Conservatives on Europe and tax is continuing to dominate the election debate.

Labour dismissed a Tory claim that a leaked European Commission document showed there were plans to harmonise tax across the EU - leading to rises in the UK.

The claim was also challenged by the European Commission itself, which said on Wednesday there were no plans to harmonise tax systems among member states.


It is a complete lie and a Tory tax smear to suggest Labour has any proposal in that direction (increase VAT)

Gordon Brown
The debate eclipsed other issues - to the clear irritation of Labour leader Tony Blair, who was launching his party's manifesto for schools, and the Liberal Democrats, who presented proposals for more investment in the NHS.

The campaigning follows Lady Thatcher's dramatic entry into the election on Tuesday, going beyond her party's policy by saying she would never scrap the pound.

Zero-rated

Speaking on a visit to Newark-on-Trent in Nottinghamshire, Conservative leader William Hague claimed the commission document showed that the UK's zero-VAT rating on food, children's clothes, books and newspapers was under threat.

He added: "Not only does Labour plan to increase taxes but the European Commission plans to remove the right for Britain to reduce its own taxes."

Lady Thatcher and Ffion Hague
Tory first ladies, past and present
But Labour said the purpose of the paper, being discussed by the commission on Wednesday, was to lower taxes in Europe.

And any attempt to harmonise tax rates by the back door would be firmly resisted using the UK's veto negotiated at the Nice summit.

Chancellor Gordon Brown said: "It is a complete lie and a Tory tax smear to suggest Labour has any proposal in that direction."

And he turned his fire on the Conservatives, saying they were "split asunder" on Europe.

Lib Dem leader Charles Kennedy
Charles Kennedy launched Lib Dem health proposals
"We can confirm that by this afternoon there are now 80 candidates who have broken from the official line and 23 have already called for renegotiating or complete withdrawal from the EU," he said.

"The truth is that the Tories are becoming a party increasingly defined by division on Europe."

Liberal Democrat chairman Malcolm Bruce criticised both Labour and Conservative policy on Europe.

"The difference between the Liberal Democrats, who have a clear position on this, and the other two parties is that their confusion gives no lead at all to business planners," said Mr Bruce.

Mr Hague was pressed repeatedly by journalists at the party's morning news conference to guarantee that he would not raise and extend the scope of VAT.

Mr Hague refused, saying only that his party would cut taxes.

Education 'boost'

Mr Blair went to Southampton University to launch his education plan, Realising the Talents of All.

Outlining 10 "key points" for investment and reform, the document promises more specialist comprehensives, city academies and church schools in a second term of a Labour government.

But Mr Blair was tackled repeatedly on tax and Europe during questions from journalists prompting the reply: "I find it extraordinary that we can have an education launch and education isn't the issue."

Lib Dem leader Charles Kennedy was at a hospital in Oldham, Greater Manchester, pledging he would invest more in scans and tests to prevent the "human misery" caused by not tackling illness early.

The party promises 27,500 extra nurses and 4,600 more doctors.

Later, a European Commission statement said that community decisions on tax would continue to need approval by all member countries.

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