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Tuesday, 15 May, 2001, 15:12 GMT

Lib Dems' big tax gambit

The Liberal Democrats have published their manifesto promising to raise taxes to fund an extra 9.5bn for education, health, police and pensioners.

" This manifesto offers Britain a real chance for real change "
Charles Kennedy

Party leader Charles Kennedy said the money would pay for 7,500 more nurses and midwives, an extra 2,500 training places for doctors, 5,000 secondary teachers and 6,000 police officers.

Meanwhile, a row has broken out over a hard-hitting Conservative election broadcast, which claims that Labour has let violent criminals out of prison to reoffend.

And Chancellor Gordon Brown has renewed his attacks on Conservative tax and spending plans, saying the Tories "20bn cuts" would be a disaster for the economy and public services.

Shadow chancellor Michael Portillo has confirmed reports that the party is planning tax cuts in excess of the 8bn already announced.

He dismissed suggestions that cuts could total 20bn over four years saying it was a figure he did not recognise.

'Big priorities'

The Lib Dems say their proposal to increase the basic rate of income tax by one penny and introduce a 50% tax on earnings over 100,000 are honest.

As well as its main pledges, the party would also increase the basic state pension and abolish tuition fees for students in higher education.

"We know these are the big priorities for the overwhelming majority of people in our country today," said Mr Kennedy.

"That's why we are not afraid to be honest and ask those who can afford it to pay a small price for a big benefit."

Mr Kennedy said the party's policies were underpinned by the principles of "freedom, justice and honesty".

"Three simple words. These sum up what the Liberal Democrats stand for."

He added: "Our policies can make a real difference. This manifesto offers Britain a real chance for real change."

Shadow foreign secretary Francis Maude hit back, saying: "The Lib Dems have presented a fantasy menu of election pledges which are simply unachievable.

"Their pledges on education and pensions alone do not even come near to adding up. These are worthless pledges chasing wasted votes."

Labour also attacked the plans. Chief Secretary to the Treasury Andrew Smith said the Lib Dems were making "wild promises".

He added: "It's the usual raft of spending commitments, they couldn't pay for that would ruin the economy."

Tory tax cuts

Elsewhere on the election front, Labour is trying to maintain pressure on the Conservatives, ahead of the publication of its manifesto on Wednesday.

Mr Brown called on the Tories to explain where they would find the money for 20bn tax cuts.

Speaking at Labour's daily news conference, he said: "Nobody will believe you can cut 20bn from public spending without cutting key services."

Mr Portillo - who had earlier unveiled the latest poster attack on tax - confirmed that the Tories were planning cuts in excess of the 8bn already announced but refused to disclose the total figure.

"We will go on cutting taxes throughout parliament. We would go on and tackle inheritance tax, the higher rate of income tax," he said.

He denied the cuts would hit public services and said they would be achieved through savings on public spending.

Both Prime Minister Tony Blair and Conservative leader William Hague are hitting the campaign trail on Tuesday.

Mr Blair is in the north of England where he is expected to tell business leaders later on Tuesday that Labour's planned investment in public services will produce benefits for them too.

Mr Hague is in Birmingham where he launched the party's mini-manifesto on disability.

Film furore

The first Tory election broadcast of the campaign has provoked controversy.

The film claims rapists are among the violent criminals Labour has let out of prison early to offend again.

Home Office Minister Paul Boateng described the broadcast as "dire and desperate".

"This is a deliberate distortion and it's very damaging to them, to the party that is so desperate that it has to resort to these kind of tactics", he told BBC News.

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