Portillo: £20bn claim wrong

Tory sums are in the spotlight

Shadow chancellor Michael Portillo has said his deputy's talk of plans to cut tax by £20bn in five years was wrong.

Oliver Letwin, the Tory shadow treasury chief spokesman, has confirmed he was the source behind a Financial Times article which put the tax cut level way beyond the £8bn manifesto pledge.

While he denies mentioning the £20bn figure, Mr Letwin says the original story was a "perfectly accurate representation" of his comments.

Labour and the Liberal Democrats have argued the comments show Conservative economic plans are in chaos.

Cuts and growth

In the aftermath of its original story, the FT published further comments by Mr Letwin.

Labour put out "wanted" posters for Letwin

In them, he said: "You've got a progression which goes four, eight, 12, 16, 20 billion pounds.

"It is 190% realistic to cut spending growth in this way."

Mr Portillo was pressed on the issue in a live debate on BBC1's On The Record programme.

"The figures are not right at all," he said.

"I have made it perfectly clear that in the first Budget I am only committed to £2.2bn worth of tax cuts and that is to produce the reduction in tax on fuel.

"At the end of my second year I will have produced £8bn worth of savings against government spending plans and I would deliver £8bn of tax cuts.

"Beyond that period we will be able to go on reducing taxes."

Asked whether the newspaper had got it wrong, Mr Portillo replied: "Because I wasn't there it is impossible to judge, but William Hague and I make economic policy."

Labour chief treasury secretary Andrew Smith said Mr Letwin had "let the cat out of the bag".

Taylor attacks "something for nothing" politics

He said Mr Letwin's comments showed that far from being prudent, the Tories were planning £20bn in spending cuts.

Liberal Democrat treasury spokesman Matthew Taylor wrote to William Hague on Sunday demanding he either back Mr Letwin on the £20bn figure or sack him.

National Insurance row

Mr Portillo turned his fire on Chancellor Gordon Brown over Labour's tax plans.

"We saw him on television this morning giving no guarantee that he wouldn't jack up National Insurance Contributions.

"That could cost someone earning £35,000-a-year, another £500 a year effectively of tax, of National Insurance contributions."

Mr Smith insisted Labour had kept its tax promises, despite Tory claims that the tax burden had risen by 3% of national income.

"Our instinct is not to be a tax raising party, but we do recognise that things have to be paid for," he said.

"It's why I said earlier that no responsible chancellor could make blanket commitments about every tax."

For the Lib Dems, Mr Taylor argued there could not be "something for nothing".

He argued there needed to be modest tax rises to improve public services.