UK parties tussle over tax ahead of election call

Britain's leading political parties attacked each other's tax policies before the widely anticipated official start of an election campaign early next week.

UK parties tussle over tax ahead of election call

Britain's leading political parties attacked each other's tax policies on Sunday before the widely anticipated official start of an election campaign early next week.

Prime Minister Gordon Brown is expected to announce on Tuesday that Britons will vote in parliamentary polls on May 6.

The opposition Conservatives, out of power for 13 years, are ahead of the Labour government in opinion surveys and are favourites to win.

The election will be fought over the economy, with the two main parties differing over the timing of the fiscal squeeze needed to tackle a huge budget deficit, as well as disagreeing on the balance between tax rises and spending cuts.

Business Secretary Peter Mandelson accused the Conservatives of "peddling a deception" over a promise to reverse a rise in National Insurance payroll tax planned for 2011.

The increase is designed to help to reduce the budget deficit, approaching 12 percent of gross domestic product.

Mandelson told Sky News that the Conservatives had not explained how the tax change could be funded. If elected they would have to raise value-added tax on most goods and services to 20 percent from 17.5 percent now.

"The Conservatives know fully well that if they are cancelling one tax increase they would need to set out where the alternative tax increase will come from. I can't see any alternative but to go for a hefty VAT increase," he said.

Conservative Leader David Cameron said the National Insurance move was not a "tax giveaway".

"This is just stopping one of Labour's tax rises and saying, frankly, 'They have got it wrong'," he told Sky News.

"We will be borrowing and spending less than Labour would in 2010 and that enables us, not to stop all of the tax rises, but to prioritise as progressive Conservatives the tax rise that hits the economy, that hits jobs."

Cameron said he had no doubt that the election would be called next week. "I think it looks like May 6 for election day, and I am sure the prime minister will go to the palace on Tuesday or Wednesday and our campaign is ready to get out there and roll."

British prime ministers must ask the monarch to dissolve parliament. Should Brown fulfil expectations and visit Queen Elizabeth next week, it will mark the formal start of the election campaign.

Mandelson hinted that Brown's election announcement was imminent, telling Sky News: "I don't think you will have too much longer to wait."


Reuters

Güncelleme Tarihi: 04 Nisan 2010, 18:15

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