Major Vows To Introduce Radical Tax Breaks

British Prime Minister John Major, whose Conservative party is trailing in the polls ahead of a May 1 election, on Wednesday promised tax cuts and said his policies had ensured the country was booming.

Major, trying to dispel the image that his party has run out of ideas after 18 years in power, vowed to cut the basic rate of income tax to 20 per cent from 23 per cent.

He also promised a 1.2 billion ($2 billion) tax break for people who stayed at home to take care of childen or sick relatives, saying the proposal would strengthen family values and help those in need.

 

What I have done is provide an incentive for families to be able to meet obligations with dignity, he told BBC radio just before the Conservatives released their election manifesto.

The opposition Labour party immediately attacked the tax break, saying it could cost 5.2 billion if fully implemented.

The Conservative manifesto would contain tax plans costing at least 13 billion a year, it added.

Labour economics spokesman Gordon Brown said the Prime Minister was introducing a new element in the debate between the two parties, which had both previously said they would implement tax cuts only when the economy could afford them.

The question Mr Major must answer is: Where is the money for his tax changes coming from? Why is he risking economic recovery and higher interest rates by a reckless and desperate set of promises?

Labour is trying to shed its past reputation for high spending and Brown said the partys manifesto due to be launched on Thursday would contain no promises which would involve extra taxes.

He also warned against complacency, pointing to an opinion poll for the Guardian newspaper which showed the partys lead over the Conservatives had shrunk to 14 percentage points.

The same previous poll in March gave Labour an 18 point lead.

The British economy is growing well after recovering from a deep recession in the early 1990s but Major dismissed as groundless concerns that the economy was overheating. There is no sign that there is an uncontrolled boom. Ive made it clear right the way through recent years that we were not going to artificially stimulate the economy to produce a boom, he said.

Labour has also made capital from deep Conservative splits over policy towards the European Union and in particular whether the country should sign up to a single European currency. But Major vowed not to play partisan politics by ruling out membership of the so-called Euro, saying he had to put the interests of country ahead of party.

The Conservatives say Britain is highly unlikely to sign up to the single currency, due to be introduced on January 1 1999, but has vowed to take part in talks on bringing it in.

Since winning the last election in 1992 Major has had to deal with sustained protests from so-called Eurosceptics within his party who fear that Britain would become a slave to its European partners if it signed up to a single currency.