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Cuts call over tax surplus

Sunday 22 October 2000 19:00 EDT
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The Government is building up a huge budget surplus of £16bn, according to a group of economists. The figure is £10bn more than the official estimate.

The Government is building up a huge budget surplus of £16bn, according to a group of economists. The figure is £10bn more than the official estimate.

Ernst & Young's ITEM Club says that the surplus has grown through a rising tax burden, which has curbed consumer spending and harmed businesses.

The Confederation of British Industry urged the Chancellor to use the surplus to cut fuel duties for road hauliers. The CBI estimated that the taxation burden on business had risen by £5 billon a year since Labour came to power.

Its proposals for changes to vehicle excise duty paid by hauliers would mean a special charge to be paid by all lorries, including those from overseas. The CBI also wants Mr Brown to review diesel fuel tax for hauliers.

The ITEM Club uses the Treasury's model of the UK economy for its economic forecasting. Its spokesman, Professor Peter Spencer, said: "The war chest is so brimfull that it is threatening to sink the ship of state."

The shadow Chancellor, Michael Portillo, said: "This report is further evidence of the extent to which Gordon Brown's stealth taxes are weakening the British economy and hitting families and businesses. Labour is taxing Britain too much."

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