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CBI Conference: Europe - Joining euro `will put 10% on taxes'

Philip Thornton Economics Correspondent
Tuesday 02 November 1999 19:02 EST
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TAXES WOULD have to rise 10 per cent if Britain scrapped the pound and joined the single currency, Michael Portillo claimed.

The former Tory cabinet minister criticised the Government's policy on the euro and dismissed charges that opponents of the euro were "extremists" who wanted Britain out of the EU.

"This is a fantastic leap in the dark," he told the conference . "I think that the extremist position ... is the one that says, as a leap of faith, we are all going to jump into something that has never been done before and therefore which has never succeeded."

Lord Marshall of Knightsbridge, chairman of British Airways, had described senior Tories who wanted to pull out of Europe as "extremists".

Mr Portillo was speaking in a debate on the euro just hours before he was due to learn whether he had been chosen as the Conservative candidate for the safe Tory seat of Kensington and Chelsea.

Rejecting claims that he was anti-European and stressing his own background as a "half caste" of part-Spanish and part-British extraction, Mr Portillo was careful to stick to the line outlined by William Hague, the party leader, on Monday.

He said the members of euroland would not accept Britain unless it abolished lower taxes, insurance contributions and social security benefits that could be seen as unfair competition. "They will put tremendous pressure on the United Kingdom to increase its rates of taxation to continental levels and that would mean an increase of something like 10 per cent."

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