Blair and Hague clash over pledge on 'no tax rises'

William Hague accused the Prime Minister yesterday of "deliberately and systematically" breaking promises not to raise taxes.

The Tory leader seized on comments made by Alastair Campbell, the Prime Minister's official spokesman, admitting that the tax burden had risen slightly under Labour.

But, during a bitter row at Prime Minister's questions, Mr Blair said the Government had kept its pledge not to raise the basic, standard or higher rates of income tax and had delivered a stable economy for the first time in years.

Defending the Government's decision to concentrate on cutting the national deficit, he said: "I make no apology for saying, yes, in those first two years we cut the budget deficit and we were right to do so."

He added: "This financial year, however, the tax burden falls and does again next year. Future years obviously depend on budget decisions. But there will be no risks taken with the strength and stability of the economy."

But Mr Hague insisted that the Prime Minister had broken his pre-election pledges not to raise taxes. "Yesterday, your press secretary said the Government had increased taxes. So in this new spirit of honesty from your spokesman, will you admit that Labour's promises on taxes at the election were a total bare-faced election lie?

"It wasn't a joke. It was systematic, dishonest and deliberately misleading. Yesterday, your press secretary admitted that the tax burden had risen, so will you now admit that you've broken that whole long list of promises?"

But Mr Blair, seeking to exploit the Government's economic record stressed that, for the "first time in decades", the economy had slowed without a recession.

"Debt repayments - £4bn less this year, money that goes to public services. Interest rates - half of what they were for years under the Tories; 800,000 more jobs; higher living standards; more take home pay. We are proud of our economic record."

Mr Blair told the Tory leader: "Yesterday you said it was the moral duty of government always to cut taxes. I say a return to boom and bust is not moral. What's moral about 3 million unemployed? We know Tory morality. Tax cuts for a few at the top, boom and bust for the rest of us.

"We can simply look at the Tory record. If it is immoral to raise taxes ever, then the last Tory Government was immoral.

"I've looked at the record under Margaret Thatcher. The tax burden rose by 3 per cent. Was she immoral?"

However, launching another attack, Mr Hague hit back: "Your government has increased taxes on mortgages and marriages, petrol and pensions, savers and self-employed, large businesses and small businesses, air travel and insurance, home buying and charities.

"The result is not only that taxes have gone up but that they are continuing to rise. So will you admit not only that you've broken your promise not to raise taxation, but that you are continuing to break that promise?

"What's moral about breaking every promise on taxation and delivering worse public services at the same time?"