Blair stakes all on transforming the health service

Tony Blair staked his political future last night on the success of this week's tax-raising Budget in transforming the National Health Service.

In a series of television interviews, the Prime Minister was forced on to the defensive over whether the Budget's 1p rise in national insurance contributions breached the promises he made during last year's general election campaign.

Mr Blair raised the stakes by inviting the voters to judge him at the next general election on whether the Government delivers real improvements to the health service. He said: "If it doesn't work I am sure that people will judge me harshly on it, but I intend it to work. Yes, I carry the can and I am happy to be judged on it. But I am 100 per cent confident that we can win this debate because I am 100 per cent confident that it is the right thing to do."

Mr Blair was repeatedly challenged over whether the 1p national insurance surcharge on all earnings above the £30,940 ceiling from next April breached the promises made at the election. He insisted: "We made very specific commitments not to raise the standard or top rates of income tax and we kept those commitments.

"Half the election campaign was about us refusing to give additional commitments because we hadn't written the Budget then. The very issue that there was at the last election campaign was why wouldn't we sit down and rule out tax increases in all these other areas and we specifically refused to do so."

The Prime Minister argued that the Government did not know it would need to raise taxes until it received the interim report in November on the NHS's long-term funding needs by Derek Wanless, the former NatWest chief executive.

He refused to be drawn on whether the Government would put up taxes again but he insisted that the £40.2bn extra investment in the NHS was "fully funded" by the increases announced in the Budget.

Mr Blair's drive to sell Gordon Brown's package was undermined by further evidence of a bitter battle over funding between the Home Office and the Treasury. Lord Rooker, a Home Office minister, apologised yesterday for launching a remarkable attack on Treasury "wreckers" and "penny-pinchers" during a debate in the Lords. He said on Tuesday: "The Treasury has virtually wrecked every good idea I have come across in the past five years due to the narrow, short-term view it takes."

David Blunkett, the Home Secretary, who clashed with Mr Brown in the run-up to the Budget, said: "I have spoken personally to Lord Rooker who assured me of his absolute commitment to the overall policies and priorities of the Government.

"Following our conversation he has written to the Chancellor expressing regard and offering his apologies."

The Treasury had earlier reacted with disdain to Lord Rooker's remarks. A Treasury source said: "We are too busy to bother commenting on Lord Rooker and have much more important things to worry about."

Growing criticism of the Budget from business leaders was joined yesterday by local authorities, who are furious at government plans to "fine" them if they do not meet targets to reduce delays in old people being released from hospital into social care. Brian Briscoe, chief executive of the Local Government Association, said local authorities were spending £1bn more than the Government had provided on social care. He said: "We need to work closely with the Government not in a system in which we are threatened with penalties, but in a system where we can work together in order to make sure that people are properly cared for."