UK's political parties lock horns over tax plans

The main political parties are locking horns again over their tax and spending plans as they wait for Gordon Brown to fire the starting gun for the general election campaign.

The Prime Minister is widely expected to go to Buckingham Palace on Tuesday to seek a dissolution of Parliament, setting the stage for an election on May 6.

The Tories are gearing up for the battle ahead by releasing new research highlighting what they said was Mr Brown’s record of raising national insurance (NI) contributions over the past decade.

Mr Brown, in turn, warned that Tory plans to cut public spending this year in order to reverse part of the Government’s NI increase, set for April next year, risked pushing the economy back into a “double dip” recession.

The Conservatives said their calculations showed that the revenue the Treasury received from NI had risen by 22% in real terms since 2001-02, five times the 4% growth in income tax receipts over the same period.

They said that while the amount the average family paid in income tax had risen by £47, from £5,461 in 2001-02 to £5,508, their NI contributions had gone up from £2,725 to £3,239 – an increase of £514.

Shadow chancellor George Osborne, who was poised to unveil the Tories’ latest election campaign poster highlighting the cost of NI under Labour, said that it was Mr Brown’s “favourite stealth tax”.

Mr Brown used his latest podcast on the Downing Street website to argue that it was the Conservatives’ plans to cut spending by £6 billion this year which would jeopardise the pick up in the economy.

And Alistair Darling insisted that his planned rise in National Insurance contributions was vital to the economy and would not cost jobs.

The Chancellor hit out at Tory plans to scrap the bulk of the increase, due to come in next year, and dismissed criticism from business leaders that the move was a “tax on jobs”. He said the NI rise was an essential part of his wider package for consolidating and building on the economic recovery.

Source: Press Association