TONY BLAIR promised yesterday to create the "best health service in Europe", preparing the ground for a tax-raising Budget next week.
In an interview with The Independent, the Prime Minister sought to head off criticism that Gordon Brown would unveil an "Old Labour" Budget on Wednesday, saying: "We are at a fundamental point of decision for the future of the NHS."
Mr Blair also fuelled speculation that he intends to call a euro referendum by saying: "As I've gone on as Prime Minister I have become more than ever convinced that Britain's rightful place is at the centre of Europe. I believe that. I think it's a necessary thing for the country. Having said that, it's not sensible to go into the single currency unless the economic tests are met."
He believed some people who had opposed the single currency had warmed to it since its January launch. "A lot of people who may have been afraid in principle are now less so as a result of it being there."
Although the Prime Minister refused to discuss the detail of next week's Budget, he said Labour's goal was to make the NHS "the best insurance system for health care" - his clearest hint that the cash boost would be funded partly by an increase in national insurance contributions. Mr Brown is expected to raise taxes by at least pounds 5bn a year.
The Prime Minister denied that the Budget would mean a U-turn for New Labour, which dumped the policy of tax rises associated with Old Labour and has cut the basic rate from 23p to 22p in the pound.
Mr Blair argued that "tough choices" had been needed in Labour's first term to put the economy right. In the second term, the "tough choices" had involved investment in and reform of public services. "It is absolutely right that you reduce tax when you can. But we have never done it at the expense of investment in public services," he said. …