Newspaper article The Evening Standard (London, England)

Tax Rises Are Threat to Trade Says Blair in Warning to Brown

Newspaper article The Evening Standard (London, England)

Tax Rises Are Threat to Trade Says Blair in Warning to Brown

Article excerpt

Byline: PATRICK HENNESSY

TONY BLAIR today sent out a stern warning that future tax rises would harm British business in its battle to remain competitive.

His comments appeared to be a clear message to Chancellor Gordon Brown that higher taxes would be politically dangerous. However, they were also aimed squarely at other Cabinet ministers -- such as Commons leader Peter Hain - who are advocating raising income tax rates.

The Chancellor has faced warnings from the City that falling revenues mean he will either have to put up taxes or increase borrowing, or both, to maintain growth. Mr Blair used a newspaper interview to endorse Mr Brown's prediction that the way ahead will be "tough".

But he repeatedly hit out at higher taxation, lambasting a Liberal Democrat plan to bring in a new 50 per cent top rate as likely to "destroy the competitiveness of the economy".

Mr Blair stressed the threat posed to Britain from countries with surging economies such as China and India.

He warned in The Times: "You have also got to make sure that you remain competitive in your economy, includingon the levels of taxation." In a wide-ranging interview, Mr Blair also reasserted his opposition to calling a referendum on the European Union's new constitution. He refused to budge an inch on the issue, claiming such a move would "convulse" his government for months.

With the Tories launching a major drive to get a petition with one million signatures backing a national vote, the Prime Minister said: "We are taken as having sold something out - we have not." He said under the new blueprint key decisions on tax, foreign policy and defence would still be taken by individual governments.

Mr Blair refused to rise to the bait after Iain Duncan Smith, in his keynote conference speech last week, labelled him a liar over his account of events leading up to the death of weapons expert David Kelly.

He said he thought voters preferred politicians to "play the ball rather than the man" and derided the Tories, claiming Labour was the "only show in town".

The Prime Minister launched a furious defence of his plans to allow universities to charge "top-up" tuition fees - claiming Britain needed vastly increased funding on research. …

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