The British Prime Minister, Mr Blair, yesterday fought off a sustained Conservative attack on his government's rising tax take, defiantly insisting that he had "no apology" to make for cutting an inherited £28 billion debt and improving public services during his first two years in office.
During rowdy Commons exchanges just a week before the budget - but in conditions more akin to the opening shots of an election campaign - the Tory leader, Mr William Hague, branded Labour's promise not to raise taxes "a total, bare-faced election lie" and accused Mr Blair of having "systematically and deliberately" broken pre-election pledges not to raise them.
The exchanges followed the government's first admission that the tax burden has increased since Labour took office in 1997. The admission on Tuesday by the Prime Minister's official spokesman was being interpreted as a significant shift in Labour's presentation of its economic policy, and marked a deliberate tilt to party supporters in Labour's "heartland" constituencies amid mounting ministerial concern about alienation and apathy among traditional supporters.
In the first year of Mr Blair's government, tax and national insurance contributions claimed 36.5 per cent of gross domestic product. In 1998-1999 this rose to 37.4 per cent, and is projected at 37 per cent for the current financial year. The Treasury forecast is that the burden will fall to 36.8 per cent in 2000/2001 before rising again, to 37.2 per cent, in 2001-02, almost certainly general election year.
Seizing on the government's admission, following two years of repeated insistence by the Prime Minister and the Chancellor that taxes were actually coming down, Mr Hague demanded: "In this new spirit of honesty from your spokesman, will you admit that Labour's promises on tax at the last election were a total barefaced election lie?"
Mr Blair told him he would not. "I certainly won't," he replied to loud Labour cheers.
"We promised we would not raise the basic, standard or higher rates of income tax and we kept that promise."
For the first two years, he said, the government's duty was to cut the huge budget deficit it had inherited, and it had done so.
"We inherited a national debt double (what it is today), a borrowing requirement of £28 billion," Mr Blair said.
"When we came to office we were paying more under Tory plans on interest payments on that debt than we were spending on the whole of the schools system for the whole of the United Kingdom."
Defending his government's record, Mr Blair said: "Now the tax burden is falling, this year and again next year. For the first time in decades the economy has slowed without a recession. Debt repayments £4 billion less this year, money that goes to public services. Interest rates half what they were for years under the Tories; 800,000 more jobs; living standards higher; more takehome pay. We are proud of our economic record."
And in a playful attack on Mr Hague's latest speech on the moral necessity to cut taxes, Mr Blair turned the tables, listing the increase in the tax burden from 36.3 per cent to 37.6 per cent over a three-year period when Mr Hague was a member of the last Conservative government.
"Were you immoral?" he demanded.
And he continued: "We can simply look at the Tory record. If it is immoral to raise taxes ever, then the last Tory government was immoral." And to delight on the Labour benches he added: "I've looked at the record under Margaret Thatcher. The tax burden rose by 3 per cent. Was she immoral?"
Mr Hague quoted a list of independent organisations showing that the tax burden would rise.
But Mr Blair replied: "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 three million unemployed? We know Tory morality. Tax cuts for a few at the top, boom-and-bust for the rest of us."