Brown mounts Budget defence

CHANCELLOR Gordon Brown toured television studios this morning to launch a rearguard defensive of his Budget amid mounting claims that Britain faces substantial tax rises after the General Election.

Tax accountants today described the Budget as having done little of substance and said much of it amounted to a 'cynical pre-election ploy'. The Conservatives, meanwhile, claimed that Brown's tax and spending plans would require another £10bn-£11bn in new taxes after the election, now widely expected on 5 May.

But Brown denied the claims, insisting that all his spending plans were affordable. He added: 'We are meeting all our fiscal rules, we are in a far better fiscal position than other countries, including America, Japan and Germany and other countries that have higher deficits and higher debts.'

The Chancellor is determined to 'sell' the Budget to the electorate as evidence grows that the economy will be centre-stage at the election. The Budget was seen as a blatant wooing of the grey vote by Labour, particularly as pensioners have complained loudly about rising levels of council tax. They will now get a £200 rebate as the Chancellor took one of the Conservatives' own pledges and used it for his own ends.

Brown attacked the Conservatives today, claiming that they were planning spending cuts of up to £35bn. He added: 'I will take no risks with the stability of the economy, or the stability of the public finances. There was a modest fiscal tightening in the Budget, which I think that people found unusual for Chancellors in advance of General Elections.'

Accountants, however, were more sceptical. Mike Warburton, partner at business advisers Grant Thornton, said: 'As ever with the Budget, the devil is in the detail. All these initiatives may appear positive news, but many fail to stand up to close scrutiny.'

More people will be dragged into higher-rate tax bands as a result of Gordon Brown's failure to increase personal allowances and income tax bands by just the rate of inflation. The Chancellor's failure to push through a substantial increase in the inheritance tax threshold also means many middle-earning households will be caught by the tax net simply because the value of their homes have increased considerably.

The number of estates paying IHT has more than doubled over the period that Labour has been in power and is still increasing despite the Chancellor raising the threshold above inflation. The estimated number of IHT taxpayers in 2005-206 is 37,000, whereas when Labour came to power it was only 18,000.

The Prime Minister and Chancellor are today unveiling posters contrasting Labour's plans with Conservative cuts. The party hopes that measures announced by Brown yesterday can help them regain the initiative after recent Tory poll gains. But focus will also be on the body language of the Downing Street neighbours following repeated suggestions that he will finally be prised from the Treasury after the election.

Shadow Chancellor Oliver Letwin told the BBC the Chancellor was borrowing £168bn over the next five years. 'Even if you believe his sums ? that means he is borrowing and spending too much and therefore he is going to have to raise taxes after the election if Mr Blair is re-elected. That is the real problem.'