Tax polls deliver blow for Labour

LABOUR was rocked on Monday night as two polls revealed deep public scepticism about tax rises for the NHS. The findings came amid signs of mounting tensions between Prime Minister Tony Blair and Gordon Brown over the Chancellor's plans to increase taxes by up to £8bn in Wednesday's Budget.

While Brown has insisted taxation is the only way to fund the health service, seven out of ten voters want him to consider alternative methods, according to an ICM poll. The same survey found that just over half of those questioned - 52% - back the current system of funding.

More damagingly, six out of ten voters said they did not believe the NHS would improve if taxes rise. Only 7% think extra money will make things much better. A separate NOP poll found that 49% of voters want tax cuts, compared with just 46% who supported a tax rise to pay for health and education spending.

The results came as Blair and Brown met in an attempt to thrash out the details of a Budget which is expected to revive Labour's tax-and-spend reputation. Downing Street's anxiety that the Chancellor's plans will spark a middle- class backlash were underlined as carefully staged leaks tried to soften the blow of the Treasury's tax-raising plans. Government sources signalled that tax rises would be phased in over a number of years - with no increases until next year at the earliest.

Meanwhile, there were strong hints that petrol duty would be frozen for the second year running in a bid to placate motorists. The Prime Minister is also understood to be pressing Brown to make sure the focus on health does not mean other key public services - education, crime and transport - lose out.

But, in a further blow, the Centre for Economics and Business Research consultancy group warned that big tax rises would have a 'significant detrimental effect on the UK economy'.

The ICM poll for the public policy think-tank Reform found that 70% wanted ministers to 'consider other ways of funding and organising health care in Britain' compared with just 27% who backed Labour's position. While just over half backed a tax-based NHS, 44% favoured an insurance-based scheme.

NOP found that 57% of 16 to 24-year-olds wanted tax cuts, compared with 39% who supported a rise. In contrast, 53% of over-55s backed an increase in tax to invest in public services. Only two in five wanted a cut.

The polls are a boost for the Tories, who called on Monday for a public debate on how best to fund the NHS in the 21st century. Writing in a Conservative pamphlet on alternative health systems, Tory leader Iain Duncan Smith declared: 'The system is not working. We need to learn from other countries if we are to improve the health service in Britain. The problems of the NHS are not just a matter of money. It is the system that is failing. Despite increasing taxes by £100bn since they came to office, [Labour] have failed to deliver any significant improvement. Our goal is to make the NHS the best health service in the world. We must have a system based on need, not on the ability to pay, but that need should be defined by patients working with doctors, not by politicians.'

While the Tories stressed they had not finalised their prescription for a new NHS, their pamphlet said many other health systems were more effective and fairer than the NHS. Waiting lists are virtually unheard of in Germany, while a system of smart cards containing a person's medical records makes it easier for people to choose which doctor they see.

Health Secretary Alan Milburn hit back, claiming the Conservatives were planning to abandon the health service. He said the NHS needed reform but insisted it had to be funded through general taxation.