Hague attacks budget

Tax-raising Budget Claims Hague

"This is a tax-raising Budget. Tax rises Labour denied they would introduce before the election," said Mr Hague, opening the debate on the Budget.

The opposition leader said the tax rises were to fill the £1.5 billion "black hole" in Labour's plans identified during the election by the Tories.

"You have blown a new black hole in the credibility of the Labour Party," said Mr Hague. He told the Chancellor he had put forward "a tax startegy that halves the blame for you and doubles the pain for everyone else".

Mr Hague dubbed the windfall tax a "savings tax by another name," shrugging aside the Chancellor's claim that it would have no impact on prices or investment and warned it would hit pensioners, low income families and shareholders.

"It is a savings tax by another name and it is current shareholders who will foot the bill," he said. "Far from taxing excess profits, the Government is taxing those people now unlucky enough to be holding the parcel when the music stops."

"Anyone with a pension, anyone with an insurance policy, anyone who is working hard to build up a nest egg for the future, will be hit by the windfall tax," he said.

The Conservative leader also claimed that pensioners would be badly hit by the Budget. "It is clear that this Budget delivers a double-whammy against pensioners," he told the Commons.

"It is a smash-and-grab raid on pension funds in this country and it is a cynical betrayal of the millions who have built up penions and now see them devalued," he stressed.

As for the measures on the housing market, Mr Hague said Labour had never had sympathy for home ownership, adding; "They are clearly not going to start being in sympathy with it today."

The Shadow Chancellor, Peter Lilley, and the Liberal Democrat treasury spokesman, Malcolm Bruce, discuss the budget on Newsnight - Dur 3' 50"

For the Liberal Democrats, its leader Paddy Ashdown said there was much in the Budget with which his party could agree.

But he accused Labour of its election promises. "You cannot rebuild trust by ruling out income tax increases for press headlines while keeping up your sleeve hidden taxes which will hit the ordinary taxpayer just as much afterwards," Mr Ashdown told the Commons.

"You cannot rebuild trust in tax by saying `enough is enough' to 22 Tory tax rises and then adding to them in your very first Budget," he added.

Mr Ashdown welcomed the extra money announced by Mr Brown for the NHS and education. But he criticised the fact that this would not come until next year, warning that the services faced crisis this winter.

"A Budget that claims to be for the long term fails if it fails to understand that immediately they have to invest in education if they are to preserve an education service worth having for the extra investment that they might make in years to come," he stressed.