UK parties hiding the truth on tax rises

Britain's two main political parties - Conservatives and Labour - are not being completely honest with the British public about how much taxes will need to rise after next month's election, a leading independent think tank said on Friday.

Paul Johnson, the director of the Institute for Fiscal Studies (IFS), said "neither is being really honest with the public" as full election campaigning resumes after a break in respect for the victims of Monday's terrorist attack in Manchester.

Prime Minister Theresa May had to make an embarrassing U-turn on Monday on plans to make older Britons pay a greater share of their care costs, and has left the door open to raise income tax and payroll taxes.

"It is likely that the Conservatives would either have to resort to tax or borrowing increases to bail out public services under increasing pressure, or would risk presiding over a decline in the quality of some of those services," Johnson said.

Labour plan to introduce a big rise in taxation to fund public services, including 20,000 extra police officers and extra funding for the NHS, paid for by a hike in corporation tax and increasing tax on individuals earning over 80,000 pounds (91,700 euros) a year.

This would take the tax burden on the economy to its highest in 40 years - though it would not be especially high by the standards of other European economies, the IFS said.

But the tax rises would affect more people than the party's focus on the top five percent of earners might suggest, it said.

"Labour should not pretend that such a step-change could be funded entirely by a small minority at the very top. In particular the large increase in company taxation that they propose would undoubtedly affect a broader group than that," Johnson said.

The think tank’s deputy director, Carl Emmerson, added, "The shame of the two big parties' manifestos is that neither sets out an honest set of choices. Neither addresses the long-term challenges we face. For Labour we can have pretty much everything - free higher education, free childcare, more spending on pay, health, infrastructure."

Turning to the Tory plans, Emmerson said, "The Conservatives simply offer the cuts already promised. Additional funding pledges for the NHS and schools are just confirming that spending would rise in a way broadly consistent with the March budget."

May losing ground to Corbyn

May has seen the Conservatives' lead in opinion polls narrow since she unveiled her party's policy pledges last week.

In a sign the election could be more closely contested than was previously thought, YouGov/Times said on Thursday that support for May's party stood at 43 percent, down 1 percentage from a week ago, while Labour was up 3 points on 38 percent.

A separate poll, conducted after the Tory manifesto launch, found 28 per cent of voters said they were less likely to vote Conservative because of the social care package.

On Friday, Corbyn made a speech in London linking Britain's role in foreign wars to an increase in extremism on home soil and criticized May for cutting police numbers, as he looks to carry his growing momentum towards the June 8 vote.

mds/uhe (Reuters, dpa)