Blair confronts critics of 10p tax band policy

Budget countdown: Wrangle over 'fairness' of cuts and allowances

PATRICIA WYNN DAVIES

Political Correspondent

Tony Blair, the Labour leader, was forced into a defence of his shadow Chancellor, Gordon Brown, yesterday, insisting that the goal of a 10p tax starter band would be a "fair" tax cut.

The assertion came amid renewed rumblings of concern among some Shadow Cabinet members that Mr Brown was putting forward plans in their name without consultation.

Mr Blair was speaking at the Association of British Editors' annual dinner, in the wake of a barrage of ridicule from Brian Mawhinney, the Tory party chairman - and more serious criticisms of the independent Institute for Fiscal Studies, which says the most progressive way to cut income tax is to raise allowances.

Mr Brown insisted in a letter to Dr Mawhinney yesterday that the Government's aim of abolishing capital gains and inheritance tax would be "far less fair" than his 10 pence tax.

The Liberal Democrats, in their alternative Budget, and tax advisers Ernst & Young both swung firmly behind lower allowances as the fairest and most effective way of lifting people out of the poverty trap.

Paddy Ashdown, the Liberal Democrat leader, vowed that his party would vote against income tax cuts in next week's Budget, unless they were matched by significant increases in education spending that went beyond the pounds 800m believed to be on offer, but which Mr Ashdown said would only make up for under-funding last year. Dr Mawhinney meanwhile held a news conference to dub Labour the "Oliver Twist party - always demanding more", and produced a survey claiming Labour backbenchers had made 50 calls for more spending in the space of one week in the Commons.

After angry Commons exchanges with John Major at Prime Minister's Questions, Mr Blair said the Budget would be the Tories' last throw of the dice. "The fact that it is seen like that - not least by their own MPs - is an indication of their weakness."