Tory right delivers tax caution

KENNETH CLARKE, the Chancellor, was warned by Tory backbenchers last night not to put up taxes in his November Budget to reduce the pounds 50bn public sector deficit, writes Colin Brown.

The officers of the Tory backbench finance committee, dominated by right-wingers, met Mr Clarke in private at Westminster to emphasise their opposition to raising more revenue from taxation.

They impressed on the Chancellor the need to cut public expenditure below the pounds 253.6bn ceiling fixed by the Cabinet, and strongly opposed increases in income tax, even by the 'sleight of hand' of cutting allowances in real terms. But they privately admitted that they would not 'go to the stake' if Mr Clarke imposed VAT on newspapers or sewerage services.

The meeting came after the Treasury disclosed that uncollected taxes had soared to pounds 1.7bn last year - the equivalent of 1p off income tax.

N-TEST PAYMENT: The Government is paying pounds 20m to the Australian government in final settlement of claims over the rehabilitation of the former British nuclear weapon test sites at Maralinga and Emu in South Australia, Jeremy Hanley, the armed forces minister, said.

BUSINESS TODAY: Commons: Northern Ireland questions; Questions to the Prime Minister. Debate on law and order.

Lords: Asylum and Immigration Appeals Bill, Commons amendment; Railways Bill, committee; Debate on school tests.