Blair paves way for Budget tax rises

Tony Blair has paved the way for tax rises to pay for the NHS and other public services in Wednesday's Budget. Writing in the Observer newspaper, the prime minister says the public realise they cannot have world class services if they are not prepared to pay for them.

Britain must make a choice between the tax cuts promised by the Conservatives and investment in public services offered by Labour, he said.

The Conservatives say Labour's extra millions for the NHS will be wasted without wholesale reform of the system.

Tax commitment
In his article, Mr Blair says Chancellor Gordon Brown will "lay the foundations for further investment" in his Budget speech on Wednesday.

There is speculation Mr Brown is planning tax rises of up to Ј7.5bn a year to pay for massive extra spending on the NHS.

It is thought this will be largely achieved through increases in National Insurance (NI), but the Treasury has refused to comment on Mr Brown's intentions.

The Wanless Report into NHS funding - to be published on Wednesday - is expected to endorse Labour's commitment to paying for health through general taxation.

"We accept that we need to spend more on health but money alone won't do the trick"

Michael Howard, shadow chancellor

The Tories are publishing their own version of the Wanless Report on Monday, which is expected to make the case for borrowing ideas - such as social insurance schemes - from other countries.

'Bottomless pit'
Shadow Chancellor Michael Howard said: "There are clearly lessons to be learned from the way other countries do things.

"In Germany they just don't have waiting lists. In Denmark, there is a guarantee that you will be treated four weeks after you have seen your GP," he told BBC Radio 4's The World This Weekend.

He said the Tories remained "committed to the ideals of the NHS."

"We accept that we need to spend more on health but money alone won't do the trick," he said.

" I have confidence we can win that political battle

Prime Minister Tony Blair

The Tories have yet to reveal their policy proposals on health, but Mr Howard said they would still be opposing any Labour attempt to fund improvements by increased taxation.

It was no use "pouring money into the bottomless pit of unreformed public services", he said.

'Political battle'
In his article for The Observer, Mr Blair said Wednesday's Budget will create the conditions for the "vital next step" for the Labour Party and the country.