Labour pledges to `win the argument' on Europe

Europe and the economy were key election battlegrounds in the British general election campaign yesterday as the political parties…

Europe and the economy were key election battlegrounds in the British general election campaign yesterday as the political parties geared up for the final push ahead of polling day.

As a key player in Europe, Labour promised it would "win the debate" on British terms and cast itself as the party for business, while the Conservatives accused Labour of dishonesty over EU tax plans and a future referendum on the euro.

Seizing on yesterday's speech by the European Commission President, Mr Romano Prodi, in which he proposed a new EU-wide tax to directly fund its operation, the Conservative leader, Mr William Hague, said his intervention and that of the French Prime Minister, Mr Lionel Jospin, had helped the Tories.

Addressing a "Keep the Pound" rally in London, Mr Hague said Mr Prodi and Mr Jospin envisaged "an ever more integrated and centralised Europe" but unlike the Prime Minister, Mr Tony Blair, he told his audience, they were being honest. "At least they are telling us that. Tony Blair will not be honest with the people of this country," Mr Hague said.

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And in his attempt to turn membership of the euro into an election issue, Mr Hague said if Labour was re-elected it would ensure any referendum on the single currency was "loaded against" those campaigning for a No vote.

At Labour's press conference in London, Mr Blair went on the offensive over closer ties with Europe, passionately defending the right of governments with opposing views to argue their case. "We have got to have some confidence as a country in the arguments we are putting forward in Europe," he said.

"This is a country that I believe has got sufficient self-confidence and self-belief to go into Europe and win the argument."

Earlier, claiming Labour was the party of business, Mr Blair and the Chancellor of the Exchequer, Mr Gordon Brown, said Labour in power had delivered low inflation, low interest rates and economic stability.

Introducing the party's manifesto for business by contrasting Labour's promise of stability against the record of a "boom and bust" economy under the Conservatives, Mr Blair said he made "no apologies" for returning to the issue of the economy. "It is New Labour that stands for economic competence, while the Tories pose a risk to our economy," Mr Blair declared.

On the attack over the economy, Mr Hague charged Labour with hitting the poorest families with 45 "stealth taxes", the equivalent of a 10 pence increase in the basic rate of income tax, raising £28 billion for the Treasury since 1997.

The Shadow Chancellor, Mr Michael Portillo, insisted Labour's manifesto for business was "unambitious" and he pledged to save £8 billion on Labour spending plans to reduce taxes for couples with children and pensioners.