'Tax and spend' dominates debate

The defining divisions between Britain's three main political parties were highlighted today as their leaders spent a first weekend on the election trail.

Tax and spending continued to dominate the campaign but they also traded blows on Europe after a senior Tory MP said Britain should never join the euro.

Prime Minister Tony Blair was emphasising Labour's commitment to pensioners with a visit to sheltered accommodation.

Conservative leader William Hague renewed his attack on Labour stealth taxes warning petrol could rise to almost £6 per gallon if they won a second term.

And Charles Kennedy trumpeted the Liberal Democrats 'honest' spending plans, accusing both of making 'great claims' and 'over-inflated allegations'.

Mr Hague faced claims that he had lost control of his party from both the others after Sir Peter Tapsell vowed never to back Britain joining the single European currency in a controversial outburst.

Sir Peter, who nominated Mr Hague for the Tory leadership, also compared German Chancellor Gerhard Shroeder's view of Europe to that of Hitler's.

Tony Blair was joined by wife Cherie for a second day as he visited Carlton House sheltered accommodation in Gedling, Notts.

The visit came after Chancellor Gordon Brown earlier said the Government's sound financial handling had brought pensioners a £4 billion dividend and promised more in a second Labour term.

Labour would continue to 'tackle pensioner poverty, help lower and middle income pensioners who save and ensure all pensioners can share fairly in rising prosperity', he said at the party's daily press briefing.

The minimum income guarantee would ensure that within two years no single pensioner lived on less than £100 a week and no pensioner couple less than £154.

Social Security Secretary Alistair Darling confirmed winter fuel payments would stay at £200 this year.

And he branded Tory plans to offer pensioners a cash alternative to the payment and other benefits such as a free TV licence a 'bureaucratic nightmare' costing more than £100 million in extra administration.

His Tory counterpart David Willetts pledge to match the £200 winter fuel payment this year.

But he said many pensioners were not receiving the cash, with at least 200,000 missing out last year because of an 'arbitrary deadline'.

Pensioners would be unimpressed with Labour's promises, Charles Kennedy said.

'I was talking to a pensioner today who said that they have got long memories of Gordon Brown's 75p pensions increase, a rise which he said added insult to injury,' he said.

Tories insist Labour's pledge not to increase the basic or higher rate of income tax means more 'stealth taxes' to fund spending such as better pensions.

William Hague said the Independent Institute for Fiscal Studies had discovered a £10 billion hole in Labour's plans.

Standing before a petrol tanker carrying a banner saying '£6 a gallon under Labour - Vote Conservative' in Newbury, he warned fuel tax could be used to plug the gap.

'Tony Blair has boxed Gordon Brown in and made him promise in this election that he won't increase income tax rates in the coming parliament,' Mr Hague said.

Mr Hague has pledged a 6p per litre tax cut on petrol in a package paid for by shaving £8 billion from public spending.

The pledge aims to recapture the mood of last year's fuel protests when the Tories took a - brief - lead over Labour for the only time under his leadership.

Protesters who last night staged a brief resurrection of the blockades that kept tankers inside depots and pumps dry have threatened further action.

However, Mr Hague's own tax and spending plans were once again under attack from Gordon Brown today.

The Chancellor returned again to David Willett's apparent admission that £1 billion of the £8 billion savings to fund tax cuts might be unachievable.

Mr Brown said Howard Flight, a member of the shadow treasury team, had added to the 'confusion' by being unable to explain his party's programme and suggesting borrowing could go up under the Tories.

Charles Kennedy turned his attention to local matters with a visit to a remote post office in his Ross, Skye and Inverness West constituency.

However, he also took the opportunity to question both the larger parties spending plans, warning voters could not have 'something for nothing'.

The Lib Dems were 'courting honesty in this campaign', Mr Kennedy said.

'What we are talking about is raising the standard of provision and delivery of services at local level for pensioners, school pupils and for more police officers,' he added.

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