Letwin: Tax warning

The Tories have predicted big third term tax rises if Labour is re-elected in next year's general election.

Oliver Letwin said the government would need to raise additional revenue to fund growing budget shortfalls.

The shadow chancellor predicted that Gordon Brown, or his successor, would be forced into a fresh round of stealth taxes.

Rather than raising basic tax rates, the Tories predict increases in areas such as council tax and National Insurance.

"We have now got significant deficits and that means we are going to have third term tax rises if Labour is re-elected," Letwin told the Today programme.

"The question people have to ask themselves is do they really want to have a council tax which goes from £1,000 for a Band D property to £2,000?

"Do they really want to see a £900 increase in National Insurance contributions?

"If they want not to see those things, and I think most of our fellow-countrymen don't, we have to thin down the fat bureaucracy Mr Brown has created and we have to do something to get this country out of this horror of increased taxes."

The Tory attack is being seen as fresh evidence that the party will use tax as a key campaign theme at the forthcoming general election.

The party is already pledging to increase the inheritance tax threshold.

But some leading Conservatives believe the party can only be successful if it focuses on bread and butter issues such as health, education and crime in the election.