Brown hit by rising clamour over 'tax on jobs'

Seeking to seize the initiative in the General Election campaign, Mr Brown vowed to keep the basic rate of income tax at 20p and unveiled what he called "the most comprehensive programme of constitutional reform for a century".

But the measures failed to distract from business leaders' outcry at Labour plans to raise NI contributions, which the Tories have described as a tax on jobs.

Tory leader David Cameron said momentum was growing against Labour's policy, as 30 more captains of industry, including Corus chief executive Kirby Adams and Northern Foods boss Stefan Barden, signed up yesterday to plans to curb NI rises.

Labour later confirmed the removal of key tax changes from its Finance Bill, given its third reading last night, which also saw the rise in cider duty limited to two per cent above inflation from June 30 – instead of the 10 per cent that was proposed.

Mr Cameron, who visited Manchester, Bolton and Cardiff yesterday, said Labour's planned NI increase was "the wrong tax at the wrong time for the wrong reason" as he pledged the Tories would find 6bn in the next Budget to reverse it.

Mr Brown, who was heckled about schools admissions as he left Centrepoint in London where he announced his constitutional reform package, said Labour's manifesto would include promises of referendums on voting reform and the House of Lords. He also pledged fixed-term parliaments to end the historic power of Prime Ministers to decide the timing of elections.

Other measures would include a ban on MPs working for lobbying companies, giving voters the power to get rid of MPs who are guilty of gross financial misconduct and giving MPs a free vote on lowering the voting age to 16.

However, Liberal Democrat leader Nick Clegg dismissed Mr Brown's plans for constitutional reform as a "gimmick", claiming it was "not worth the paper it is written on".