PM defends tax rise and failure to hold referendum on Lisbon Treaty

LABOUR'S broken promises have been put under the spotlight as Gordon Brown blamed the global recession for his decision to reverse a pledge not to raise income tax.

Etta Cohen, managing director of Forward Ladies which represents 11,000 businesswomen in the North, questioned how the party's latest manifesto could be believed when promises on tax and on a referendum on the Lisbon Treaty were broken.

The Prime Minister said he had to make a decision "nobody would want to make" to increase income tax for those earning more than 150,000 but he believed it was the fairest way to "stop the recession getting out of hand".

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He said: "We have had a recession in every part of the world.

"Now we have got to deal with a reduction of the deficit to stop this recession getting out of hand.

"So yes we had to say, and this is the one change from that manifesto, people with the broadest shoulders have got to pay a bit more to help us through this.

"And that's why we have raised the top rate of tax above incomes above 150,000 and that's a decision I didn't want to make, but it was the right decision in my view, so that the burden is properly shared."

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He explained the failure to hold a referendum on the Lisbon Treaty was because it had had no major constitutional impact on Britain.

The issues he had identified as problems – interference with social security, national security, policing and justice, economic development and foreign policy – were no longer of concern as the treaty was so "watered down" by the time it was passed.

He also spoke of the benefits of strong relationships with the European Union, citing millions of jobs in Britain that rely on that relationship and the high levels of trading between Britain and other European countries.

Mr Brown said: "The reason that we did not have a referendum on this is there was no major constitutional issue in the end that had to be dealt with.

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"They abandoned the concept of a constitutional treaty. If you think that there has been a huge difference between January 1 and December 31 then obviously a major constitutional change has happened, but I don't think that happened.

"We watered down the treaty to the point at which there was no major constitutional change."

WATCHDOG URGED ON WORLD LEADERS

Prime Minister Gordon Brown said he had urged world leaders to adopt a global financial watchdog before the financial crisis of 2008. He had urged authorities in America and Europe to set up a worldwide system to police the banking sector ahead of the subprime mortgage crisis in the US.

He was responding to questions over his admission that he wished he had tightened regulation earlier. "So yes we needed to do far more, and yes we may have to do more in the future, but I don't think we should allow a saver or despositer who is completely innocent and has done nothing wrong to pay the price for the mistakes of a few banks, particularly banks in America."