April 22, 2017 / 12:40 PM / 4 months ago

British PM May refuses to rule out personal tax hikes after election

LONDON, April 22 (Reuters) - British Prime Minister Theresa May refused on Saturday to rule out an increase in personal taxes if she wins a June 8 election after her finance minister said fiscal pledges had limited his ability to manage the economy.

May and her chancellor, Philip Hammond, were forced earlier this year to scrap a planned rise in an employment levy only days after it was announced following criticism that the measure breached 2015 party election promises.

May's surprise decision to call an election on June 8 has raised speculation that her Conservative 2017 manifesto will abandon commitments not to raise the rate of value-added tax, income tax or the national insurance payroll tax in order to help reduce the budget deficit.

Appearing at a campaign event in central England, May refused to say whether she could rule out higher taxes when asked three times by reporters.

"At this election people are going to have a very clear choice, between a Conservative Party which always has been, is and will continue to be a party that believes in lower taxes.

"Or the choice is a Labour Party whose natural instinct is to always raise taxes. That is the choice, lower taxes under the Conservatives or higher taxes under Labour."

Hammond raised the issue of higher taxes on Friday when he told reporters on a trip to Washington that he wanted Britain to be a "sensibly taxed" economy that did not run a budget deficit.

"It's self-evidently clear that the commitments that were made in the 2015 manifesto did, and do today, strain the ability of the government to manage the economy flexibly," he said.

Polls give May's governing Conservative party a lead of around 20 percentage points, enough to give her a much bigger majority that she hopes will strengthen her hand when negotiating Britain's exit from the European Union over the next two years. (Reporting by Kate Holton; Editing by Helen Popper)

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