UK government drops taxes in election rush

Cider drinkers, vacation home owners and libel lawyers are among the early victors in Britain's looming general election.

All will benefit from the government's announcement Wednesday that it is dropping a host of planned tax and fee increases as it struggles to push through legislation before Parliament breaks up ahead of the May 6 election.

With just two days left, Prime Minister Gordon Brown's Labour Party is abandoning its recently imposed 10 percent hike in cider duty, announced in its budget last month as part of its bid to tackle Britain's binge-drinking culture.

Other measures sacrificed included plans to scrap the existing tax relief on holiday homes, increase the fees charged by libel lawyers and impose a tax on every household with a landline telephone to pay for countrywide broadband. The government also was forced to drop a plan to make sex education compulsory for all 15-year-olds.

Labour has stressed that the proposals will be reinstated if it wins power in an anticipated tight election race. The most recent opinion polls point to the likelihood of a hung Parliament in which the Conservatives win a greater share of the vote, but not enough seats to secure an overall majority.

Concessions are a traditional part of the last-minute rush to secure the passage of legislation before an election, a time known as the "wash-up period." The parties usually engage in horse trading, sacrificing some measures to push through the bills they consider most important before Parliament is dissolved to allow leaders to hit the campaign trail.

These key pieces of legislation included a ban on the "legal high" mephedrone _ announced by the government last week and passed by the House of Commons Wednesday.

The government also hopes to pass the Digital Economy Bill, a contentious measure that will give authorities greater power to clamp down on illegal Internet file-sharers. The entertainment industry has been lobbying for the bill to combat online piracy, but critics say it could lead to Web sites being blocked and Internet users accused of file-sharing being unfairly cut off.

The opposition Conservative Party was quick to seize on the government's backtrack over measures that had met a negative reaction from the public.

The tax increase on alcoholic cider had been deeply unpopular, with the Conservatives painting it as a punitive measure on average Britons weary of the country's worst recession since World War II while bankers still collected bonus payments.

The tax increase will now expire June 30, after which cider will be subject the standard 2 percent increase announced in the budget for beers and spirits.

The landline tax, around 50 pence per month, and the changes to holiday home taxes that were expected to raise an extra 20 million pounds a year from 2011/12 had not yet taken effect.

"The Conservatives have forced the government to back down on three significant tax hikes _ on fixed phone lines, cider and holiday lettings _ that would have hit consumers and businesses in the pocket and damaged the recovery," said Philip Hammond, a Conservative Treasury spokesman. "But the threat couldn't be clearer _ if Labour is re-elected all three taxes will come back. Only a Conservative government will stop Labour's tax increases."

The legislation to cut the fees charged by libel lawyers was dropped after a rebellion by Labour lawmakers concerned it would deter lawyers from taking on cases.

Stephen Timms, the Treasury's chief secretary, accused the Conservatives of "being fiscally irresponsible, playing populist cards rather than reducing the deficit or protecting front line services."

Justice Secretary Jack Straw accused the Conservatives of holding up reform to the legislative system, forcing the government to abandon plans to phase out hereditary peers in the House of Lords by ending the system of by-elections when one of the existing hereditaries dies.

"The Conservative party talks about change. But behind closed doors they are blocking key legislation to reform our voting system and abolish hereditary peers," Straw said in a letter to his Tory counterpart Dominic Grieve.