Tories will target Labour 'disguise'

Shadow Chancellor will respond to Budget by attacking Labour on taxes and job creation

PETER LILLEY will use the debate over the Government's Budget on Tuesday to launch the Conservative Party's post-election attack on New Labour's economic programme.

The shadow Chancellor will characterise Brown's first fully-fledged effort in balancing the nation's books as a high-tax, high-spend exercise in disguise. "I shall be concentrating on Labour's tax increases because it is their biggest breach of an election promise," he said.

Beyond taxes, however, Mr Lilley sees job creation as the pivotal political issue for the Government. If the Blair-Brown team is effective in injecting new jobs into the economy, its re-election will be difficult to stop, he acknowledges. But if the Government's welfare-to-work and other job- boosting programmes abort, New Labour's appeal as a kinder, gentler Thatcherism will crumble.

Speaking at a press conference at Conservative Central Office on Wednesday last week, Mr Lilley exemplified the shift to the centre of all industrial nation political parties in the face of the rising power of the global financial markets. Just as Labour repositioned itself as the party of "tough love" under Tony Blair and Gordon Brown, the Tories under Mr Lilley and opposition leader William Hague are positioning themselves as the party of laissez-faire with a conscience.

Mr Lilley's objective on Tuesday will be to dent the credibility of the Government's econ- omic policy. "Brown is going to present his Budget as 'radical' - as something different from previous Labour Budgets," said a Lilley researcher. "We shall show it isn't different."

Mr Lilley portrays Mr Blair as a closet true Thatcherite and Mr Brown as old Labour. "Brown believes social cohesion is a prerequisite for allowing capitalism to flourish," he said. "You can argue that point. Tony Blair was going around before the election and telling people: 'Trust me, I'm going to sell out the poor'," said Mr Lilley.

The result, according to the shadow Chancellor, is a good-cop-bad-cop routine that has bamboozled the electorate into thinking it is getting the best of both worlds. But this sleight of hand, Mr Lilley said, will not work if the extra jobs needed to improve the nation's standard of living do not materialise.

"The Government's welfare-to-work programme is about redistribution - redistribution of jobs," he said. "The new jobs that under 25s will get will be taken from older workers."

But Mr Lilley said the Conservatives would not be putting forward thinking of its own on job creation any time soon. Debate over job creation is therefore likely to remain stuck where it was before the change of government, at least until the welfare-to-work programme is seen to succeed or fail.

Mr Lilley did make old Tory arguments about job creation. He said Labour's prospective minimum wage would deter employers from creating jobs at the bottom of the ladder. He added that the Conservative philosophy of giving employers liberty to pursue their affairs was better than the targeted support of fast-growth sectors of the economy favoured by Labour.

Asked why he would not be offering alternatives to the Government's job creation schemes, Mr Lilley replied: "Detailed debate at this point would be bad for our party. It would inevitably turn into rows about what we should have said in our last manifesto."

Asked if the Tories were using this excuse to hide the fact that they had done no fresh thinking on job creation, the shadow Chancellor hedged.

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