Election '97: Tories target Prescott over minimum pay

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John Prescott was targeted by the Tory leadership last night after off-the-record remarks on the minimum wage which Brian Mawhinney, the Conservative Party chairman, claimed marked a "defining moment" in the general election campaign.

The attack on the Labour deputy leader will be used by the Tory leadership to keep Labour on the defensive for the second successive week of the campaign.

Dr Mawhinney said the minimum wage was part of Labour's "secret deal" with the unions which the party would push through the Commons "in cold blood" even though it knew people would suffer unemployment as a result.

That allegation was denied by Mr Prescott and the Labour leadership, but the Tories will use the unemployment figures on Wednesday to attack the central plank of Labour's campaign platform of reducing unemployment with the proceeds of the windfall profits tax on the privatised utilities.

"This is a defining moment, because it shows that on its central policy of reducing unemployment, Labour is shot full of holes," said a Tory source.

The Deputy Prime Minister, Michael Heseltine, widened the attack by claiming that the Scottish TUC agenda revealed that Labour was under renewed pressure to give way to union demands on a minium wage of pounds 4.50 an hour, an end to public sector pay freezes, more job protection and the right to strike in secondary action.

The Tory big guns were trained on Mr Prescott after a report in the Sunday Times by AA Gill, under a headline describing him as a "loose cannon", that the deputy Labour leader had said off-the-record that the minimum wage would increase unemployment.

"He gave the hypothetical example of a nursery school that paid four workers pounds 2 an hour and was then made to pay them pounds 4. They might have to sack two of them. But he couldn't say that. Think what the Tories would make of it."

None of Mr Prescott's alleged remarks was in direct quotes, and the deputy leader fired off an angry letter accusing the reporter of "selectively omitting from his report that we were talking about a situation that existed five years ago ... As I made clear to Mr Gill and as I have said on many occasions whilst in 1992 I was concerned about the effects of the minimum wage, evidence published since then has proved those fears to be groundless."

The Tories have used Mr Prescott's 1992 remarks about the minimum wage earlier in this campaign but yesterday called a special press conference in London to exploit what it believes is a vulnerable flank for Labour.

"If we can show that the Labour Party would increase unemployment, it destroys their key argument that they would reduce unemployment by the windfall tax," said the Tory source.

Dr Mawhinney declared: "There is a defining moment in every general election campaign. This is that moment. This election is about trust. The revelation today ... is the starkest possible evidence that you cannot trust a word new Labour say."

Stephen Dorrell, the Secretary of State for Health, said Labour "tell the truth in private and tell lies in public".

Mr Heseltine said: "With less than three weeks to the election, the union bosses are flexing their muscles and spelling out the pay-back they want for bankrolling Labour's election effort."

Ian Lang, President of the Board of Trade, said: "Tony Blair's protestations that he can be tough on the unions are laughable.

"The deal has already been struck. There would be no stopping them."