Taking from Desmond Pitcher and giving to Poplar Joe: Labour's big idea?


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Labour plans to impose a windfall tax on privatised-industry fat- cats to finance a pounds 3bn programme to take 250,000 unemployed young people off the dole were condemned out of hand by the Chancellor of the Exchequer yesterday.

Last night, as Parliament entered its final pre-election stages, the Government suffered further parliamentary humiliation after a determined guerrilla force of former Law Lords, Liberal Democrats and Tory and Labour rebels, forced Michael Howard, the Home Secretary, to accept defeat on a key section of his controversial Crime (Sentences) Bill.

After peers led by Lord Ackner, a former Law Lord, had defied a "Satanic agreement" struck between Mr Howard and Jack Straw, the Labour spokesman, to give the Government a chance to defeat a key Lords amendment on judicial discretion in sentencing, the Government agreed to let the amendment stand.

Earlier, at the start of the first full day of election campaigning, Tony Blair warned that the Government's do-nothing policy on long-term unemployment threatened to create an alienated underclass.

"If the Conservatives had come up with proposals such as this," he told a press conference, "people would have said, 'This is a revolution'." A Labour brief on the job-creation policy said: "We must never again see a generation of people abandoned, to earn nothing and learn nothing."

But Mr Clarke said last night: "The latest windfall tax fiasco again shows that Labour are not fit to govern. Instead of saying which companies would pay the windfall tax, Labour are playing an absurd game, giving journalists a clue and daring them to work out the answer for themselves. This is no way to run a tax policy.

"Labour's refusal to come clean on which companies would be hit and how heavily, leaves millions of shareholders and pensioners in the dark. Without this basic information, people have no chance of working out how the windfall tax would hit their own investments or pensions.

"The conclusion from Labour's windfall-tax fiasco is clear: you can't trust a shadow Chancellor who refuses to answer the key questions on tax."

Gordon Brown, the shadow Chancellor, announced at Labour's election press conference that Mr Blair would be appointing a new Cabinet minister with responsibility for employment, which would include Social Chapter negotiations with European partners.

The party also prompted the Chancellor's outrage by delivering its first list of candidates for the one-off pounds 3bn windfall levy, which could apply to British Telecom, water, gas and electricity companies, the British Airports Authority and privatised railway companies, but not British Airways. Mr Clarke pounced on the fact that Labour's list was optional and demanded to know which companies would pay the tax.

He also attacked the principle of Labour's job-creation package, saying: "Gordon Brown says he will create 250,000 jobs by a one-off tax. That is a dreadfully old-fashioned method of claiming to create jobs.

"Since the day when Gordon Brown first promised to create 250,000 places on schemes for young people, we have seen 400,000 extra jobs created in the enterprise economy."

The Chancellor said unemployment had been reduced by almost 1 million since its December 1992 peak, but was unable to tell The Independent whether unemployment had risen or fallen since Mr Major became Prime Minister in 1990.

Unemployment was 1,778,000 in November 1990, when Mr Major took office, and it had not fallen below that figure since.

Later, Ian McCartney, Labour's employment spokes- man, said: "The truth is that the only jobs Tory ministers really care about are their own."

In a prepared statement on economic policy, Mr Clarke said at his press conference: "Today, Britain is booming, without going bust.

"We have unlocked Britain's potential and over the next five years we intend to make sure Britain realises that potential ...

"By contrast, Labour's great leap backwards into social democracy would put Britain's future at risk.

"It would be an escape from reality, a holiday from history which this nation cannot afford."

Later, Mr Blair used Commons question time to tackle Mr Major on health- authority deficits. Mr Blair said it was a "tragedy and a disgrace" that after 18 years of Tory rule, waiting-lists were up, hospitals were suffering from cash and staff shortages and non-emergency surgery was being cancelled.

The Prime Minister said only the Tories were committed to increasing funding, year-on-year, and added: "Labour may have set up the health service but we have built it up."

Labour later issued a list of nine health authorities for which the Conservatives' claimed "real growth" in budgets for 1997-98 would not cover the 1996- 97 deficit.

The authorities were: Bradford; Ealing, Hammersmith and Hounslow; Leeds; North and East Devon; North Cumbria; North Essex; Wakefield; West Surrey; and Wiltshire.

Mr Major said Labour's figures were blown out of all proportion, that the forecast deficit was a small proportion of the overall NHS budget.

The last Prime Minister's Question Time of the Parliament will be staged tomorrow, with the current Parliament rising for good on Friday.