Tories set to spend pounds 7m on election drive

The election campaign will move into a New Year gear next month, with Labour warning local activists that the Tories are planning a pounds 7m propaganda drive from 6 January.

A letter sent out to party volunteers in Labour's target marginal constituencies says: "This will be a massive campaign which will lie about Labour and lie about their own record in government. And it will have an effect."

The Conservatives are said to have booked thousands of poster sites to carry permanent displays through to the election, which will be held between the end of February and 1 May. Fearing the impact of the Tories' expensive campaign, Labour is planning a pre-emptive strike, with a cost-cutting leaflet drop concentrated on non-Tory households identified by canvas returns. Labour's problem is that it has not got a clue as to what the Conservative posters will be saying. It is hoping for a leak on the attack.

The Conservatives' strategic themes are known to be Blair and tax, a repeat of the successful formula used during the last election: Kinnock and tax. In that campaign, Neil Kinnock's record of mind-changes - from Europe through to nuclear disarmament - cast doubt on his trustworthiness. Labour's shadowBudget was used to bolster the line that Mr Kinnock was planning to drop a "tax bombshell" on middle-income voters.

The up-dated version continues to argue that Labour will drop a tax bombshell, if only to finance spending commitments that have been totted up to pounds 30bn by civil servants working to definitions set by Conservative ministers. It is thought that Mr Blair is reluctant to approve any threat to increase tax rates for the wealthy, for fear of giving the Tories ammunition.

As for the personal attack on Mr Blair, ministers argue that he, too, is not to be trusted because he once contested a general election on a manifesto urging withdrawal from the European Economic Community, and was once a supporter of the Campaign for Nuclear Disarmament.

The trouble for the Conservatives is that following Mr Major's promises during the last election, and his record since, they are no longer trusted on taxation. The voters trust Mr Blair much more than they trusted Mr Kinnock.

A Labour leadership source said yesterday that they would reply positively to the negative message. But each response will contain a sideswipe against the Tories: arguing that Labour stands for the future, as opposed to the past; that it will fight for the many, not the few who have thrived under the Conservatives; and that it will offer strong leadership, rather than the weakness seen in Mr Major.

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