Treasury ready for Labour

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The Independent Online
Whitehall is already preparing for a Labour government, with the Treasury leading the way. Senior civil servants are redrafting the Treasury's "mission statement" so that it can deliver Labour's economic strategy of faster growth, increased investment and more jobs.

The Treasury moves are part of a wider exercise in preparing for a possible change of government. The Department of Trade and Industry and the Department for Education and Employment are also understood to be rewriting their departmental aims and objectives.

These developments follow John Major's agreement that members of the Shadow Cabinet can begin the customary pre-election familiarisation meetings with Whitehall officials.

Shadow Chancellor Gordon Brown said: "It would be astonishing if the Treasury were not preparing for a Labour government, given the dissension and disarray of the current administration."

The Treasury's current mission statement, which informs all financial policy-making, lays down an overall aim of promoting rising prosperity "based on sustained economic growth". This formula will be replaced by Labour's aim to increase the "trend growth" of the economy. It will also stress Labour's commitment to fair shares, with a mission of achieving higher employment, higher investment in people and technology and a fairer society.

Under Labour, the Treasury mission statement would dropreferences to tax policies which generate revenue "while doing the least damage to the economy". Instead, it would concentrate on achieving the highest sustainable level of growth, consistent with low and stable inflation. There will also be a commitment to meeting the 1944 White Paper promise to achieve high and stable levels of employment - the farthest the Treasury has gone in backing full employment.

There will be a specific pledge on "fair" taxation, though it will not be spelled out what this means. And Labour will keep the current mission statement's promise of "permanently low taxation and sound public finance".

Mr Brown has not yet met Treasury officials to discuss the new mission statement, but his aides insist that current thinking will have to be tuned more towards Labour's policies before the Shadow Chancellor will be happy with the outcome.

In a speech in Manchester tomorrow, Mr Brown will stress the importance of low inflation and sound finance under Labour, but also the Treasury's role in creating a society in which there are equal opportunities for all based on higher levels of investment. The Treasury must be a "catalyst for change", he will argue.

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