Labour's pre-election tax policy rejected: Brown consigns party's high taxation image to the past. Patricia Wynn Davies reports

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The Independent Online
THE CLEAREST rejection yet of John Smith's tax policies before the 1992 election was spelt out yesterday by Gordon Brown, Labour's economic spokesman.

The party would even cut taxes if it could, and would only tax if it increased opportunities for individuals or the community as a whole, he said as he launched Labour's Economic Approach, the economy policy to be presented to next month's annual conference.

Yesterday's high-profile Westminster launch of what Mr Brown called the 'guiding themes' developed during Labour's past year of opposition was the latest front- bench effort to shed the 'tax and spend' image so successfully cultivated by the Conservatives.

Britain needed a 'skills revolution'; industrial policies to encourage long-term investment; employment policies aimed at providing immediate opportunities for the jobless to retrain; and a partnership between the public and private sector, Mr Brown said.

Labour was considering expanding its existing commitment to introduce a levy of 0.5 per cent of turnover on large and medium-sized companies that failed to train.

As part of its campaign for a better deal and more investment for small businesses, it would also examine whether the bank clearing system could be opened up to greater competition.

Stephen Dorrell, Financial Secretary, said: 'They still have to demonstrate to people how they are going to pay for their ambitious spending objectives.'

Steven Webb, a senior researcher at the Institute of Fiscal Studies, said the notion of 'taxing for opportunities' was 'fairly meaningless'. He said: 'It is not clear whether a pensions increase would fall within 'taxing for opportunities'.'

Mr Webb added that while Labour was addressing the long term, it was unclear whether economic growth and plans to attack the 'soft targets' of tax evaders and windfall profits of utilities would be sufficient to achieve key objectives in the document, such as ending youth and long-term unemployment.

A convincing presentation by Mr Brown yesterday is not expected to stifle dissent from the party left, which wants bolder policies, in the run-up to the conference vote.

There were signs, too, of reservations among Labour 'moderates'. Nick Raynsford, the MP for Greenwich, said Labour needed 'rather more radical policies than have yet been enunciated'. As Mr Brown insisted that Labour was 'not against wealth', Mr Raynsford said the document was 'too cautious' on tax.

The majority of British people were prepared to pay a little more for the services they wanted, he said.

While applauding the decision 'not to go on much as we have for the last 40 years', Mr Raynsford said there would be concerns that the paper would not allow a Labour chancellor to deliver what would be expected from a Labour government.

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