Borrie to chair labour commission on tax and benefits

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Sir Gordon Borrie, the former Director-General of Fair Trading, is expected to chair the Commission on Social Justice that Labour is setting up to produce 'a new Beveridge' for the party.

The announcement of his appointment and that of about 14 commission members, and their terms of reference, is not expected until about Christmas. The commission will examine income and wealth distribution, welfare benefits and taxation, as well as the balance between universal and selective, and between means-tested and national insurance benefits. The commission is not expected to have the funds to run the 'poverty census' that Margaret Beckett, the deputy leader, proposed. It will, however, be able to draw on research being done around today's 50th anniversary of the Beveridge report, which led to the setting up of the welfare state.

Donald Dewar, Labour's social security spokesman, said yesterday that the commission will be free to look at the 'alternative' or 'middle class' welfare state, including mortgage and pension tax relief, as part of a study that is expected to include an examination of tax/benefit integration. He hopes the commission will report within two years. Labour will not be bound by its recommendations. Some Labour MPs are worried the party will not be radical enough.

Frank Field, who chairs the Commons Social Security Committee, said this week: 'If we stumble through these next four years without being prepared to debate every sacred cow and justify or change it, then we will go down to our fifth election defeat and we will deserve to.' He has argued for Labour to phase out mortgage and pension relief to produce a basic tax rate of 15p in the pound.

Mr Dewar said yesterday: 'If the commission feel that they need to produce radical propositions, they should do so. I am a little more worried that they will have to come back and say there is not much that can be done that's the greater worry'.

Labour is hoping the arm's-length relationship will help it to fend off Conservative attacks about Labour's plans while letting it examine controversial ideas without each one being presented as Labour policy.