Cabinet divided over 'class war' attacks on Cameron

Ministers blame Ed Balls for pushing Gordon Brown to draw class divisions between the two main parties

Divisions in the Cabinet over whether Labour should pursue a "class war" campaign against David Cameron opened up yesterday, as two ministers warned that it would backfire on the party.

Gordon Brown's closest allies insist he had not approved a class-based attack on the Conservatives ahead of next year's general election. However, some Cabinet ministers believe that the Prime Minister's determination to draw "dividing lines" between the two main parties leaves him open to criticism of relaunching the class war. They blame Schools Secretary Ed Balls for pushing him towards such an approach.

Tessa Jowell, Minister for the Cabinet Office, said: "Most people don't give a thought for one day to the next whether Eton exists. I don't think this should be an election campaign about the 1960s intake to Eton." Her aides insist she was not criticising Mr Brown and that Downing Street had been aware in advance of her comments to The Sunday Telegraph. They say her point was that the election campaign should not be about personalities.

The Justice Secretary Jack Straw told The Sunday Times: "People cannot choose their parents... Most people have little choice over where they go to school." He added: "The more serious charge against the Conservatives is about who they would favour when they are in government."

Yesterday senior ministers told The Independent that there has been no Cabinet discussion of playing the class card against Mr Cameron. But although no such strategy has been agreed, recent comments by some ministers have given the opposite impression.

Mr Brown unwittingly propelled "class war" back into the headlines this month when, at his most successful Prime Minister's Questions of 2009, he told Mr Cameron his plans to cut inheritance tax were "dreamed up on the playing fields of Eton". Brown aides are adamant it was a one-off quip.

However, there has been an element of class politics in the Cabinet's intense debates on the Government's own tax policies. Before this month's pre-Budget Report, Mr Balls, former chief economic adviser to Mr Brown, and his wife Yvette Cooper, the Work and Pensions Secretary, both lobbied for the new 50p top tax rate on incomes above £150,000, which takes effect in April, to be extended to earnings over £100,000.

Alistair Darling, the Chancellor, and Lord Mandelson, the Business Secretary, resisted the proposal, arguing that the better off had reached the limit of their tolerance of tax rises. Mr Brown did not side with Mr Balls on this issue. However, he did back Mr Balls in his opposition to Mr Darling's plans to raise VAT in 2011, so the Chancellor had to opt for a further rise in National Insurance contributions. The Prime Minister also backed Mr Balls in his campaign to win an above-inflation rise in his schools budget – a more generous deal than for any other minister.

Mr Balls's 2-1 victory in the battle over the pre-Budget Report has created tension in the Cabinet. Some fellow ministers believe the Schools Secretary is "on manoeuvres", positioning himself for a run for the Labour leadership if the party loses the election and Mr Brown stands down. Mr Balls's strident attacks on the Tories and his advocacy of "dividing lines" play well among Labour grassroots and trade unions, who between them have two-thirds of the votes when the party elects a leader.

After Lord Mandelson saw off a coup against Mr Brown in June, the Business Secretary seemed to be the Prime Minister's most influential adviser. His views on "class war" have not changed since 1998, when he declared that New Labour was "intensely relaxed about the filthy rich, as long as they pay their taxes".

The pre-Budget Report showed that Mr Balls's influence has increased. Although he and Lord Mandelson work hard to avoid rows, they whisper different advice in the Prime Minister's left and right ears. Lord Mandelson has told Mr Brown that Labour's approach may be misinterpreted as "class war" and a "core vote strategy", warning that New Labour won power by appealing to the aspiring middle classes and could not win an election by talking to traditional working class supporters alone.

Alan Johnson, the Home Secretary, said a week ago that too many leading Tories were "public school millionaires" and branded them "the party of inherited wealth, private education and conspicuous affluence". But ministers insist he was simply arguing that the Tories would represent their own if they win power – people who do not depend on public services because they can afford to opt out and go private. "It's about economic class, not social class," a Brown aide said yesterday. Half the extra tax revenue needed to tackle the public deficit will be raised from the top 2 per cent of the population. Ministers say that is about fairness, not soaking the rich.

More productive than "class war", according to Labour's private polling, is to accuse Mr Cameron of having "two faces" – saying one thing, doing another. Labour may try to square the circle by adopting this, rather than a traditional class-based approach.

The Tories are convinced that a Labour "class war" will help rather than hinder Mr Cameron. They say the move marks an end to New Labour and a lurch to the left, leaving centre ground clear for the New Tories. Eric Pickles, the Tory Chairman, said: "Tessa Jowell's comments show the Cabinet cannot agree on anything. Gordon Brown's class warfare attacks are a desperate attempt to divert the public's attention from the monumental mess he has got this country into."