A tax-and-spend election fight doesn't add up

Labour won't put its spending policies on the table until after the vote, while the Tories' claims are highly creative
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The Independent Online
The tension in the air at Labour's press conference yesterday afternoon was palpable. William Waldegrave's attempt to cost Labour's programme marked, unmistakeably, the beginning of the end of the phoney war. So far, so good. But are we any wiser?

Conservative costing operations in 1986 and 1991 inflicted real damage on Labour; and in doing so, they helped to change the terms of the debate. If you think Labour has been right to ditch its past tax-and-spending addiction, then it follows that the Tories have already performed a democratic, perhaps even constitutional service. They have helped to save Labour from itself.

That is precisely why it is more difficult to make the charges stick this time. In 1992, Labour had two cast-iron spending commitments: to restore child benefit and old-age pensions to their 1979 levels. In 1996, it isn't like that.

Many of the biggest of the supposed promises in the Tory dossier don't figure at all in Labour's policy document New Life for Britain. And Gordon Brown re-emphasised yesterday that that was the one and only holy writ. Indeed, one side-effect of the Waldegrave document may well be to strengthen Brown's hand in forcing his colleagues to get real. I suspect that several shadow ministers will read Brown's brutal rejection of specific Tory claims about their spending plans with some dismay. It is true, too, that Brown has repeated again and again that increases in spending will be met from existing resources. And nobody in the Shadow Cabinet has been brave enough to challenge that. What's more, Brown shows every sign of meaning it.

To which the sharp young Tory backroom boys have an answer. OK, they say, it's heads we win, tails they lose. Maybe we can't whip up the fear that we did before the last election. And yes, maybe, given our own pretty formidable record of putting up taxes since 1992, we aren't going to be able to say, as Michael Heseltine did last time, that the election will be about three issues: tax, tax, and tax. But if the answer is that these aren't commitments at all, as Brown says, then what on earth have all these frontbench spokesmen been doing going around the country telling appreciative audiences what they want to hear? It plays (the Tories will say) right into our theme of Labour hypocrisy. If Labour isn't spendthrift any more, then it is two-faced instead.

The Tories have a point. It is all very well saying, as Brown did yesterday, that all statements not featured in New Life for Britain - including those of Tony Blair - are not party commitments. But then what are they for? If Andrew Smith, former Shadow Chief Secretary to the Treasury, says to the Labour Party conference that Labour will be announcing new initiatives to look at how every region of Britain can get high-speed links to the Channel Tunnel, either it presages a policy, or it is just warm words. If David Blunkett cheers up a teachers' conference by saying he will "consider" sabbaticals, is something really going on? Or has he got his fingers crossed behind his back in a "don't worry, Gordon, it's not a commitment" sort of way?

These may be priorities. But Labour is understandably reluctant to identify the savings that would be required to pay for them. So they can't be policies, at least until after the election. The result is an almost surrealistically bleak series of Nyets from Brown: pounds 51m on the disabled? Another Tory lie: the disabled rights Bill will "involve" the merging of existing pounds 500,000 budgets.

Yesterday's Tory document certainly makes some spectacularly creative claims. The only hard evidence for saying that Labour is going to increase spending on community care (would that there was more, many voters will say) is a statement by Margaret Beckett made before Tony Blair even became leader. The Tory estimate for the cost of the national minimum wage of a tidy pounds 3.7bn not only takes no account of potential savings in social security benefit but assumes that it will be introduced at 50 per cent of male earnings, or more than pounds 4 per hour - and therefore that it will affect large parts of the public sector. In the real world, Labour's minimum wage probably won't be high enough to include most public-sector workers. But in the virtual world of electioneering, Labour dare not say so. And the Tories can say what they like.

Isn't there a better way? As it happens, the Treasury adviser who invented, with spectacular success before the 1987 and 1992 elections, the modern Tory costing of Labour's programme thinks so. In a pamphlet for the Social Market Foundation, Andrew Tyrie suggests an independent fiscal policy committee which would consider both government and opposition tax and spending plans before elections and pronounce on them.

The result of such a process in 1997 might well expose an unmentionable truth: that there is nothing much to choose between the two parties on tax and spending. It would certainly take a lot of steam out of the inter- party conflict on the issue and leave them looking for other things to talk about. The electorate might even be let in on some of the real choices that consenting political adults constantly discuss in private: should we tax child benefit? Would green taxes be sensible? Do we need the European Fighter Aircraft? And so on.

William Waldegrave spoke for the political classes yesterday, no doubt, when he said Tyrie's idea sounded "interesting" but that he doubted that it was "practical".