Andrew Grice: The Week In Politics

Brown's new collegiate style will be tested by cabinet trio's tax challenge
Click to follow
The Independent Online

What does Gordon Brown have in common with the Conservative Party? They were both seen as nasty but now they are being nice to everyone.

The Chancellor's image was damaged by the failed coup by some of his acolytes against Tony Blair in September. Afterwards, he declared himself a "team player" and promised he would run a government of "all the talents". He launched a charm offensive among those who are not his natural soulmates, including some who sit round the cabinet table.

Some of the sceptical Blairites have been won over by Mr Brown's more inclusive approach. Others remain to be convinced that he can change his spots. But even the doubters acknowledge that Mr Brown and Mr Blair have got over the trauma of the coup. This better atmosphere was no doubt at the back of Mr Blair's mind when he endorsed the "heavyweight" Mr Brown as his successor in the heat of Commons battle on Wednesday - rather earlier than he had originally intended to do so.

The endorsement was another important landmark on Mr Brown's long ascent to the top. But his path is still littered with some thorny challenges - and one is fast approaching. The Chancellor's new collegiate style is about to be tested to the full.

Three former cabinet ministers who he would not count among his closest allies - Charles Clarke, Alan Milburn and Stephen Byers - are to join forces to demand a full debate on an issue Mr Brown would prefer to keep very close to his chest - tax. The Chancellor has always regarded it as his own private preserve. Labour figures who invade his territory tend to get their legs chopped off. Ask Peter Hain. Three years ago, he tiptoed into this secret garden by calling for the better-off to pay more tax. He still bears the scars from what Mr Blair called the "big clunking fist" of Mr Brown. So does Mr Byers, who suggested recently that inheritance tax should be killed off.

The planned joint offensive by Messrs Clarke, Milburn and Byers is not intended as a hostile act, even though it will initially be perceived as such in the Treasury. They are not calling for overall tax rises. They want a debate on reforming a system that has ossified because politicians fear that touching it will send the media into a lather and frighten the voters.

Outside the cabinet pressure cooker, the trio have had time to think laterally. They believe that income tax is ripe for change. Although Mr Brown has helped to "make work pay", there are still disincentives. Because thresholds have risen slower than average earnings, the number of people paying the top 40p in the pound rate has risen from 2.1m to 3.3m since 1997. Many are not among the super-rich.

The three ex-ministers do not want another raft of stealth taxes and, like Mr Brown and Mr Blair, they suspect the public's toleration of tax levels is reaching breaking point. But they want Labour to consider cutting the cake differently. That could preserve spending on vital services when the big increases in recent years slow in 2008. Without reverting to an Old Labour "soak the rich" strategy, they think the tax system could be made fairer.

Options include green taxes to "make polluters pay" and hypothecated taxes, earmarked for a specific purpose - whether to satisfy the insatiable demand for health spending, or to fund public transport through road pricing. Another issue is whether beneficiaries of public spending should pay more towards it, the principle behind university tuition fees.

The newly formed trio fear that if Mr Brown prevents a debate, Labour will be left trailing the other parties. The Liberal Democrats have already published a commendably detailed tax strategy, based on a radical "green switch" which would redistribute wealth from rich to poor. The Tories have published a 176-page report by their tax commission which highlights many of the system's flaws and complexities for both taxpayers and business.

Messrs Clarke, Milburn and Byers fear Mr Brown may lose the tax war unless Labour shows itself more open to ideas. They will argue there will not be a better time for a tax debate than the moment of transition which approaches.

In theory, the tax issue could be discussed by the six cabinet policy groups set up by Mr Blair. But their work will be overtaken by next year's government-wide spending review for the next 10 years. The proprietor? G Brown, of course. As one of the former ministers admitted ruefully: "Gordon holds all the aces."

a.grice@independent.co.uk

Comments