The Week in Politics: You can't have it both ways on tax and spend

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The Independent Online

According to Labour strategists, the row over Howard Flight's remarks on public spending shows that "the Tories are two parties" - unreconstructed Thatcherites such as Mr Flight who want deep spending cuts and the New Tories trying to show that the party has moved on.

According to Labour strategists, the row over Howard Flight's remarks on public spending shows that "the Tories are two parties" - unreconstructed Thatcherites such as Mr Flight who want deep spending cuts and the New Tories trying to show that the party has moved on.

But I can't help thinking that Labour has a split personality when it comes to one of the problems bedevilling Britain after eight years of Labour rule - the people stuck on the bottom rung of the ladder with little prospect of moving up.

Tony Blair has tried to maintain the coalition of the working and middle classes that has delivered him two thumping majorities. But he has not done much about what he in 1997 called a system that gives the breaks "to an elite at the top increasingly out of touch with the rest of us".

But during the 2001 election, Mr Blair seemed more intent on reassuring those at the top. "It's not my burning ambition to make sure that David Beckham earns less money," he told BBC2's Newsnight.

Suddenly, Labour seems to be having a rethink. That 1997 coalition is under threat. The working-class Labour vote is disenchanted and the middle classes are wondering what they got in return for their stealth taxes. So helping those at the bottom of the pile who are prepared to help themselves is back in fashion. It is not about income, but opportunities, say Labour strategists, who hope their "big idea" will also appeal to progressive voters alienated by Iraq.

The Fabian Society has just staged an interesting series of speeches and seminars on "life chances" in an attempt to reignite Labour's dormant debate about "equality". The ministers taking part have been unusually frank. David Miliband, the Cabinet Office minister charged with writing the Labour manifesto, admitted: "Our country remains deeply scarred by unequal life-chances," citing the pay gap between men and women and for certain ethnic minorities.

Ruth Kelly, the Secretary of State for Education, admitted the facts on social mobility were "depressing" and cited studies showing that, for people in their thirties, the social class of their parents mattered even more than it did in the past.

Mr Blair has fine-tuned his 2001 answer to the "David Beckham question" - a little. He told the Labour modernisers' journal Progress: "I do care about people who are without opportunity, disadvantaged and poor. We've got to lift those people but we don't necessarily do that by hammering the people who are successful."

All this begs an inevitable question: why has Labour rediscovered the disadvantaged, after eight years? To be fair, it has had some successes. Gordon Brown's tax credits have lifted 700,000 children and 700,000 pensioners out of relative poverty since 1997. He has improved the lot of the working poor - but not the bottom 10 per cent.

Many Labour folk wish the Government had shouted louder about its achievements and not been haunted by the party's tax demons - notably John Smith's tax-raising shadow Budget, which cost Labour dearly at the 1992 election. Ministers have shied away from admitting that they have "redistributed" wealth for fear of frightening the middle classes.

This sudden interest risks being seen as too little, too late. "You can't speak a Daily Mail-style language for four years and then in the last four weeks of the campaign shift and hope that suddenly by sounding a bit left of centre, you are going to invigorate disgruntled former voters," says Philip Cowley of Nottingham University.

Douglas Alexander, the Foreign Office minister, has called for a stronger sense of moral purpose in the campaign. "Voters do not enter the voting booth in the manner of accountants calculating take home income," he says in a pamphlet published by the Brownite think tank the Smith Institute.

The Labour manifesto will reiterate its pledge to halve child poverty by 2010 and abolish it by 2020, a target that looks ambitious after government figures issued this week. But the manifesto will also restate a pledge not to raise income tax rates, leaving Labour open to criticism that it wills the ends without the means. The Liberal Democrats deserve credit for their more honest approach, calling for a 50p in the pound top rate on earnings above £100,000 a year.

Ministers will reject the advice of Glenys Kinnock, who will tell GMTV's Sunday programme that Labour should campaign on "redistribution". If that was ever an option, it certainly isn't after Wednesday's figures from the independent Institute for Fiscal Studies (IFS) showing that average incomes fell last year after Mr Brown increased national insurance.

Ministers were knocked out of their stride by the report. After Mr Blair formally announces a 5 May election on Monday, they will spend a large part of next week trying to convince us that our living standards have risen since 1997. But they will dodge the awkward questions about future tax levels.

So we enter the election with the two main parties trying to have it both ways. The Tories promise to protect key public services and cut taxes. Labour pledges to improve the life chances of the poorest without raising taxes. I suspect many voters will doubt both of them.