Lord Mandelson: This crisis has shown the Tories are not ready for government

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When, before 1997, Labour moved to the centre, we were able to show genuinely different instincts on tax and spend, on markets, on trade unions, on public ownership, on defence, on education and public services.

People knew our values had been adapted to modern needs. You cannot say the same about Cameron's Conservatives in 2009. Their instincts, it turns out, have not changed.

The gap between the early modernising rhetoric of David Cameron and the entrenched instincts of his party has been exposed in their response to the recession. Look at what has been kept from the first phase of David Cameron's leadership in the past year and what has been thrown overboard.

Gone is the pretence of public spending not being sacrificed in favour of tax cuts. Gone is the support for the principle of tax credits and any meaningful language of concern for the have-nots in society. "Vote blue, go green" has been consigned to the wheelie bin.

Kept is the commitment to an inheritance tax favouring the wealthiest few in the country. Kept is the commitment to a tax break for married couples, even if there is no word on how it is to be paid for. Kept is the determination to sit on the margins in Europe, whatever the cost to business and jobs back home.

David Cameron has followed a policy of concealment, not change. But the two faces of his Conservative Party are increasingly on show: the one they want to present to the public of a revamped Tory party, and the other that betrays the reality of traditional right-wing Conservatism.

Most critically, a clear choice has opened up between the parties on the issues that will frame and decide the next election: the economy and public services. Look at the Tories' response to the recession.

Whilst Gordon Brown and Alistair Darling took the decisive action needed, their opposite numbers were left floundering. David and George [Osborne, the Shadow Chancellor] got the big judgements wrong.

If we had followed the course the Tories urged on us, the recession would have been deeper and longer, and the costs to our public finances far worse.



Taken from the Business Secretary's speech to Progress, a think tank, yesterday

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