Leading Article: Alternative to the shopping list

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The Independent Online
THERE are times when a politician may be forgiven for failing to give a straight answer to an interviewer's question. A case in point was Margaret Beckett, Labour's deputy leader, who was asked on yesterday's Today programme whether she thought the alternative budget that the Labour Party presented before the 1992 election had been a mistake. Political caution forbade her to say yes; yet intellectually, it would have been absurd to say no. That notorious alternative budget became one of the Tories' best campaign weapons.

Ms Beckett suggested yesterday, and her view now seems set to become Labour strategy, that the party in future should offer voters a sort of shopping list of its priorities - promising to achieve them only as the money becomes available. Yet that leaves the underlying issue unresolved: how Labour can present its tax strategy to the public in a way that makes it a credible party of government, but avoids alienating those from whom it may wish to raise extra funds.

With a 50-point showing in the latest opinion polls, it is tempting for the party to put off such a difficult question when the Tories themselves seem to be doing the job of opposition. But the matter is as relevant today as it will be in 1996. Many of Labour's most telling attacks on the Tories have been about the lack of public spending. Demands that the Government should spend more on education, health, the military or public transport cannot make sense on their own, torn from the wider framework of prudent public finance.

Labour politicians have rightly criticised the administrative cost of some Conservative reforms, and pointed out that there is still room for efficiency gains in the public sector. But better management cannot foot the bill for everything John Smith and his colleagues want to do. Even after the uncertainties of the economic cycle, Labour needs to be able to offer a clear line on how much taxes should take from the national income. Assuming annual economic growth a point or two above the Treasury's predictions, and basing budgetary calculations on that, is no answer to the problem.

The Conservatives' policy, albeit cast into doubt by their past record and by this week's tax increases, is clear: to use the fruits of economic growth to hold services constant in real terms and to reduce the tax bite, with the medium-term aim of cutting the basic income-tax rate to 20 per cent.

Labour might advocate the mirror-image approach. It could promise voters straightforwardly that it will use growth in the economy not to cut taxes but to improve public services by spending more on them - and to do this while maintaining the tax bite at a constant proportion of gross domestic product. This would avoid the comforting but ultimately self-defeating vagueness of Ms Beckett's shopping list; but it would do Labour less electoral damage than a full-blown alternative budget. Such an approach would be worthy of a serious party's manifesto in the 1996 election.

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