Leading Article: Old targets to test the mettle of new Labour

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Everyone thinks Gordon Brown's tax and spending bombshell yesterday was shaped merely to win the coming election. Wrong. It is of course true that Gordon Brown's promises - sticking to existing Conservative spending budgets for two years, no increase in the basic rate of income tax or a new top rate for all five years of the parliament - are likely to improve Labour's chances of winning this year, so long as the electorate believe him. But they are far, far more important for the election beyond, five years from now, and for Labour's chances of ever winning any subsequent election again.

Our cautious support for Gordon Brown's proposals is not based on the view that income tax should never go up, nor on the belief that the Government's present spending plans are perfect in every way. Far from it. Actually there is a strong case for more progressive taxation, including higher and lower income tax rates. And, though the state does not need to expand inexorably, it is possible to be persuaded that certain public services need more investment. In spite of all that, it is still right for the Labour Party, right now, to commit itself to no overall increase in tax and spending.

Labour is boxed in by its poor record. No one associates Labour with hauling back borrowing, bringing tax down, and reducing spending. In consequence, voters rarely take what Labour politicians say about tax and spending at face value. Everyone suspects that the old heart of old Labour still beats, and that the party's activist instincts, when staff and services are under strain, will be to cry out for more money as the obvious answer. Tony Blair and Gordon Brown fight these traditional instincts, but we know that they are having to fight them, and therefore they are still there.

Even Blair loyalists can't help themselves. Glenda Jackson made a terrific fuss this month about under-investment in London's Tube network. David Clark attacked government cuts in defence only yesterday. Yet the Government was absolutely right to start cutting defence spending; the MoD should be high on Labour's list for a spending review if it wins the election. Can't Labour politicians understand that lower spending (maybe, even, privatising services like underground commuter trains) is an important part of distributing social resources justly?

Until they do, until "new" Labour can prove that it can make balanced and fully informed decisions about spending while in power, rather than following more profligate instincts, voters will not trust the party's much-vaunted change. Nor will anyone be willing to fork out in higher taxes when and if a genuine and demonstrable need arises.

So Gordon Brown is right. A new Labour government should plan to spend two years getting to grips with existing budgets, and working out how best to spend them (a good principle anyway, after 18 years in opposition). Two years of austerity and prudence might set the public sector unions screaming, but it would do wonders for the credibility of a Labour health minister finally requesting extra cash, with the full facts at his fingertips. And who knows, during those months of management, many Labour MPs may discover to their surprise that all kinds of radical and creative things are possible without demanding additional cash.

The same is true for taxes. When Labour politicians talk about raising taxes on the rich, again, no one takes their words at face value. For most voters, any Labour talk of tax changes is likely to bring the two words "thin" and "wedge" into close proximity. Labour has to prove in power that it does not want to tax the rich out of envy, and everyone else out of puritanical zeal, before it can build a consensus for a more redistributive tax system. And if that means ruling out major income tax changes for a parliament, so be it.

Smooth speeches from a shadow Chancellor are only the start of tackling Labour's credibility deficit. The party will have to prove in government that it can actually put Gordon Brown's promises into practice. Swanning into Whitehall the day after the election, then throwing up their hands in horror and clucking, "We've seen the books, it is much, much worse than we thought," simply will not wash. Of course Labour politicians do not know all the details of the public finances. In truth, though, they know most of it, and, most importantly, they know what they don't know, and therefore what they should not make promises about.

Brown and Blair have taken a risk by belting themselves in so tightly. Sticking to the control total for 1998/99 will not be easy for any government, Conservative or Labour. With so much to lose, they might come to wish they had given themselves more room to manoeuvre. But it is a good gamble, and a tough-minded one.

There are those who think Mr Blair will vindicate his reform of the party simply by winning an election. But victory itself is not enough. Labour will only prove itself to be truly "new" when it demonstrates that it can govern responsibly, stick to the promises it made the voters, and resist the temptation to indulge itself. Thereafter, maybe, voters will trust the party to redistribute wealth, and risk a new balance of spending. But not until then - and that probably means not until a second term.

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