Blair offers an olive branch to Short

Tony Blair moved yesterday to disarm the worries of some in his party about his "dictatorial" style, by guaranteeing a Cabinet seat for Clare Short should he become prime minister.

Asked on the BBC's Breakfast with Frost if the outspoken left-winger, demoted last month, would definitely be in his first Cabinet, he replied: "She is entitled as a member of the Shadow Cabinet to be so and I would be delighted to have her there."

A spokesman for the Labour leader later sought to play down the pledge, describing the vexed issue of the rule requiring an incoming Labour prime minister to appoint all the elected members of the Shadow Cabinet to the real Cabinet as "a bridge to cross at the time".

Mr Blair again dismissed the call for higher taxes on the better-off - one of the crimes for which Ms Short was punished. "I don't believe that's the way we need to go now," he said. "I don't believe we're in a situation where you're going to say to people, 'Some people are doing very successfully, so we'll soak the rich to give a few more pounds in benefit to the badly off.' " The unemployed needed jobs, not a little extra benefit, he said.

The Labour leadership faces a dilemma over its response to likely Conservative tax cuts in the Budget in three months, with some speculation that Kenneth Clarke, the Chancellor, will slash the standard rate of income tax from 24p to 20p, offsetting the pounds 7.6bn cost with less visible tax rises elsewhere.

"When the Government publishes its Budget in November, we will respond, and we will say whether any income level in our view requires higher taxes," said Mr Blair. "We will be entirely open with people."

In a series of interviews yesterday Mr Blair and his deputy John Prescott sent mixed signals about the class identity and ideology of New Labour. Mr Prescott pointedly refused to describe himself as a "social democrat", a label happily accepted by Mr Blair as "interchangeable" with "democratic socialist".

The Labour leader seemed uncomfortable with the characterisation of him by the Labour backbencher Austin Mitchell as "upper class". "I think a lot of rubbish is talked about class," he said.

He was keen to present Labour as a party of the middle class, while not forgetting the "so-called" working classes. "A lot more people are middle class nowadays," Mr Blair told the Sunday Times. "Our task is to allow more people to become middle class. The Labour Party is the party of aspiration."

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