TELEGRAPH 25.4.09
Will the last person to leave Gordon Brown's Britain turn out the
lights?
The 50 per cent tax increase has reneged on New Labour's central
promise - not to punish the rich. A key architect of Blair's
victories says the party's over now.
By Lance Price
RIP New Labour. Born July 21 1994; died April 22 2009.
Cause of death: drowning in a sea of debt.
New Labour passed away surrounded by its family and loved ones.
It was survived by a shattered party.
Memorial service scheduled for May 2010.
No flowers.
The obituary writers have been hard at work since this week's Budget
statement. The facts seemed clear enough. New Labour, which was born
the day Tony Blair was elected leader of the party 15 years ago, had
been laid to rest by Alistair Darling with a minimum of ceremony.
The Chancellor sometimes has the look and manner of an undertaker,
although on Wednesday he was wearing a natty, colourful new shirt and
tie that were highly inappropriate for a funeral. This was a death in
suspicious circumstances if ever there was one.
Tony Blair was absent from the scene, but New Labour's godparents,
Gordon Brown and Lord Mandelson, were present and looking suitably
solemn. Denial and disbelief are not uncommon at times of great
emotional suffering, so perhaps they could both be forgiven for their
refusal to accept the passing of something that had once seemed so
vigorous, so full of promise.
Like so many others, I watched the audacious land grab on the centre
ground with awe in 1997. The bold colour posters signed personally by
Blair, including one that said ''no rise in income tax rates'', were
devastatingly effective.
A year later I left journalism and joined Number 10 as deputy to
Alastair Campbell. We felt like Masters of the Universe. Blair
dominated the political scene more comprehensively even than Margaret
Thatcher had done at the height of her power.
Blair promised that having campaigned as New Labour he would govern
as New Labour and we were sure that if the winning formula could be
preserved, nothing would stop us triumphing again.
People sneered at the spin but we believed that by ensuring high
earners were happy and kept paying their taxes we would be able to do
more for the poor than any previous Labour government had done by
squeezing the rich until the pips squeaked.
It was Gordon Brown who, as shadow chancellor, first stunned the
political world by announcing on the Today programme in January 1997
that ''we will leave the basic rate of tax unchanged and we will
leave the top rate of tax unchanged".
The promise was central to New Labour's appeal to those who had never
trusted the party before and was explicitly repeated in the 2001
election, that I helped plan, and again in 2005. More than any of the
pledges, signed personally by Blair and endorsed wholeheartedly by
Brown, the tax promise embodied the spirit of New Labour and its
commitment not to punish success. The successful will certainly be
feeling punished now.
On Wednesday, shortly after that promise was broken, not stealthily
but very publicly, Brown insisted the new top rate of 50 per cent was
''tax for a purpose". The party was still in favour of aspiration, he
said, ''we are about helping people make the most of their potential.
New Labour, that's what we're about''.
Lord Mandelson, who once famously declared that New Labour was
''intensely relaxed about people getting filthy rich'' now insisted,
''It's most certainly not the end of New Labour. We are not a high-
tax party. We don't tax for its own sake".
Those words deserve careful scrutiny. Brown and Mandelson are the
most cunning and calculating of all politicians. Neither speaks
without first carefully weighing every syllable. ''Tax for a
purpose'' - but what purpose? If not ''tax for its own sake'' then
for whose sake?
According to the Institute of Fiscal Studies, the higher rate of 50
per cent on earnings over £150,000 a year is unlikely to reap much
extra revenue - if any. High earners are past masters at legal tax
avoidance and are better able than most to move abroad in search of
less onerous tax regimes. New Labour eschewed punitive taxation for
that very reason, because it knew it was a blunt and ineffective
instrument for redistributing wealth. Neil Kinnock had paid a high
price for advocating higher taxes for the better-off.
New Labour was invented so no future leader would see their head in a
light bulb on the front page of The Sun as Neil Kinnock did in 1992,
with a headline asking the last person to leave Britain to turn out
the lights in the event of a Labour victory.
The truth is that New Labour has been in a very bad way for a long
time. The recession made the hope and promise of Tony Blair's
personal foreword to the election manifesto of 2005, with its
emphasis on wealth creation and social justice and the talk of ''an
unprecedented opportunity for progressive politics'', sound absurd in
its cheery optimism.
To be fair, four years ago nobody was predicting a global downturn on
the scale we have seen. Brown is calculating that fair-minded voters
will accept that promises, even manifesto promises, made in healthier
economic times cannot be sacrosanct when the world turns upside down.
But it is not just New Labour economics that have had to be
sacrificed. Even before the credit crunch, the politics of New Labour
were on life support.
The declaration of a fresh start based on principle and integrity
that had brought the party tens of thousands of new members in the
1990s has long been buried under the cynicism of Iraq and the scandal
of cash for honours, to name but a few.
With membership subscriptions drying up and wealthy donors locking
away their cheque books, the party was forced to fall back on its
traditional source of income, the trade unions. With it came the kind
of influence on policy that New Labour was supposed to have ended.
The giant union Unite has as much access to Downing Street as did the
TGWU when it was led by the redoubtable Jack Jones, who died last
Tuesday on the eve of the Budget. Jones, who lost his job in the
Great Depression of the 1930s, was thought of as one of the most
powerful men in Britain under the last Labour government of the pre-
Blair era.
The unions can no longer hold the country to ransom, as Jones and his
partner, Hugh Scanlon of the AEEU, once did, but the threat to
withdraw their financial support is like a gun to the head of today's
Labour Party.
Not surprisingly, the unions have welcomed the new tax on the rich.
Brown has always had more of a taste for class war than Blair ever
did. In public he would attack enemies like the ''old boy network''
and the ''elitism'' of Oxbridge while in private promising to be a
more traditional Labour prime minister once he took over.
The campaign he sanctioned against ''Tory toffs'' in last year's
Crewe and Nantwich by-election was the kind of crude class war
tactics that made Blairites squirm. And Brown is largely silent on
the kind of totemic policies that once defined New Labour, like
choice in health and education through foundation hospitals and city
academies. If, as the party's polling expert Lord Gould once called
it, New Labour is an Unfinished Revolution, then its vanguards have
been in retreat for two years now.
When Mark Twain read his own obituary he cabled the Associated Press
to tell them: ''The report of my death was an exaggeration." It is
too early for David Cameron or Derek Simpson of Unite to dance on New
Labour's grave. There are plenty of people in the Cabinet ready to
give it the kiss of life at the first opportunity. For now it lies in
a coma; the prognosis for a recovery in the short term looks bleak.
And having delivered three remarkable election victories, the chances
of it reviving in time to help secure a fourth are receding every day.
-----------------------------------------------
Lance Price is a former Labour Director of Communications and author
of 'The Spin Doctor's Diary' (Hodder and Stoughton, 2005);
www.lanceprice.co.uk
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