AS political parties: death of new Labour?

It may be exaggerating matters to talk about a red flag flying over Number 11, but there is a strong argument to say that this year’s Budget is the final nail in New Labour’s coffin

Today’s Times provides a rich vein of material for those looking at questions on differences between the two main parties or discussions of whether the modern Labour Party has remained committed to its traditional principles.

It is not important for candidates to know the fine detail of Mr Darling’s package of proposals, but they should be able to focus on the headlines announcements.

From the front page:

‘Alistair Darling read the last rites over new Labour yesterday by saddling Britain’s highest earners with a new 50 per cent tax rate as he struggled to dent a £1.4 trillion mountain of debt.

About 350,000 people who earn more than £150,000 a year face a triple hit of charges. Their top rate of tax will rise from 40 per cent to 50 per cent next April
David Cameron said that any claim that Labour had to economic competence was “dead, over, finished”.

The richest 2 per cent of the working population will bear the brunt of measures, which included a fiercer than expected assault on public spending, designed to show that somehow over eight years – two years longer than expected – Britain’s finances might get back on course.

The income tax rises will come in at the start of next year’s general election campaign, assuming that Gordon Brown goes to the country on May 6, local elections day.

For three elections Labour’s flagship manifesto pledge has been not to raise the basic or top rates of tax. Mr Darling has broken it because he felt that it was right for the better-off to shoulder the burden, but Labour’s claim to be the party of aspiration will suffer. Yvette Cooper, the Treasury Chief Secretary, said it was the right response to “exceptional circumstances”.

The 50 per cent rate replaces the 45 per cent level announced in November’s PreBudget Report and will come in a year earlier than planned. Spotting an obvious trap, the Tories will not commit to reversing it but will instead try to avoid implementing the 0.5 per cent rise in national insurance still in pipeline from the PreBudget Report at the end of last year.

The tax rises were clearly designed to appeal to core Labour voters at a time when the public sector is being squeezed.’

Echoing this theme, the editorial states:

‘The political centrepiece of the Budget was a series of measures that sharply increase taxes on high earners. That this had a frivolous aim - to discomfort the Conservatives - does not rob it of a serious impact. It is a declaration of economic and political war on the country’s entrepreneurial class.

In successive elections Tony Blair appeared to understand that social justice and prosperity for all were possible without penalising the better- off. Before the 1997 election he promised not to increase the top rate of tax. This solemn pledge, plastered on billboards all over the country, was renewed before the 2001 and 2005 elections.

Now it has been broken. The Chancellor has not simply increased the top rate to 50 per cent, he also moved the starting date to within this Parliament in direct breach of a central manifesto pledge. As the birth of this pledge was symbolic, so is its death. With it dies Mr Blair’s political project. Labour is once again the party of massive public debt, inadequately controlled public spending and taxes on the wealthy.’