Election '97 : Tax-and-spend promises earn Lib Dems a flattering attack

Labour yesterday delivered a dramatically tough attack on the Liberal Democrats' tax and spending policies - prompting a suspicion that Paddy Ashdown's party is making campaign headway.

At his daily press conference, Mr Ashdown underlined the Liberal Democrat promise to offer clear, costed commitments in return for "modest, targeted taxes".

Citing the example of cuts in class sizes or shortened waiting lists for hospital treatment, he said: "We believe people are prepared to pay a little more, so long as they know the money will be well spent."

Baroness Williams - the former Labour cabinet minister and one of the Social Democrats' founding Gang of Four - told the press conference that the tax message was getting across to the voters.

Fresh from a campaign tour, she reported: "It is clear that our simple message on tax ... is very popular." As for Labour, she said that there was a quite extraordinary level of bewilderment about what they stood for.

"It is a kind of Cheshire cat campaign where there is nothing left at the end but the smile.

"It is not that they don't think Labour stands for social justice any more, it is that they don't know what it stands for ... There is a very strong sense that Labour has given words of support to all the things we both agree upon, but that is not accompanied by any clear commitment of any kind to finance it."

Whether Labour was stung by that attack, or whether it is sensitive to constituency reports of a growing support for the Liberal Democrats, Gordon Brown, the shadow Chancellor, yesterday delivered a flatteringly strong criticism of the party at Labour's press conference.

"I think it is about time that the Liberal Democrats, who say that they want honesty about finance, honestly told us how all their spending commitments are to be paid for," he said.

Mr Brown then read out a lengthy list of Liberal Democrat spending commitments, from free eye and dental checks through to an increase of 3,000 in the number of police officers, adding: "And the Liberals try to tell us this can be paid for at 45 pence a week.

"I ask you, 'Do their sums add up? Where is the money going to come from?' The only reason they can get away with these spending commitments, that are completely uncosted, is because nobody thinks they are going to be elected. They are being completely dishonest in their claims."

Tony Blair, the Labour leader, yesterday went out of his way to urge reporters to examine the Liberal Democrat claims, saying: "The Liberal Democrat proposals, particularly on taxation, bear a little scrutiny."

The Liberal Democrat claim about a cost of 45p a week relates specifically to the proposal to raise the rate of income tax by a penny, to help pay for the pounds 2bn-a-year education investment plan.

The party has also listed a number of other tax increases and spending cuts to fund its programme. And the Liberal Democrats are quite specific in saying that free eye and dental checks, and a freeze on prescription charges, would be more than covered by an extra 5p tax on a pack of cigarettes, and an extension of employers' national insurance contributions to taxable benefits in kind.

Donald Macintyre, page 19