Labour issues tax challenge

SHADOW Chancellor Gordon Brown yesterday sought to bury once and for all Labour's "tax and spend" image, declaring that a Blair government will not "penalise or punish" taxpayers.

The pledge is contained in an election strategy report from the party's Economic Commission, which was approved by Labour's national policy forum which met in private in Reading.

It forms part of a radical 10-point plan for implementing Labour tax principles, including a strongly-traditionalist promise to sustain progressive taxation so that the well-off pay more.

The policy document, Economic and Employment Opportunity for All, also revives the party's commitment to "the goal of full employment" - despite its connotations of old Labour as expressed in the wartime White Paper, in which the Government "accepts one of their primary aims and responsibilities, the maintenance of a high and stable level of employment".

However, it states that this goal must be viewed in new circumstances. "We must meet the 1944 commitment in a new world of work where hardly anyone can assume a lifetime in the same job or the same company," the paper argues.

Labour will seek to abolish long-term unemployment, and get rid of youth unemployment by guaranteeing every young jobless person the opportunity to "work with training".

The Economic Commission confirms the party's policy of introducing a national minimum wage, but insists that it must be done "sensibly and flexibly, taking full account of the economic and employment consequences, as well as the need to remove poverty pay".

However, the commission says it would be irresponsible for the Shadow Chancellor to make commitments on the precise level of tax rates and allowances so far away from the election. But it concedes that Labour "should and will" lay out the guiding principles of its tax regime.

The first principle is that "tax should encourage work and opportunity and reward effort; we do not tax for taxation's sake... but we will end the privileged treatment of windfall gains and monopoly profits."

One new idea was floated in yesterday's conference. Labour wants to increase the take-up of state benefits by the poor, and plans to give the job to the taxman. "We propose to place the responsibility for the initial identification of a potential Family Credit recipient on the Inland Revenue," the party says.