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Last Updated: Tuesday, 29 August 2006, 15:57 GMT 16:57 UK
Brown hits back in Labour tax row
Gordon Brown
Mr Brown has been on paternity leave since his son's birth in July
Gordon Brown has warned colleagues against making unfunded tax cuts - in what is being seen as a veiled attack on ex-transport minister Stephen Byers.

Speaking out for the first time since the birth of his second son James, Mr Brown says such proposals will bring about a "return to the bad old days".

He spoke out after Mr Byers called for the abolition of inheritance tax.

Minister Ed Balls - one of Mr Brown's closest allies - also warned Labour "mavericks" not to divide the party.

'Playing politics'

According to Mr Byers, who was transport secretary between 2001 and 2002, rising house prices threaten to push millions more within the "net" of inheritance tax, which was designed to hit the very wealthy, rather than ordinary families.

He says scrapping the tax would help Tony Blair's successor to show that New Labour's middle class supporters have not been forgotten.

To make unfunded promises, to play fast and loose with stability (indeed to play politics with stability) is a return to the bad old days
Gordon Brown

But in an article in the Financial Times, the chancellor warned: "No political party will be trusted if it promises stability in one breath and unfunded tax cuts in the next.

"To make unfunded promises, to play fast and loose with stability (indeed to play politics with stability) is a return to the bad old days - something I will never do and the British people will not accept."

Mr Balls, economic secretary to the Treasury, also stressed that Labour could not have a serious debate on policy if it did not say how it would pay for the measures proposed.

He told BBC Radio 4's Today programme: "We have seen in the last few weeks, both from Stephen Byers and from the Tories, proposals for large and unfunded and uncosted tax proposals on inheritance tax or on stamp duty.

"It seems to me we can't have a serious debate unless you are willing to say where you are going to pay for these measures...

"To go down the route of short term sectional gestures on taxation would be exactly the wrong way to make sure we can address these long term policy issues."

Blair succession

The warning came after Tory shadow chancellor George Osborne said he wanted to look at abolishing stamp duty on share trading, to help boost pensions.

Mr Balls also stressed that Labour had to handle its leadership transition in "a united, orderly and disciplined way", while at the same time contrasting its position with the Conservatives.

He stressed that it would be "unforgivable" if the leadership contest caused the same divisions faced by the Tories during their leadership battle two decades ago.

"I think people remember what happened to the Tories in the late 1980s/early 1990s, where their transition descended into division," he said.

Unity needed

"I think there is clarity that there is going to be a transition and the successor will have ample time to prepare.

"There is a big difference between now and the late 1980s in that our economy is strong and also, I don't believe that our government is in any way divided in the way the Tories were then on Europe.

"But at the same time, to allow divisional factionalism, to take over would be unforgivable and in my view that is not the view of people you might call Blairites or Brownites in the government.

"There are a few mavericks, but put them to one side.

"The vast majority of our party want a united transition, an orderly one, focused on long term policy and make sure we can build trust with the public and show that we are the government party of Britain today."

Boundary changes

Meanwhile, Labour MPs in Yorkshire have vowed to challenge a planned redrawing of constituency boundaries in the county that would wipe out Mr Balls's Normanton seat.

The deadline for an expected legal challenge to the Boundary Commission's proposal by a local Labour-run council passed without action last week.

That led to speculation that Mr Brown - tipped to offer his former adviser a key Cabinet role - would not be calling a snap general election if he succeeded Mr Blair.

Legal action would have meant the changes being put off long enough for an election to be fought on the existing boundaries.

But Hemsworth MP Jon Trickett insisted the fight was not over.


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