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EDITIONS
Blair years Monday, 6 May, 2002, 08:37 GMT 09:37 UK
Labour's 1997 pledges: Economics and employment
The following page details Labour's activity in government on economic, business and employement policy, based on what it committed itself to in the manifesto. Some pledges have been omitted for the sake of brevity. No judgement has been made to the inherent value of the pledge, but important criticisms are included where applicable.

You can choose another policy area below:

Introducton and explanation
Economy
Health
Education
Home affairs
Environment
Welfare
Constitution
Foreign/Defence

WHAT THE MANIFESTO SAID:
"We are pledged not to raise the basic or top rates of income tax throughout the next Parliament."
CONCLUSION: PLEDGE MET
The top-rate has remained at 40% since 1997. The basic rate was actually reduced from 23% to 22% in 2000. The total tax burden under Labour has risen as the government has increased indirect taxation.

WHAT THE MANIFESTO SAID:
"Our long-term objective is a lower starting rate of income tax of ten pence in the pound."
CONCLUSION: PLEDGE MET
The measure was introduced in the 1999 budget.
WHAT THE MANIFESTO SAID:
"We will cut VAT on fuel to five per cent. We renew our pledge not to extend VAT to food, children's clothes, books and newspapers and public transport fares."
CONCLUSION: PLEDGE MET
Chancellor of the Exchequer Gordon Brown cut VAT on fuel to 5% in his first budget of 1997. VAT has not been levied on food, children's clothes, books and newspapers and public transport fares.
CRITICISMS AND QUALIFICATIONS
Critics say that while VAT has gone down on domestic fuel, the government has done little to help those consuming other fuels such as petrol. This led to the nationwide fuel protests of September 2000.

WHAT THE MANIFESTO SAID:
"We will match the current target for low and stable inflation of 2. 5 per cent or less."
CONCLUSION: PLEDGE MET
Labour's policy is a 2.5% target for underlying inflation, with a margin of error of plus or minus 1%. Inflation has stayed within this band virtually throughout Labour's time in government.
CRITICISMS AND QUALIFICATIONS
Given that the Bank of England has been given operational independence to set interest rates, one of the most significant factors to affect inflation, it is debatable whether or not Gordon Brown or the bank's Monetary Policy Committee can take more credit for this success.
WHAT THE MANIFESTO SAID:
"We will reform the Bank of England to ensure that decision-making on monetary policy is more effective, open, accountable and free from short-term political manipulation."
CONCLUSION: PLEDGE MET
The Bank of England was given independence and control over interest rates in 1997.
CRITICISMS AND QUALIFICATIONS
Accountability and openness remain outstanding issues for critics. While the Treasury Select Committee holds hearings for new members of the bank's Monetary Policy Committee, it cannot reject candidates. Secondly, minutes of the MPC's deliberations are not released until some weeks after its decision on rates.
WHAT THE MANIFESTO SAID:
"For the next two years Labour will work within the departmental ceilings for spending already announced."
CONCLUSION: PLEDGE MET
In 1997-99, Labour stuck rigidly to the spending plans it inherited from the Conservatives, even though this sparked opposition on its own backbenches.
WHAT THE MANIFESTO SAID:
"We will conduct a central spending review and departmental reviews to assess how to use resources better... "
CONCLUSION: PLEDGE MET
The government carried out comprehensive spending reviews in 1998 and 2000 which set the priorities for departmental spending for future years.
WHAT THE MANIFESTO SAID:
"We will enforce the 'golden rule' of public spending - over the economic cycle, we will only borrow to invest and not to fund current expenditure..."
CONCLUSION: PLEDGE MET
On the government's own terms. The cyclically adjusted current budget has remained in surplus.
CRITICISMS AND QUALIFICATIONS
Critics say that this is was vague statement that is easy to fudge. For instance, there is a lot of debate about how exactly you define the economic cycle or "investment" itself. Other critics say that the pledge was largely meaningless for the first years of the government as there was little noticeable investment in public services.
WHAT THE MANIFESTO SAID:
"We will introduce a new individual savings account and extend the principle of Tessas and Peps to promote long-term saving."
CONCLUSION: PLEDGE MET
Individual Savings Accounts were introduced in April 1999 to replace both Tessas and Peps. There are three different versions which allow investors to put investments into tax-free cash savings, insurance or stocks and shares.
WHAT THE MANIFESTO SAID:
"We will review corporate and capital gains tax regimes..."
CONCLUSION: PLEDGE MET
The government has cut both corporation tax and capital gains taxes with the explicit aim of encouraging investment. For instance, Gordon Brown's 1998 Budget cut corporation tax to 30p.
CRITICISMS AND QUALIFICATIONS
Businesses have reacted with some hostility to the 2002 budget saying that the 1p hike on employer's National Insurance Contributions (NICs) is a major blow to small companies and manufacturing. They say that the NICs rise for NHS investment has more than offset positive measures such as tax credits for research and development.
WHAT THE MANIFESTO SAID:
"As an early priority we will reform Britain's competition law..."
CONCLUSION: PLEDGE MET
The Competition Act of 1998 set up the Competition Commission, which has recently conducted investigations into instances of market abuse into banking and supermarkets.
WHAT THE MANIFESTO SAID:
"In the utility industries we will promote competition wherever possible. Where competition is not an effective discipline, for example in the water industry which has a poor environmental record and has in most cases been a tax-free zone, we will pursue tough, efficient regulation in the interests of customers..."
CONCLUSION: PARTIALLY MET
The government introduced the Water Industry Act in 1999 and the Utilities Act in 2000. However, further water regulation and telecoms regulation was dropped from the latter Act with consumers and environmental groups saying much work remains to be done.
WHAT THE MANIFESTO SAID:
"A Labour government will overcome the problems that have plagued the Private Finance Initiative at a national level. We will set priorities between projects, saving time and expense..."
CONCLUSION: PARTIALLY MET
The government has sought to simplify PFI through its new incarnation as Public Private Partnerships. These have increasingly brought private business into new areas of public service beyond capital spending such as hospital building. However PFI projects remain a miniscule part of total government spending. Economists, such as the Institute for Fiscal Studies, caution that ministers have not resolved problems over who is ultimately responsible f things go wrong - government or the private sector. Nowhere has this been seen more than with the protracted row over the future of the London Underground with the government saying the PPP scheme offers value for money and opponents, led by London Mayor Ken Livingstone, saying that it leave safety in the hands of unaccountable private companies.
WHAT THE MANIFESTO SAID:
"We will aim to simplify and speed up the planning process for major infrastructure projects of vital national interest."
CONCLUSION: PLEDGE NOT MET
In July 2001, Stephen Byers announced proposals for planning law reform. The consultation ended in March this year but no legislation has yet been brought forward.
WHAT THE MANIFESTO SAID:
"We will ensure that self-financing commercial organisations within the public sector - the Post Office is a prime example - are given greater commercial freedom..."
CONCLUSION: PLEDGE MET
The post office has been given greater freedoms - but has also lost its monopoly on a number of service. There are controversial proposals to end the Post Office's letters monopoly by 2006, something that the business says threatens its very survival.
WHAT THE MANIFESTO SAID:
"Support for small businesses will have a major role in our plans for economic growth. We will provide for statutory interest on late payment of debts"
CONCLUSION: PLEDGE MET
The Late Payment of Commercial Debts Act 1998 allows firms to claim interest on debts owed, although evidence suggests it is not having much effect.
WHAT THE MANIFESTO SAID:
"We will cut unnecessary red tape [for small businesses]"
CONCLUSION: PLEDGE NOT MET
This remains one of the most controversial Labour pledges. The government set up the Better Regulation Task Force to look at the burden on business and recommend change. But the Confederation of British Industry says that the government has actually imposed an extra £16bn of costs on business. This includes the minimum wage and working time directive.
CRITICISMS AND QUALIFICATIONS
Supporters of the government say that the CBI overstates the case. It says that measures such as the minimum wage have proved a positive benefit to the British economy by safeguarding wages and putting paid to unscrupulous employers. The application of the working time directive in the UK is different to others parts of the European Union with many sectors allowed exemptions.
WHAT THE MANIFESTO SAID:
"We will establish one-stop regional development agencies to co-ordinate regional economic development..."
CONCLUSION: PLEDGE MET
They have been up and running for several years, having been established under the terms of the Regional Development Agencies Act 1998.
WHAT THE MANIFESTO SAID:
"We support a major push to promote energy conservation - particularly by the promotion of home energy efficiency schemes ¿"
CONCLUSION: PLEDGE MET
The Energy Efficiency Commitment 2002-05 places an obligation on energy suppliers to promote improvements in energy efficiency by domestic consumers.
WHAT THE MANIFESTO SAID:
"We are committed to an energy policy designed to promote cleaner, more efficient energy use and production, including a new and strong drive to develop renewable energy sources such as solar and wind energy, and combined heat and power. We see no economic case for the building of any new nuclear power stations."
CONCLUSION: PLEDGE MET
The Government says that 5% of all the UK electricity needs should be met by renewable sources by the end of 2003 and 10% by 2010. A recently-commissioned government report recommended that the UK should set a target of 20% for 2020.
CRITICISMS AND QUALIFICATIONS
Nuclear power remains a more difficult issue. As the current stations are decommissioned, the UK need to either vastly increase green energy production or burn more fossil fuels to fill the gap. The government's chief scientific advisor believes that green energy cannot meet the need and has called for new nuclear stations. The government has yet to commit itself one way or the other.
WHAT THE MANIFESTO SAID:
"The key elements of the trade union legislation of the 1980s will stay - on ballots, picketing and industrial action."
CONCLUSION: PLEDGE MET
None of the reforms cited in the pledge have been repealed.
WHAT THE MANIFESTO SAID:
"People should be free to join or not to join a union."
CONCLUSION: PLEDGE MET
Labour reversed the previous Government's policy of not allowing GCHQ workers to join a union. 1980s legislation outlawing the closed shop has also been retained, so workers are still free not to join a union if they so wish.
WHAT THE MANIFESTO SAID:
"Where they do decide to join, and where a majority of the relevant workforce vote in a ballot for the union to represent them, the union should be recognised..."
CONCLUSION: PLEDGE MET
Unions now get automatic recognition in a firm if more than 50% of workers are members. If membership is lower, a union can gain recognition in larger firms where a ballot shows that a majority of those voting, and at least 40% of those eligible to vote, are in favour of recognition.
WHAT THE MANIFESTO SAID:
"We support too the Social Chapter of the EU, but will deploy our influence in Europe to ensure that it develops so as to promote employability and competitiveness, not inflexibility."
CONCLUSION: PLEDGE MET
The Government signed up to the Social Chapter early in the last Parliament. It has also pushed competitiveness in Europe with varying success.
WHAT THE MANIFESTO SAID:
"There should be a statutory level beneath which pay should not fall - with the minimum wage decided not on the basis of a rigid formula but according to the economic circumstances of the time."
CONCLUSION: PLEDGE MET
The minimum wage was introduced in April 1999 after a consultation on its level and vociferous campaigning on opposite sides by unions and employers. Since then, it has largely ceased to be a major political issue other than there remains opposition within Labour itself and the unions to the split rate which means that 18-21-year-olds are paid less. Low pay campaigners also say that the wage should be automatically increased annually because of inflation.
WHAT THE MANIFESTO SAID:
"We will give 250,000 under-25s opportunities for work, education and training."
CONCLUSION: PLEDGE MET
One of the Government's key five pledges of the 1997 campaign. The target was reached on 30 November 2000. Some 345,000 people have now moved though the New Deal scheme for young people into work.
CRITICISMS AND QUALIFICATIONS
Questions have been raised about the costs of the New Deal. It is argued that with unemployment falling from before Labour came to power, this group would have found work without needing the complicated scheme.
WHAT THE MANIFESTO SAID:
"All young people will be offered part-time or full-time education after the age of 16. Any under-18 year-old in a job will have the right to study on an approved course for qualifications at college."
CONCLUSION: PARTIALLY MET
All young people aged 16-18 are, of course, entitled to full or part-time education. In-work training is more complicated. Employees aged 16 or 17 are only eligible to paid time off for study or training if they meet certain criteria based on their previous educational achievement. In theory this meets the manifesto pledge but in practice means that some may not have access.
WHAT THE MANIFESTO SAID:
"We will replace the failed Youth Training scheme with our new Target 2000 programme, offering young people high-quality education and training."
CONCLUSION: PLEDGE NOT MET
It is not at all clear what Target 2000 meant or was intended to be. Some of its issues were addressed by the New Deal and other organisations. One of the cornerstones, however, of the government's life-long learning policy, Individual Learning Accounts (ILAs), was suspended in December 2001 after reports of wide-scale fraud.
WHAT THE MANIFESTO SAID:
"Once the youngest child is in the second term of full-time school, lone parents will be offered advice to develop a package of job search, training and after-school care to help them off benefit."
CONCLUSION: PLEDGE MET
200,000 lone parents have been through the New Deal for lone parents - around half have found work. 40% of lone parents are in work - the Government aim to get this up to 70%. But two thirds of single parents are living on or below income support level - compared to 27% of two parent families.

WHAT THE MANIFESTO SAID:
"In new and innovative 'Employment Zones', personal job accounts will combine money currently available for benefits and training, to offer the unemployed new options ... we will co-ordinate benefits, employment and career services¿"
CONCLUSION: PLEDGE MET
The Government launched the first fifteen Employment Zones on 9 March 2000. The Zones aim to provide solutions for areas experiencing high levels of long term unemployment.

WHAT THE MANIFESTO SAID:
"We will start with a clampdown on Housing Benefit fraud, estimated to cost £2 billion a year and will maintain action against benefit fraud of all kinds..."
CONCLUSION: DEBATABLE
The 2001 Social Security Fraud Act aims to improve measures to cut benefit fraud. Defrauders face 'a two strikes and you're out'. Critics says the need for this proves the failure of the 1999 anti-fraud strategy. Fraud in social security benefits costs the taxpayer £4 billion every year according to the Commons' Public Accounts Committee, which supports many of the government's initiatives but worries at the lack of urgency.

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Introducton and explanation
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Health
Education
Home affairs
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Welfare
Constitution
Foreign/Defence


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