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Last Updated: Thursday, 18 March, 2004, 11:48 GMT
Tax takes election centre stage
By Nick Assinder
BBC News Online political correspondent

If there was any lingering doubt over what will be the core issue at the next election, Chancellor Gordon Brown has removed it.

Gordon Brown
Brown sought to deny tax hike claims
To borrow from a US election slogan - it's taxes, stupid.

Pre-election announcements by Labour and the Tories have made it abundantly clear that the next campaign will focus on precisely how each of the parties would pay for their public spending programmes.

The Tories mapped out that battleground some weeks ago when Shadow Chancellor Oliver Letwin warned that Labour's "borrow now tax later" policies would inevitably lead to tax hikes if it won a third term.

He suggested the Tories could fund spending through major efficiencies and savings in Whitehall.

There would be no tax increases under the Tories. Indeed, when they could manage it, there would be tax cuts.

Astonishing sight

Then along came Gordon Brown with his pre-election Budget that promised to continue pouring money into the public services by, coincidentally, making savings major efficiencies and savings in Whitehall.

One rug neatly ripped from under Mr Letwin's feet.

Charles Kennedy
Kennedy got there first
And, of course, everyone spotted the fact that the Liberal Democrats - whose policy to slap a penny on tax to fund services was effectively stolen by Labour with their National Insurance rise - had already come up with their version of that one weeks before that.

Meanwhile, we were all presented with the genuinely astonishing sight of a Labour chancellor boasting about his plans to cut 40,500 jobs.

So, with the unofficial election campaign now underway, voters know exactly where it is all heading.

And, in some ways, it promises to be reminiscent of an old-style campaign with the two major parties apparently reverting to type.

The Tories will accuse Labour of planning large tax increases to fund their profligacy. And they will remind voters of the tax increases already levied by Mr Brown.

Tax and spend

And Labour will warn that the Tories will slash public services to offer tax cut "bribes".

There is always an undercurrent, at the very least, of this in all election campaigns.

Howard wants to cut taxes
But one of Tony Blair and Gordon Brown's greatest New Labour successes was to effectively kill off their party's old tax and spend reputation.

That did previous Labour campaigns immense damage and, arguably, lost them the 1992 general election.

The issue was pretty much neutralised in the 1997 poll and fell completely off the radar in the 2001 non-event. That will not happen this time around.

The issue of which party can best be trusted to improve services without sticking their hands permanently into your wallet or purse will be top of the agenda next May - assuming that is the prime minister's favoured election timing.

Chew away

But one question will hang over all their manifestos.

Just about every administration in recent history has promised to cut waste and improve efficiency in Whitehall.

The results have been, to say the least, unimpressive.

What all three major parties are now suggesting is radical stuff with severe consequences for jobs in the civil service.

So the question that will chew away at them all between now and the election is whether they could actually pull it off.

Or are the policies doomed to failure and, therefore, bound to throw the parties back onto the old remedies of either tax increases or cuts to services?

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