Cruddas in 45% top rate tax call

By Brian Wheeler and Emma Griffiths
BBC News, Labour Party Conference, Manchester

Mr Cruddas has been tipped as a left wing leadership contender

Influential Labour backbencher Jon Cruddas has called for a new 45% top rate of income tax to fund tax cuts for low and middle income workers.

Mr Cruddas said too many people had been caught by the current top rate of 40% - but those earning more than £175,000 should pay more.

Speaking at a Labour conference fringe meeting, he said the party needed "clear dividing lines" from the Tories.

He also savaged rebel MPs who have been calling for a leadership contest.

Mr Cruddas told the Compass fringe meeting that the financial turmoil of recent weeks had given Labour a chance to have a radical policy rethink and a "return to the values and ethics" the party believed in.

'Personality driven'

He also attacked rebel MPs who have been calling for a leadership contest, who he accused of being on a "search and destroy mission".

He accused them of having no alternative policies and of waging a "personality driven campaign which has no alternative personality to put in place".

The Dagenham MP, who narrowly missed out on Labour's deputy leadership last year, has rallied behind Gordon Brown in recent weeks, even suggesting he would accept a job in the government after turning one down last year.

Just as a certain group tried to colonise Thatcherism in its final days, a rump is trying to colonise Blairism Jon Cruddas

He was one of 20 Labour MPs to sign a letter to all their parliamentary colleagues urging them to "stand up and be counted" by joining a loyalist campaign launched by former deputy prime minister John Prescott to secure a fourth term in power for the party.

Speaking at the Compass fringe meeting, Mr Cruddas turned his fire on a "hard line" group of Blairites who he said were trying to destroy the party by pursuing discredited free market ideas.

This Blairite "rump" had adopted a "shrill and sour" language on issues such as immigration, asylum seekers and "even council house dwellers" and had adopted a "contorted" version of Blairite free market ideology.

'Parade of Blairites'

"Just as a certain group tried to colonise Thatcherism in its final days, a rump is trying to colonise Blairism," he told the meeting.

And he warned the in-fighting between the different wings of the party had injected so much "poison in the system, at some stage we may reach critical mass".

The rebels were also heavily criticised at a separate fringe meeting of the Campaign Group of Socialist MPs.

'Reign of greed'

Labour backbencher Diane Abbott said she had been "appalled" at the actions of the rebels, who she dismissed as "a parade of Blairites".

"These are people who voted for the war in Iraq, voted to bring in tuition fees, voted for the 10p tax cut and they have the nerve to talk about their conscience," she said.

"It has been absurd," she said, saying she hoped the rebels would be marginalised at the conference and said it was for socialists to offer an "alternative analysis and an alternative way forward" after the "implosion" of the globalised market.

Her colleague John McDonnell, who last year tried to stand as a left-wing leadership candidate but failed to get the required nominations, agreed, adding: "What's going on at the moment is a fight between the Brownites and the Blairites on the basis of personalities without a political difference between them."

He said a radical change in policy was needed if Labour was to win the next election and said the government should recognise its role in the current economic turbulence by giving a free rein to the market which he described as "the free reign of greed and that's what has brought us to this crisis."

"We have got 20 months to save this government," he said, calling for an end to PFI and public private partnership deals, a full restoration of trade union rights and raising the minimum wage.