Labour in poll position as ghosts laid to rest

For Tony Blair, it seems, things can still only get better

For Tony Blair, it seems, things can still only get better. That, at any rate, is the verdict of the pollsters with just five campaigning days left in the British general election. To which might be added the observation that, somewhere along the way, the polls appear to have got it wrong.

No, that is not an exclusive Irish Times prediction of a shock Tory win. It is merely to note the disparity in the varying predictions of Mr Blair's likely majority.

Britain's leading number crunchers may be hoping that the sheer scale of Labour's victory obliterates any inclination to post-mortem. Of course, by then the polling organisations may have more-or-less converged. Last week the received wisdom was that MORI tended to inflate Labour leads (by about 20 points). This week's poll shocker has been to find usually-less-favourable-to-Labour ICM's projected lead rocketing to 19.

In any event, they all agree that Mr Blair is about to make history and that, next Thursday, the British people will reward him with an unprecedented second full Labour term.

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As the bouquets rain down on 10 Downing Street - home of the Prime Minister and the First Lord of the Treasury - the man next door will also be ready to receive the plaudits of a grateful nation.

Modesty is hardly New Labour's strongest suit - and Chancellor Gordon Brown is New Labour to his fingertips.

In his expected hour of triumph, Mr Blair would not deny the chancellor his share of the glory. Few would say Mr Blair could have done it without him.

When the newly elected prime minister walked into Downing Street four years ago one thought was uppermost in his mind - winning the next election. To do that he knew his first-term government would have to lay to rest the ghost of Labour's past economic failures. Even he could not have imagined Mr Brown would do so with such style - building an economic record the Organisation for Economic Co-operation and Development describes as "enviable", and enabling New Labour to supplant the Conservatives as the party of perceived economic competence.

Despite the falling out that followed his decision to back Mr Blair against Mr Brown, Mr Peter Mandelson kicked off the campaign by saying: "There has been no 1976 IMF crisis, no 1966-67 devaluation crisis, no 1947 convertibility crisis, let alone the collapse of 1931. The stigma of mid-term breakdown that dogged Labour throughout its history has finally been banished."

There is sustained growth, unemployment (albeit by a controversial claimant count) is at a 25-year low, inflation is the lowest in Europe and there are one million extra jobs. The minimum wage, Labour's 100year dream is finally fulfilled. Adding the unemployment rate to the rate of inflation provides the economists with what they call the "misery index". When Labour was last in power in the mid-1970s and inflation raged at more than 20 per cent, the index registered more than 30 points. By Mr Brown's last budget statement, it stood at just 5.3 points, prompting one newspaper to suggest it be renamed the happiness index.

The Tories might rightly rail that Mr Brown inherited a stable economic climate but he has done nothing to endanger it. Indeed the "prudent for a purpose" chancellor infuriated many on his own side by sticking for the first two years to Tory spending limits, which the former Tory chancellor, Mr Kenneth Clarke, subsequently admitted he would not have kept to had John Major been returned in 1997.

Chancellor Brown may simply have been taking Mr Clarke's previous policy to its logical conclusion but his decision to grant the Bank of England independence in setting interest rates was absolutely central to New Labour's bid to assume the Tory mantle for economic competence.

By stealing the Tories' clothes on economics - supply-side reforms, monetary stability and low inflation - he left Shadow Chancellor Michael Portillo the near-impossible task of framing a credible alternative.

Indeed, the remarkable convergence between the two main protagonists on economic policy is such that this election sees the Conservatives pledging to match Labour pound-for-pound in spending on health and education, while limiting themselves to the promise of a mere £8 billion sterling (€9.3 billion) in tax cuts.

The Conservatives might validly accuse Mr Brown of increased taxation by "stealth". From the left comes the complaint that the first-term Blair government has actually spent proportionately less than the Conservatives on public services.

Mr Brown has determined to change the rules by which a Labour government governs. His "golden rule" allows government to borrow only to invest. His "sustainable investment rule" promises to hold public sector net debt as a proportion of GDP at a "sustainable and prudent" level - taken to mean below 40 per cent. And he has tightened his grip on the whole of government by making cash for individual departments conditional on performance targets.

"Nothing for nothing" might summarise the Scots Presbyterian whose new deal reflects fervent belief in work as the way out of poverty. And if he has proved himself gently as a redistributionist - the augmented incomes of poor families with children, money for pensioners targeted first at those in greatest need - Middle Britain has not yet taken fright.

The rage of some pro-Tory commentators, indeed, is that the wealthiest of Britain's middle classes seem determined to vote Labour with their gold cards. Others, the "rich-poor" - reasonably high earners, paying the top tax rate, but with their resources stretched, not least because the often-appalling state sector drives them to privately educate their children - are holding their breath.

For Mr Brown and New Labour the economic moment of truth is yet to come. ProLabour commentators readily concede that the achievements of which Chancellor Brown boasts mirror, to a considerable extent, what has been happening in the euro zone and in the United States.

Britain has benefited from sustained economic growth since about a year after its humiliating exit from the Exchange Rate Mechanism. But it is anything but spectacular, compared, say, to that of the Republic in recent years.

If New Labour suffered in its first term from what Liberal Democrat leader Mr Charles Kennedy has scorned a poverty of ambition, it contemplates a second term rich in ambition. Much-vaunted 10-year plans promise a Britain of golden growth, crime-free streets and world-class public services.

Yet, during this campaign, Chancellor Brown has not convincingly answered charges of a £5 billion "black hole" in his spending plans. The respected Institute for Fiscal Studies says Mr Brown has cover for the planned boost in spending on schools, hospitals and transport until the year 2003-04. Thereafter, it warns, if he wants to sustain spending or "investment" at the same rate (higher than projected growth) he would have to raise the basic rate of tax by the equivalent of 2p or push the public finances deeper into the red.

Nor - despite his dismissal of Mr Portillo's suggestion of a threatened combined tax rate of 50 per cent as a Tory lie - has Mr Brown actually said he would not raise the ceiling on employees national insurance contributions, which the punters know well is a tax in everything but name.

Come downturn or moment of truth, then, Mr Brown may have to choose - between continued "investment" in the public services or Mr Blair's no-taxrise contract with Middle Britain.

For the moment, however - assuming the polls are correct - Middle Britain appears as unconcerned about these questions as about the other that promises to dominate the life of a second Blair government: the euro.

Mr Blair clearly wants to join. Will Mr Brown let him? Will they take on the Sun and risk a third term? Or will Gordon let Tony have his way in the expectation that he, not Tony, will lead Labour's quest for it?

Mr Blair constantly exhorts the media to disregard the "froth" and concentrate on "the big picture". Whether he likes it or not, the media has already decided his relationship with Mr Brown will be the big picture story of a second term.