OPINION: Hain's PR skills questioned with failed tax speech

Labour didn't win the 1997 election because of its brilliant campaign; it won because of the decision taken by Gordon Brown a year earlier not to raise income tax.

One key person opposed the Brown economic strategy, particularly on tax, and that was none other than Peter Hain. The ex-Young Liberal openly challenged the future Chancellor when John Smith was leader, and only shut up when Blair took over because he fancied a job.

Blair and Brown both went ballistic when they learned that Hain was back to his old tricks last week, but for very different reasons. I certainly wouldn't have wanted to be within earshot of the Chancellor when he found out.

Brown spent years working out his winning strategy, and his explosion on hearing Hain's tax speech was not because he necessarily disagreed with his sentiments. The Chancellor believes that he alone decides these things, and Hain had thrown a spanner in the works. Brown could easily have been planning something similar himself, but my old boss will not have been pleased to hear Blair tell the nation that income tax will not rise. Brown never wants to be boxed in and, for any future tax rises, he will now have to look elsewhere.

Blair went mad at Hain, not just because it came on top of all his other problems, but because he believes that taxing the rich is as bad as being nice to unions.

The Prime Minister will always believe that Labour lost an election they should have won because of John Smith's tax raising shadow budget, and to go down that road again would be a PR disaster.

In the PR war, moulding people's expectations is crucial. Brown never seriously wanted to raise the top rate of tax, but I was encouraged to make people believe that he did. The Shadow Chancellor - as he was then known - knew that the more the media thought he was in favour of a new top rate, the bigger and better the story when he announced he was against it. The added bonus for Brown was that Blair was so desperate not to raise tax that, in return for Brown agreeing with the future PM not to raise the top rate, Blair agreed that this would be Labour's only tax promise.

This was a far bigger prize for Brown as it gave him more tax options.

He knew that, if public services were to improve, taxes would have to rise. If Blair had got his way, Labour would have ruled out National Insurance rises too, and there would be no extra money for health and education now.

For Brown the PR strategy is very important, and his understanding of this meant that when he raised taxes in his last budget to pay for public services the approval ratings were high. He would never just come out with a Hain-like statement unless he had spent years first preparing the ground, as he did with raising National Insurance. If Brown planned to raise the top tax rate he would have sold it as a cut in tax for the middle classes, including nurses and policemen, not 'soaking the rich'.

Hain came unstuck partly because of the cackhanded way he approached briefing his speech. It was obvious that an intelligent and experienced tabloid hack such as Oonagh Blackman of the Daily Mirror would spin the spin she was given by Hain's bag man into a 'soak the rich' line.

Hain, who only made the tax speech to position himself on the left in preparation for a leadership bid, has lost none of his talent for making headlines, learnt from his days in the Young Liberals. However, he has lost all his PR skills, and this one humiliating day has certainly cost him any chance of leading the Labour Party.

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