One of the oddest and yet potentially most significant stories that have appeared in The Journal over recent months was the revelation that Michael Howard has written off the North-East. In an interview last month, the Tory leader told this newspaper with disarming frankness that his party could win an election without the help of the region. The suggestion that the Tories would not be targeting any North-East seats was, to say the least, surprising from a leader who, at the launch of his leadership campaign last year, pledged there would be no "no go areas" for his party. Mr Howard's analysis was also plain wrong, given that if he is ever to become Prime Minister, safe Labour seats like Tynemouth need to be turned back into the Tory marginals they once were. An opinion poll published in a national newspaper this week, putting the Tories on 30pc to Labour's 38pc, suggests that goal remains as far beyond Mr Howard's reach as ever. The received wisdom - admittedly a rather fast-moving commodity in politics - still holds that Labour is on course for a third successive win, albeit by a smaller margin than last time round. But while not dissenting from that general view, I have to say there is a lot in the Tories' recent statements that has impressed me, particularly on the subject of tax. While the forthcoming ban on fox-hunting doubtless hands the Conservatives a massive political opportunity, so too does Labour's failure to operate a fair taxation system over the past seven years. During that period, Chancellor Gordon Brown has redistributed enormous sums of money from the general taxpayer to the most badly-off via his complex system of tax credits. Now that is all well and good, in my view - but where the Chancellor has gone wrong is in failing to ensure there is corresponding fairness at the middle-to-upper end of the income scale. As incomes increase, more and more people in Britain are starting to pay top rates of income tax, inheritance tax and stamp duty that originally applied only to the super-rich. And far from adjusting the tax system to reflect these changed circumstances, Mr Brown has continued enthusiastically to hoover-up what now amounts to a multi-billion pound annual windfall. The top rate of income tax, levied at 40p in the pound as opposed to the 22p standard rate, now kicks in at around £36,000 a year. When I started out in journalism nearly two decades ago, anyone earning that kind of money would have found themselves bracketed among the ranks of the fat cats. But times change, and nowadays that is the kind of salary paid not to captains of industry but to senior teachers, police officers and health professionals. And increasingly, millions of middle-income earners are starting to question the fairness of a system that makes no differentiation between them and the likes of David Beckham. There is now, in my view, an unanswerable case for widening the 22p tax band to include incomes of up to £40,000 - along the lines recently suggested by Shadow Chancellor Oliver Letwin. If it was down to me, of course, I would pay for it with a new 50p top rate on earnings of £100,000 or more, rather than from spending cutbacks. But while it would be too much to expect the Tories to adopt that kind of taxation policy, they have at least taken a step in the right direction. And with the Lib Dems committed to going the whole hog with a 50p top rate, it puts Labour in the position of having the least progressive taxation policy of the three major parties. That, to say the least, is an odd position for a party that claims to represent "the many not the few" to find itself in. Yet any attempt even to start a debate within the Labour Party over tax is seemingly doomed to failure. A couple of years back, Leader of the Commons Peter Hain gently suggested that the party might look at increasing the 40p top-rate threshold along the lines Mr Letwin has now suggested. The idea was swiftly crushed in a joint pincer-movement from Numbers 10 and 11 Downing Street, the ruthlessness of which only served to emphasise the extreme sensitivity of the issue. For Mr Blair and Mr Brown, it seems that any deviation from the tax policies which have won them the last two elections will amount to the end of New Labour. But if the concept of New Labour means anything, it surely means that when circumstances change, policies have to change too. As Neil Kinnock might have put it, Labour's tax policies are starting to look like they are in danger of being pickled into a rigid dogma as out of touch and irrelevant to the real needs as those of the 1980s. And notwithstanding Mr Howard's pessimism about the region, bringing some kind of fairness back to the system is exactly the kind of policy needed to bring seats like Tynemouth back into the Tory fold. It is of course no accident that ever since Mr Blair became Labour leader in 1994, the Tories have languished on or around 30pc in the opinion polls. New Labour's systematic theft of the Tories' political clothes has left many voters justifiably asking the question: "What are the Conservatives for?" While they may not yet be knocking on the door of Number 10, the Tories are at least beginning to look capable of engaging in a genuine debate about the future direction of the country. And it could just be that on the question of fair taxes, they have finally found an issue on which they can strike a chord with the voters. | 
