Battle over the economy

Gordon Brown put the economy at the heart of Labour's election campaign in a bid to persuade disillusioned supporters to turn out at the polls.

The Chancellor was set to outline his plans at the last meeting of the Cabinet before Tony Blair calls the 5 May election next week. The Government's hopes of making personal prosperity a central plank of its pitch to voters suffered a huge blow after figures showed take-home pay had fallen for the first time in a decade.

Mr Brown was expected to go on the offensive despite a study by the Institute for Fiscal Studies revealing tax rises in the 2002 Budget had hit average families hard. The research showed that household income had dropped by 0.2 per cent by 2003/4, the first such fall since the early Nineties.

Party strategists believe that the main challenge of the campaign will be to boost turnout, particularly of Labour supporters who are inclined to stay at home. Only by motivating traditional supporters can the party win another large majority, ministers will be told.

Mr Blair was expected to rally the Cabinet with a call to expose the "clear choice" between Labour investment and Tory cuts. Internal party polling will be shown to ministers revealing the public trusts Labour far more on the economy in the wake of this month's Budget.

Mr Brown will declare that "an opportunity economy" will be the party's campaign slogan as he spends the next 10 days hammering home low mortgage rates, low inflation and record employment.

Record investment in public services and free bus travel and council tax help for pensioners will be used to persuade sceptical supporters to turn out. Mr Brown's return to the fray was agreed at a key meeting with Mr Blair and Deputy Prime Minister John Prescott yesterday.

Ahead of the Cabinet meeting, the Chancellor was staging a publicity blitz in key London marginals today to highlight Labour's plans to invest in skills and families with children.

In his first entry to the campaign in the capital, Mr Brown visited a SureStart centre in Croydon and a training centre at Charlton FC. Mr Brown's comeback will be sealed when he unveils a Labour poster tomorrow and attends the launch of a new housing policy alongside Mr Prescott. One aide said Labour's message will be targeted at those who identify with Labour but are not certain to vote. A minister said: "If this group votes Labour we will secure a third large majority. If they do not, the result will be a lottery."

Mr Brown will highlight the Conservatives' spending plans, with his key message set to be "don't let the Tories put your mortgage/job/school/hospital at risk". The Chancellor will not displace Alan Milburn as campaign coordinator or have a day-to-day role at party HQ, but his return to the frontline will boost backbench MPs worried about his absence to date.

Mr Blair was expected to tell the Cabinet: "We can take confidence from the strength and stability of the economy, which will be the bedrock for Labour's election campaign."

But he will also warn colleagues the Tories will fight an "opportunistic" campaign. Copies of the party's draft manifesto reveal Labour will pledge more reform of public services and stress commitment to tackling poverty in a third term. There will be a pledge to take another million children out of poverty and cash figures for the Child Trust Fund, to be paid to 11-year-olds.