Hain demands to raise tax for rich

Maverick minister Peter Hain today courted fury by repeating his calls for higher tax on the rich - overshadowing a keynote speech by Tony Blair.

Commons leader Mr Hain said Labour should stop worrying about the middle classes and make a virtue of "redistribution".

Mr Hain, seen as a standard-bearer of the centre-Left and a future leadership contender, said Labour needed to show greater commitment to moving wealth from rich to poor.

"We've got to be much clearer that we really are committed to social justice, we really are committed to redistribution of wealth and income, that we really are trying to narrow the gap between those at the top and those at the bottom," he told BBC2's Newsnight.

His intervention appeared to be a deliberate echo - albeit in slightly coded form - of his demand last month for a rise in income tax for the wealthy. That saw him angrily rebuked by Mr Blair and forced to retract his words within hours.

In a provocative move, Mr Hain chose to go back on the offensive only hours before the Prime Minister was due to make a major speech in front of world leaders setting out New Labour's themes for the next general election.

Mr Blair was due to recommit his Government to moderate policies in his address to the international Third Way summit, whose members include former US president Bill Clinton, Germany's Gerhard Schrder and Jean Chré´©en of Canada.

Mr Hain partly balanced his remarks by saying redistribution should be achieved in a way "that doesn't create the kind of old Labour agenda that's economically unsuccessful and ran Labour out of power".

But he went on to question the Prime Minister's central political strategy, the wooing of the middle classes previously loyal to the Conservatives.

"We can be less worried about alienating, if you like, middle Britain because middle Britain understands and has confidence in our agenda," he said.

Mr Blair was coldly furious at Mr Hain's last outburst, a naked demand for tax rises for the rich. The Prime Minister interrupted talks at an EU summit to call Mr Hain and make a public statement saying: "We are not going to be raising the top rate of tax."

In his keynote speech today to 500 politicians, academics and observers from around the world, Mr Blair was expected to claim that a third term in government for Labour would cement Britain as a "lasting social democracy".

He was also set to promise Labour supporters that the next manifesto would be written in more emotive language to revive their enthusiasm.

"We cannot let the experience of office separate us from the experience of ordinary people," he was expected to say.

But he was making clear that did not mean reverting to the ways of the old Left, saying: "Any centre-Left party that sees its future in anti-globalisation or being anti-US is making a big error. The challenge for us is to shape globalisation to the values of the centre-Left."

At a three-hour political Cabinet yesterday, Mr Blair told ministers that the Government must step up the pace of public service reforms or risk being outflanked by the Tories.