BRITAIN:Tony Blair and Gordon Brown hit the campaign trail in Glasgow yesterday in a joint effort to avert Labour humiliation at the hands of the Scottish National Party (SNP) in the Scottish parliamentary elections on May 3rd.
However the departing prime minister and his would-be successor found their launch overshadowed by the escalating row over the chancellor's controversial 1997 decision to cut tax relief on dividends paid to pensions, now being described as a "£5 billion-a-year tax raid" on pension funds.
The row follows the disclosure of Treasury advice given to Mr Brown about the potentially disastrous consequences the cut would have for pensioners, after a two-year freedom of information battle fought by the London Times.
Mr Blair said yesterday that the election of the SNP would mean "uncertainty, risk and instability" for Scotland "from day one".
While Mr Brown predicted support for the SNP would "evaporate", his anxiety was that the pensions issue - and the subsequent damage to his relationship with business leaders - could fuel increasingly desperate attempts by leading Blairites to prevent his "coronation" as leader when Mr Blair steps down later this month or early next.
Senior politicians involved in negotiating last week's DUP/ Sinn Féin agreement for the restoration of powersharing at Stormont have said they came under pressure to ensure the start of devolution "before May 10th".
Thus May 10th - just two days after the Stormont executive goes live - is now added to the speculative list of dates on which Mr Blair could trigger the leadership contest.
The SNP sought to exploit Labour's leadership disarray yesterday, welcoming Mr Blair to the campaign trail on the grounds that he is now "a major electoral liability".
At the same time, the Liberal Democrats set out their plans to repeat their success in the Dunfermline byelection in Mr Brown's back yard, while Mr Brown - facing repeated polling evidence that he is less popular than Mr Blair - was forced to defend the 1997 decision to scrap dividend tax relief on pensions.
"I believe it was the right decision to make," the chancellor told a press conference designed to launch Labour's economic broadside against the SNP and Scottish independence.
Mr Brown said he had been able to look at the relevant papers over the past few days and to reflect on the issues surrounding the most controversial decision of his 10-year reign at the Treasury.
Proclaiming Labour's "strength of mind" to take long-term decisions, "no matter how inconvenient or difficult", he said: "That [ 1997] decision was to end bias against investment in the economy; it was a decision in favour of long-term investment in the future."
Mr Blair backed Mr Brown. "It was the right decision then and it's the right decision now. It was important to remove the distortion of the tax credit on dividends and to boost investment."
The prime minister said every major country faced pensions problems and the words "over the top" could not adequately describe suggestions "that all of this can be laid at the door of the chancellor's decision in 1997".
However, Derek Scott, a former economic adviser to Mr Blair, was reported yesterday as saying that Mr Blair had had doubts about the decision to scrap dividend tax credits, but "did not want to go against Gordon".
Ed Balls, the Treasury minister and a close ally of Mr Brown, had to retract a claim he made on Saturday that the Confederation of British Industry had supported the decision to cut the tax relief.
The Timesreported yesterday that the tax rise had so far cost Britons £60 billion (€89 billion), or £3,000 each. .