Things can only get better, they sang in 1997. Will the economy be a Labour vote-winner in 2005?

Labour will today put its management of the economy at the heart of its election campaign, however, new figures on incomes and property prices appear to cast a shadow over the Chancellor's record. What should the electorate believe?

Labour will today put its management of the economy at the heart of its election campaign, however, new figures on incomes and property prices appear to cast a shadow over the Chancellor's record. What should the electorate believe?

ECONOMIC GROWTH

Claim: The economy has posted growth for 50 consecutive quarters. Britain has experienced the longest period of sustained economic growth since records began in 1701.

Counter claim: Almost 20 of those quarters were under the premiership of John Major. The average growth rate in the last Conservative government was 3.1 per cent, greater than the 2.7 per cent between 1997 and 2004.

Analysis: The reality is, Labour inherited a good hand in 1997. Thanks to a pre-election Budget and interest rate cuts, quarterly growth had just hit an eight-year high. But Labour did not mess things up.

INFLATION AND INTEREST RATES

Claim: From 1979 to 1997, inflation averaged 6 per cent. In the past eight years, it has been 2.4 per cent. Over the same period of Tory rule, interest rates averaged 10.4 per cent. Since 1997, interest rates have averaged 5.3 per cent.

Counter claim: It was the Conservatives who won the battle against inflation. They introduced inflation targeting that cut it from above 10 per cent to 3 per cent. Rates fell from 12 per cent to 5.25 per cent by 1995.

Analysis: While inflation and rates were both falling, Labour set that in stone. Its key decision was allowing the Bank of England to set rates. In the absence of political interference, it unwound Kenneth Clarke's pre-election cuts and raised rates to 7.5 per cent, enabling them to cut rates as inflation fell.

HOUSING

Claim: Rising house prices has helped deliver a 50 per cent increase in personal wealth. The robustness of the housing market enabled consumers to go on spending in the face of a global downturn that pushed several other economies into recession.

Counter claim: The unsustainable boom in house prices has left households with a record debt exceeding £1 trillion. High prices have left a whole generation of young people unable to get a foot on the housing ladder - unless they are from wealthy backgrounds.

Analysis: The housing market has always threatened to be the Government's Achilles' heel. Surges of 40 per cent in prices were unsustainable. So far, the slowdown has been benign - and in fact desirable. The Bank has room to cut rates if it worsens.

INCOMES

Claim: Average take-home incomes have risen by 20 per cent in real terms and are still rising. The number of pensioners in poverty has fallen by 300,000 in 2003/04. The number of children in poverty has fallen by 700,000 since 1998.

Counter claim: Average take-home incomes fell in real terms by 0.2 per cent in 2003/04, the first drop since the recession of the early 1990s. Inequality reduced slightly, but child poverty did not fall as sharply as expected.

Analysis: It is hardly surprising that incomes would fall in a year when the Government raised National Insurance contributions by £8bn. Mr Brown has been a markedly redistributive Chancellor since 1997.

TAX BURDEN

Claim: After rises in tax credits to 2007, the effective income tax rate for a family with two children earning £25,000 a year will be just 6 per cent, and at £30,000 just 10 per cent. With child benefit up from £11 in 1997 to £17 this month, every family in Britain is better off.

Counter claim: The Government's figures show tax as a share of GDP rising from less than 33 per cent under the Tories to almost 39 per cent by 2010. Labour has imposed 66 tax rises, many of them by stealth. Rises in council tax have hit the poorer families hardest.

Analysis: By definition, the tax burden has gone up as the share of wealth going to the Treasury has risen. The issue is where it has fallen. Business says a large percentage is being paid via ruses such as the aggregates levy and abolition of pension dividend credit. But for families with children, the burden has fallen.