Tory surge cuts Labour's lead to five points

Labour's lead has more than halved in the past month and voters prefer the Tories' plan for tax cuts, according to a new survey for The Independent which will fuel fears among Labour MPs that the party's campaign ahead of the general election is faltering.

The NOP poll casts doubt on whether Gordon Brown will be able to regain the political initiative for Labour in his Budget tomorrow by highlighting the choice between higher spending under Labour and Conservative cuts in public services.

NOP last month gave Labour a lead of 12 percentage points over the Tories. That has now shrunk to just five points, with Labour on 39 per cent, the Tories on 34 per cent and the Liberal Democrats on 19 per cent. The slide in support will worry Labour, which has seen the Tories set the pre-election agenda on issues such as immigration, council tax and health.

Some Labour MPs have criticised the campaign run by Alan Milburn, who was appointed as the party's election co-ordinator last September, and have called for the Chancellor, who headed Labour's effort at the past two elections, to take a more prominent role. Mr Brown is expected to do so after delivering the Budget - his ninth - in which he will make Labour's proposal to spend £35bn a year more than the Tories by 2011-12 a dividing line between the two main parties.

But the poll suggests that Labour's plan to make the economy the main election battleground is not guaranteed to succeed. Some 41 per cent of people support the Tory plan to protect health and education but reduce spending on some other public services to create room for tax cuts, while 35 per cent back Labour's plan to increase spending on all services without cutting tax.

Even Labour supporters are attracted by the Tory approach, with 40 per cent backing some tax cuts and 39 per cent wanting higher spending on all services. The AB professional class prefers higher public spending, while other social groups want lower taxes.

The figures, if repeated at the election, would still give Tony Blair another Commons majority of more than a hundred. But the survey will encourage the Tories in their belief that voters are reaching a "tipping point" on tax after what they call the "66 tax rises" since Labour came to power in 1997. At the election, expected on 5 May, the Tories will couple their pledge to cut taxes by £4bn with warnings that Labour would raise taxes in a third administration to fill a "black hole" in the Government's finances estimated at £10bn by the independent Institute for Fiscal Studies.

Senior Tories admit the party still has to persuade voters that it could deliver the best of both worlds by reducing taxes while protecting public services. But the poll will give them grounds for hope that their approach is potentially popular.

The survey suggests, however, that the Tories will struggle to convince people that they have the right policy on health. By a margin of four to one, voters prefer Labour's strategy. Some 68 per cent support all of the health budget being spent on ensuring NHS treatment is free, while only 16 per cent back the Tory plan for the Government to meet half the cost when people opt for private treatment. Even Tory supporters reject the party's proposal by a margin of two to one.

Mr Blair suffered another setback last night when Mr Brown cast doubt on his vision of Britain acting as the "bridge" between Europe and the United States. Setting out his credo on BBC TV's Newsnight programme, the Chancellor said Britain stood "for more than simply bringing people together. We have values of our own."

Labour officials insisted there was no "wobble" over the party's campaign and that it was "on track". They pointed out that NOP's findings were broadly in line with the average of all the opinion polls, giving Labour a lead of about six points.

Mr Milburn accused the Tories of trying to hide their proposal to cut public spending by £35bn. He said: "It is a plan that would have devastating consequences for public services. The Tories are offering Britain's public services a terrible deal. They will cut the money and leave the professionals with a much smaller budget. The result: cuts in services across the board."

NOP interviewed by phone 954 adults aged over 18 between 11 and 13 March. Data have been weighted to the known population profile by age, gender, social class, region and past vote. Voting intentions have been further weighted by reported propensity to vote. NOP is a member of the British Polling Council and abides by its rules.