FAMILIAR stereotypes are being trampled underfoot in the debate about

which is the ''low-tax'' party. The Conservatives conspicuously failed

to live up to the expectations aroused by their election campaign, but

the notion dies hard that they are, at least in relative terms, the

low-tax party. Not everyone would have instantly challenged Mr Major's

claim that the rate under Tory Governments is consistently lower than

the level when Labour is in office. The Treasury, however, has shown

this assumption to be quite wrong: the then Mr Healey was a lower-tax

Chancellor than all but one of his successors, albeit only during the

period preceding the 1979 General Election. The Treasury figures provide

an interesting corrective to received notions, but the argument will

become sterile if it is confined to the level of taxation rather than

its spread and if it takes no account of economic circumstances or the

demands on the public purse.

There is no ''low-tax'' party: nor would this necessarily be something

to boast about if there were. Mr Clarke is right to insist that he has

to impose whatever tax is necessary ''to get us more jobs and more

growth'', provided that is actually what the Government is doing --

which is questionable, given the absence of a convincing strategy for

capital spending. A realistic level of taxation has also to be set if

services and social welfare are to be kept at the level that the public

clearly wants. A slanging match about percentages is therefore of

limited value. The main question about the tax burden that will be felt

from April onwards is not whether it is heavier or lighter than the

Healey imposts but whether it is heavier than the economy can bear. Mr

Beith claimed yesterday that the increases are too big a gamble for the

fragile recovery, but he implied that was at least in part because they

were not being used to fund productive investment.

We would agree with that last point, but the tax level does not in

itself seem excessive in relation to the country's needs and the urgency

of reducing the budget deficit. The real question is about the way the

taxes are being raised, and in particular whether the balance of direct

and indirect tax is fair. It is here that the Government's fiscal

policies are most open to question, their preference being for indirect

taxation, with VAT on fuel providing an exceptionally unpleasant example

despite the compensation package.

Once again the stereotypes are suspect since it appears that even when

it comes to direct taxation voters will from April be paying more than

they did under Labour in 1979; but the thrust is regressive -- a freeze

on the level of the personal allowance rather than an increase in the

higher rate. It is on this point that political debate should be

engaged, and it is a pity that Labour does not yet feel on firm enough

fiscal ground to do so, preferring the easier course of puncturing the

Conservatives' low-tax pretensions -- a legitimate target, of course,

but a limited one, and perhaps a receding one in view of the expected

pre-election cuts.