Has Labour tied its hands with its manifesto pledge not to raise the upper or basic rates of income tax?

"I think that generally one should tie one's hands as little as possible in these areas. And I think all parties recognise that if the economy was to suddenly change direction that all bets are off. So these are promises that that assume the economy remains relatively stable. You would be a very irresponsible government if you did not respond to a massive burst of growth or much more likely a recessionary position because you had made a manifesto commitment two-and-a-half years before."

"Personally, I think there is an issue - the Conservatives have flagged it up but didn't make it concrete - about the fact that the higher tax rates are paid by people - who in the South East - would not view themselves as being rich. I would have liked to leave open the possibility of a simultaneous raising of the upper band of tax and the tax threshold. If done right, it would mean a middle class tax cut, in the short term, which is attractive because of its electoral power. But it means because of fiscal drag - the process by which as we become more affluent more of us pay higher taxes - you can have a more re-distributive tax system."

"If you went to 50/50 - it would be far too expensive in the short term - 50 per cent tax rate for people earning over £50,000, you would not be paying any more tax until you were earning around £70,000. A tax cut for everyone paying the higher rate up to £70,000 over time would make tax more redistributive as more people moved into that band as a result of rising affluence. I think it is a pity to close it off."

"I don't think Labour have any plans to do this, but if a Labour chancellor was to come along in three years time and say, 'you know we promised not to raise taxes but we've got this plan which would mean a cut for everyone but the super-rich'. Then the electorate may well say, 'Fine, formally speaking you may have broken your promise but it's a good idea'. Don't forget in 1997, Labour said it would not be spending much more money and its has spent bags more. Nobody says you have 'you have broken your promise' about spending money because they like it."

"One of things that people forget about breaking promises is you can break promises if its is popular. When you say to your kids I'm grounding you for a week and only ground them for six days, they don't say 'but mummy and daddy, you're breaking your rules'."

Into the second term what will be the taxation issues for the third term?

"Whoever it was who briefed the Financial Times, he is saying as a Tory I want the state to be 35 per cent of GDP. I want a residual state. I want middle class people to buy their own health and education. Now that's fine. It is a perfectly legitimate political position. I understand its basis. I think its quite challenging."

"It is also the case that if you look at the last Comprehensive Spending Review and then add two more CSRs end to end on that by 2010 the proportion of GDP as public spending will be 44 per cent which is about the level in Europe. About the level you need to have if public services are not to be in a perpetual level of crisis."

"Now I think British people will respond quite well to being told, 'We'll take things step by step, and try to take you with us and you can throw us out in four years if you don't like where we are going. But let's be absolutely clear there are two very different visions of Britain here'... Lets get away form the politics where everyone is trying to crowd on the same ground, the sort of yah-boo sucks, 'we could do it better than you would'."

"Whoever spoke to the FT has been silenced but I think after the election that the Conservatives and Labour will be forced to be up front about their ultimate destination."

There seems to be an emerging consensus that there is a problem with the role of political parties in the democratic process, what can be done?

"I think that a big problem is that political parties have a narrower social, economic and cultural basis but continue to exert a stranglehold over our political process. They exert control over who comes into politics - you have to join a political party to become a political representative. And also the first accountability of politicians is not to community, nor even to their values, it is the party hierarchy and the party's interest groups. So these organisations operate a cartel and a stranglehold over accountability but yet less than one per cent of the population joins them. The really interesting is if you go around the country and look at youth parliaments, youth assemblies and youth forums - and there are lots across Britain - none of them operate on party lines. Young people are just not interested in them."

"I think political parties have to do two things. They have to loosen up in terms of selection and accountability. And recognise they are there to represent a set of values rather than to organise a closed shop."

"I think we need, to use a technical phrase, more 'lateral recruitment' into parties. So it is not like you have to join and do five years on the ward to get on the GC, then two years on the GC before getting on the council before you become an MP. What is needed is to go out into the community and you say that it doesn't really matter if some one is a party member or not - what matters is that they share our values and are they good. You invite them to join the party and immediately to stand as candidate."

"I think that parties have got to distance themselves form their executives. Electoralism means that winning political power is quite a small part of political mobilisation. As long as parties believe their job is defending their executive they are incapable of entering into the sort of open-ended intelligent debate people crave."

"We have got to get away form this terrible obsession with divisions in parties. Look at the French Socialists. They publish three quasi-academic journals which are full of huge ideological debates about where French socialism should be going. But when it comes to elections they go out and organise for their leader. I think we need that kind of model."

What about Labour?

"There has to be a massive change of culture in Labour. I think if the Labour Party does not go through a painful self-examination after the election and fairly substantial changes to the way it operates then we have missed an opportunity and we are headed for a crisis."

"We are headed for the emergence of our own Berlusconi or another populist figure that says political parties represent nobody."