THE INCREASING stress on the cash crisis Labour is said to have inherited may be part of a softening-up process for a tough Budget next month.

But, if people are being expected to face grim realities in the form of tax increases of some sort, so too, it seems, is the government.

For the tide of popularity on which it was elected was bound to fade anyway as the everyday business of government and the situations confronting the new administration eclipse the new dawn's sunshine.

But whether or not there is a softening-up spin in the charge that former Chancellor Kenneth Clarke "cooked the books" and left the new government with a huge financial "black hole", Labour was, in any case, always heading for the crunch that is now coming on spending - and for an accompanying erosion of its popularity.

For it placed itself in a tramline towards that situation when, anxious to convince voters that the party's "tax and spend" ideology of old had truly been ditched, it pledged not to increase the top or basic rates of income tax and, for two years, not to exceed Tory departmental spending plans.

It is one thing for the government to be shocked by the mess it has inherited, now it has got its hands on the books, but for it to be surprised is quite another matter.

The first reaction, surely, is for the public's benefit - an "It's not our fault" excuse for the Budget sting to come, even if income tax rates are left alone.

But certainly there can be no great surprise about the damaging shortfalls facing the government.

The evidence that schools and hospitals, for instance, are in real financial trouble has been plain for long enough.

Labour is now casting about for ways to fill black holes without breaking its tax or spending pledges.

Ministers are now considering, for instance, the privatisation of the London Underground and possibly ditching the Millennium Exhibition.

So the toss-up between letting the schools and hospital crises mount and sticking to the financial rules it has set, while introducing some tax increases next month anyway, is not a formula for popularity.

After the honeymoon, the real world.

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