The Blair government will unveil its fourth Queen's Speech this morning, with the battle against crime at the heart of what will promise to be a full legislative programme.
But with belief hardening that the general election will not be delayed beyond next May, Labour and the Conservatives were locked in battle last night on the key electoral battleground of taxation.
Mr Peter Mandelson questioned the Conservative commitment to "tolerance" and claimed the former prime minister, Baroness Thatcher, had "damaged the ethos of society" through intolerance which gave rise to a "macho" culture of yobbishness, rudeness, workplace bullying and road rage.
Defending the liberalising laws of the 1960s, Mr Mandelson told Labour Friends of Israel that British society still suffered "an uncomfortable undertow of racial hatred and xenophobia" and that it was time for Labour to reassert tolerance as one of its fundamental virtues.
He said the motive of those reforms - outlawing racial discrimination, legalising homosexuality, abolishing the death penalty, and making divorce and abortion easier - was "respect for human dignity, combined with a fundamental belief in the virtue of tolerance . . . to enable every person to live their own life in their own way provided they don't trespass on the rights of others."
Mr Mandelson added: "For too long in Britain attempts have been made to run down the virtue of tolerance to the point where some present it almost as a vice . . . By the 1980s, to be liberal was to be seen as weak, to be tolerant was seen as wet. Margaret Thatcher trumpeted her intolerance."
Mr William Hague and Mr Michael Portillo were standing on solid Thatcherite ground, meanwhile, arguing the "moral case" for lower taxes. The shadow chancellor said he expected to announce £8 billion in tax cuts, while the Chancellor, Mr Gordon Brown, said the Tory plans would mean "deep cuts" in public services.