The very first budget of a Labour Chancellor of the Exchequer, that of Phllip Snowden in 1924, captures how differences in political approach and instincts between New and Old Labour can often be vastly exaggerated. There is a very good essay on Snowden in Roy Jenkins' book of essays on 'The Chancellors'.
Snowden had a good financial position, so the budget was able to cut indirect taxes. As Jenkins writes, "the changes were very deliberately slung against regression", with reductions on duties on sugar, tea, coffee, cocoa and dried fruits allowing Snowden to announce his were "the greatest step ever taken towards the realisation of the cherished Radical ideal of a free breakfast-table". He halved the returns from the entertainments duty, concentrating heavily on the cheaper seats, with abolition up to sixpence, heavy reductions up to 1s 3d and no reduction. Direct taxation was left largely untouched.
The detail of the budget was highly palatable to Labour and radical listeners. The psychological relief to the prosperous and the even more wealthy was even greater. ... What it did benefitted the 'have nots'. What it did not do relieved the 'haves'. Many of them had worked themselves up into expecting the first socialist budget to mean the end of civilised life, or at any rate of aristocratic and high bourgeious life, and when it did not they could scarce forbear to cheer. Snowden's claim that 'the budget is vindictive against no class and no interest' was well founded. He followed this with a high statement of fiscal principle which ... had a ring more of Gladstone than of Dalton or Cripps about it: "Though I have always held and declared that the State has the right to call upon the whole of the available resources of its citizens in case of national need, I have equally held and declared that the State has no right to tax anyone, unless it can show that the taxation is likely to be used more beneficially and more economically".
Jenkins notes the fluttering of order papers came from the Labour and Liberal benches, with Asquith endorsing the budget as "proceeding on a throughly sound financial basis", and that the sighs of relief from Lombard Street were audible at Westminster.
Even Beatrice Webb, a Snowden critic, wrote in her diary that "Philip has had a great triumph ... we were wrong about him ... he has turned out to be the best available Chancellor".
That was 1924. Jenkins notes too that the 1924 budget was an "untramelled internal Treasury production".
Later in the 1929-31 Labour minority government, Snowden's clinging to Treasury orthodoxy, against the radical proposals of Lloyd George and the emerging Keynesian agenda, did not end well.