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Brown’s weakness is his strength

Wednesday, 23rd April 2008

The Spectator on Brown's 10p tax U-turn

Gordon Brown’s dramatic and humiliating climbdown on the abolition of the 10p tax rate averted at least one disaster: the Prime Minister was facing a knife-edge Commons vote next Monday over Frank Field’s amendment of the Finance Bill, and one that might have spelt oblivion if the government had lost. With a panicked series of compensatory measures, and a desperate plea for mercy from his parliamentary party, Mr Brown was able to see off this particular mutiny. But there is still plenty for him to worry about.

Next Thursday, the PM faces another vote of confidence in the elections to 135 English local authorities, all Welsh councils, and the London assembly — not to mention the gripping contest between Ken Livingstone and Boris Johnson. Mr Brown’s aides are desperate that these elections, and especially the mayoral battle, should not be seen as a referendum on the government’s national performance. Too bad: all such elections are invariably and inevitably interpreted as national opinion polls.

We deal elsewhere in this issue with Mr Johnson, for whom our support has always been and remains unequivocal: he ought to become London’s Mayor next Thursday. Even though the 10p tax rebellion has been averted, the saga of this particular mutiny has dramatised much that is wrong with the Brown regime. It is instructive, in particular, to go back to the Budget of March 2007 when the abolition of the 10p tax rate was first announced by Chancellor Brown.

As we pointed out at the time: ‘He did only one thing that no one was expecting — cutting basic-rate income tax by two pence — but he instantly took the benefit away again by abolishing the 10p tax band and other changes: in its totality, this was actually a tax-raising budget.’ In the Commons, the con was first spotted by Sir Menzies Campbell: ‘One could say that we will be asking the poor to subsidise the rich.’

Just so. A handful of Labour MPs also had the candour to admit what was happening. ‘Yes, there are people who will lose because of the abolition of the 10p rate,’ conceded Rob Marris, the member for Wolverhampton South West. Geoffrey Robinson, normally a loyal Brownite, said that he had a ‘bone to pick with the Chancellor and the Treasury Front Bench about the removal of the 10 per cent basic rate... It is hurting many people whom the government never set out in any of their policies to hurt.’

On 27 March 2007, Tony Lloyd, Labour MP for Manchester Central, asked the then Chief Secretary, Stephen Timms: ‘Does the Chief Secretary realise that... [it is] frightening for those on low household incomes to be told that they will lose money because of tax changes? Can he confirm that, in constituencies such as mine, which have many poor families, no household will lose out because of the Budget?’ To which Mr Timms had the honesty to reply: ‘I cannot say that.’

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