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Brown’s weakness is his strength

Wednesday, 23rd April 2008

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

In its report on the Budget of 18 April 2007, the Treasury Select Committee recorded the calculation of the Institute for Fiscal Studies that 5.3 million families would lose out. The committee also expressed concern about ‘the low take-up rate of Working Tax Credit’ among those who would be hit by the Budget.

Given that all this was known by Labour MPs last year, why did it take till now for the issue to become so fissile? Partly because voters are feeling the pinch much more sharply than they were a year ago, as the cost of living has soared, the value of houses declined and mortgages become more expensive (for those who can secure one). Earlier this month, the same Commons select committee reported with greater urgency that ‘the group of main losers from the abolition of the 10 pence rate of income tax seem an unreasonable target for raising additional tax revenues’. It has dawned on Labour MPs that their core voters will not understand — and will punish — a governing party that is bailing out banks while fleecing the least well off. Backbenchers fret that the Brown government now seems committed to squeezing the poor until the pips squeak.

That the PM should find himself in this particular dilemma is also revealing. Last year, as Chancellor, his objective was all too obviously to be seen as the smartest guy in the room. Even in recent interviews, he has been boasting that he managed, in his final Budget, to achieve what the Tories always wanted to do but never could: to cut the basic rate of tax to 20p. In fact — as far as the least well-off were concerned — he was simply doubling the starting rate of tax. In 1999, when he introduced the 10p rate, he said it would ‘encourage work and make work pay’. What had changed by 2007 — other than the growing intensity of his desire to trump the Tories as tax-cutters on the eve of his move to No. 10?

Worse, the PM refused for much too long to admit to MPs the obvious: that there were indeed losers as a result of this change. Only at a hastily arranged meeting of the Parliamentary Labour Party this week did Mr Brown finally concede that he ‘got it’. He and Mr Darling cobbled together a compensation package for the low-paid which managed to head off the backbench rebellion.

Yet this was scarcely a success. They prevailed by deploying the emotional blackmail so beloved of John Major: namely that the government might fall if it was defeated in the Commons. But an administration whose only strength is its weakness — back me or destroy me — is doomed. As David Cameron said in an excellent performance at Prime Minister’s Questions, the PM has suffered ‘a massive loss of authority’. Whatever happens in Thursday’s elections, Mr Brown is already close to the point of no return.

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Glasgow East symbolises — as few other places in Britain can — the fact that the problem Labour faces is not just lack of leadership but lack of mission. What is to be seen in this constituency encapsulates and dramatises Labour’s abject failures to comprehend, let alone tackle, the nature of the poverty which grips our council estates.
For all the latest on the Glasgow East by-election, visit Coffee House