His biggest error, and a worrying sense of fatalism

Published on Friday 27 June 2008 22:04

JUST when Gordon Brown thought he had put the 10p tax debacle behind him, it returns to haunt him, coinciding with his first anniversary as Labour leader.

The crusader against child poverty is now threatened with a fresh revolt over the long-term impact of cutting the 10p tax rate. Attempts to moderate the impact are not enough, declared a committee stuffed with MPs from his own ranks.

A few rebel amendments have also been tabled to next week's Finance Bill that would further water down the impact on the poor from ending the 10p tax.

A damning indictment of the policy is illustrated by a survey of 5,000 voters by PoliticsHome. Despite media obsession with the Prime Minister's indecision over whether or not to hold an election, it was the abolition of the 10p tax rate which was seen as his biggest mistake by the public.

At the Crewe and Nantwich by-election last month, mystified Labour campaigners complained that every voter seemed convinced they had been hammered by the removal of the lower tax band, even if they were high earners.

For someone who has pitched himself as the saviour of the economy, it is unfortunate for Mr Brown that the electorate is gripped by a poverty mentality, no doubt triggered by rising fuel and food prices.

An Ipsos Mori poll on the day of his first anniversary as Prime Minister shows the deepest economic gloom since 1980. Seven in ten people now believe the country's economic condition will get worse over the next 12 months.

Food and fuel prices are largely factors outside Mr Brown's control, and it is dangerous to pretend he can protect the public from them.

But the Treasury committee report into the 10p tax row and other Budget measures shows he has failed to pull the levers that are available to him to mitigate the impact of a stagnating economy.

Meanwhile, in Henley, Mr Brown got more bad news as Labour was beaten into fifth place by the BNP.

The party never had a chance in the prosperous Thames-side town, but allowing itself to be so humiliated shows a lack of will. In 2005, 14.8 per cent of voters in Henley backed Labour. But this year that had dropped by 3.1 per cent, displaying a worrying sense of fatalism.

It is not just brickbats for Labour: the poll was also a blow for the Liberal Democrats' by-election machine. There was an 0.8 per cent swing from the Lib Dems to the Tories, showing the Conservatives' popularity is on the rise and more resistant to the "anything but the main parties" vote.

However, there was some good news for the PM – a survey for the BBC's Daily Politics show of constituency chairmen and women found 106 of the 135 respondents backed him as the "right person to lead Labour to victory" in the next general election.

Mr Brown is correct in one sense – by-elections do come and go. But so do unpopular governments which fail to set out a clear vision.