Andrew Grice: The PM has only himself to blame for Budget mess

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The Independent Online

The writing was on the wall three weeks ago, but Gordon Brown refused to read it. A string of Labour MPs challenged him over his decision to abolish the 10p rate of income tax when he addressed their weekly meeting.

An irritated Prime Minister dismissed their concerns, insisting that people on low incomes would not lose out because they would be compensated through his flagship tax credit scheme. There was a loud rumble of discontent at that point. The rumblers knew otherwise after receiving complaints from their constituents.

Mr Brown was sure the number of losers from his tax shake-up was less than the 5.3 million estimated by the independent Institute for Fiscal Studies. But because people's individual circumstances vary, the Treasury could not come up with an accurate figure.

A two-week Commons recess might have taken the steam out of the growing Labour rebellion. In fact, it had the opposite effect. Many Labour members campaigned for next week's local elections and found the 10p decision was inflicting huge damage on the party.

Mr Brown, on a visit to America last week, had to fend off questions about the turmoil at home. He dismissed the row as a media frenzy, a short-term blip while he focused on the big long-term issues. But he had to interrupt his White House visit to talk a ministerial aide, Angela Smith, out of resigning.

On Monday, Mr Brown had finally grasped the scale of the problem. He adopted a conciliatory tone when he addressed his MPs again, reassuring them that he "got it". But his appeal for unity failed to quell the rebellion, forcing yesterday's spectacular climbdown.

Brown allies hope that what voters will remember is the final decision to compensate most losers rather than the messy way at which it was arrived. Yet MPs from across the Labour spectrum believe the affair raises questions about Mr Brown's judgement and even his ability to be an effective prime minister.

There was a cruel irony in Mr Brown being pilloried for hitting the poor, since they have benefited from his "redistribution by stealth" policy since 1997. But he cannot claim bad luck.

He scrapped the 10p rate to finance a headline-grabbing cut in the basic rate of tax from 22p to 20p, which he hoped would woo Middle England. It was too clever by half. Within minutes, his final Budget was dubbed a "tax con". Now he has reaped the whirlwind. And he has no one to blame but himself.

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