Andrew Grice: The week in politics

Brown's luck has run out – and his core support has run away

Gordon Brown was distraught. "Both of us have spent our lives trying to help people out of poverty," he told the Labour MP Frank Field. "Now I am being accused of doing the opposite."

The two old enemies had been thrown together by the search for a compromise over Mr Brown's decision to abolish the 10p lower rate of income tax, which hit 5.3 million low earners. Mr Field, whose proposals as Minister for Welfare Reform were blocked by Mr Brown after the 1997 election, was leading a Labour rebellion demanding compensation for those who lost out from the change.

They were meeting in the Prime Minister's Commons room in a corridor behind the Speaker's chair at 6.30pm on Tuesday. Mr Field then paid two visits to 10 Downing Street to discuss a compensation package with officials. A deal was finally sealed in a telephone call between the two men at 10.45pm.

Although Mr Brown said his Chancellor, Alistair Darling, would have to approve and announce the agreement, it is pretty clear who was calling the shots. The episode provides an insight into the way the Brown government works. To describe the Prime Minister as hands-on is an understatement. This time, there was a good reason for Mr Brown to handle the crisis management. It was, of course, a crisis of his own making.

When the then Chancellor rattled off his final Budget to the Cabinet on the morning of 21 March last year, some ministers questioned whether the low paid would lose out from the decision to scrap the 10p rate a year later. Mr Brown brushed them aside, insisting that his tax credits would take care of the problem. Ministers took his words at face value. In any case, it was too late to change the Budget, which would be delivered in the Commons only three hours later.

When Tony Blair got a preview of the Budget, he also queried the 10p rate abolition. Mr Brown is said to have told him that only about 25,000 people would lose out. Somewhat different to 5.3 million. Mr Brown clearly thought he knew best. He didn't.

With the benefit of hindsight, ministers now wish they had pushed Mr Brown harder. Like him, they were dazzled by the headline-grabbing cut in the basic rate of tax from 22p to 20p in the pound (funded by scrapping the 10p rate). Except that it didn't grab the sort of headlines Mr Brown had in mind: the Budget was widely seen as a "tax con" rather than a "tax cut". His goal, as usual, was to outmanoeuvre the Tories, leaving them no room to cut the basic rate. He also hoped a dramatic 2p tax cut would allay Middle England's fears about him becoming Prime Minister.

As he noted in his surprisingly friendly chat with Mr Field, there is a terrible irony in Mr Brown being pilloried for clobbering the working poor. His entire strategy as Chancellor was designed to help them, even if he didn't shout it from the rooftops in case Middle England heard.

He was more open when he spoke at the weekly meeting of Labour MPs on Monday. "We are one of the few countries which has narrowed the gap between middle income and poorest people," he said.

What really hurt Mr Brown was to be lectured by David Cameron on poverty at Prime Minister's Questions, since the Tories have opposed many of his anti-poverty measures. They would never have brought in a minimum wage or set an ambitious target to abolish child poverty. You can forgive him for thinking that life isn't fair. Politics isn't, certainly.

Yet his critics argue that Mr Brown is the author of his own misfortune. Labour MPs say they have been bombarded with voters telling them they will never vote Labour again because of the 10p decision. One minister groaned: "It hit all the wrong buttons – tax, the economy, looking incompetent and out of touch."

The tax climbdown may have headed off a humiliating Commons defeat but it might not prevent a backlash at the local and London Mayoral elections on Thursday.

The coalition that propelled Labour to power in 1997 has crumbled. Many progressives deserted because of the Iraq war. Now the core vote has been nuked by the 10p tax bombshell. What's left? We'll find out on Thursday after the vote.

Nor is the tax row Mr Brown's only headache. The past week has been a waking nightmare for him, a collection of Labour's worst hits. There was a bumper crop of headlines about a "summer of discontent" after Thursday's strikes. Oh, and we might have another fuel crisis due to a separate dispute. The threat to fuel supplies (rather than the 10p issue) dominated anxious ministerial discussions this week. Mr Blair was seen as a lucky politician. Mr Brown's luck has run out.