A ten-pence piece: (1) the politics

(See here for part 2 – the policy.)

Lamentable. The government won’t get any credit at all for this week’s raising in personal allowances, just as it didn’t get any for the cutting of the basic rate or the increasing of tax credits last year; the difference is that this time it doesn’t deserve any.

The fact that Alistair Darling kept using the word “compensated” in his statement shows that the government has been forced into accepting the narrative that abolishing the 10p rate was somehow an illegitimate. ‘Compensation’ is what you give people when you’ve wronged them.

The move is made from a position of visible weakness, so the best political result for Labour will be a few days of ‘U-turn’ headlines followed by the stopping of the bleeding. But this self-inflicted wound will take some time to heal. In one inexplicable move, Gordon Brown managed to blow most of his (justified) reputation as a pro-poor redistributionist. Recovering from that will be very tough.

(Also inexplicable is the failure of more Labour MPs to kick up a fuss back in March 2007, when a quicker and easier resolution would have been possible. It’s said that they didn’t want to mess things up as Brown was cruising towards the leadership, but surely there were a good number of ‘ultra-Blairites’ and Campaign Group types for whom this wouldn’t have been an issue?)

Although it’s noteworthy that at PMQT yesterday, David Cameron’s main attack on Brown was scattershot, mentioning the 10p affair as one of a string of issues – so presumably he thinks there’s now not much political mileage in it.

This change is supposedly temporary, for one year; Darling also said, though: “For future years our aim is to continue the same level of support for those on lower incomes”. In practice, it will be politically near-impossible to actually cut personal allowances back again next year, so this is surely here to stay.