UNITED KINGDOM

Labour election defeat

Friday 02 May 2008

Tax row sank Gordon Brown

Gordon Brown is not responsible for the global economic turmoil. But the former “iron chancellor” should have known better than to introduce tax reform that hit families most vulnerable to rising food and fuel prices. His perceived insensitivity was a key factor in Labour’s election slump.
 

Stalling didn’t help. For weeks Brown refused to acknowledge there was a problem. It was only sustained pressure from backbench Labour members in parliament that forced a change. “I get it,” he finally told the parliamentary party on April 21, thus staving off a rebellion. Last week his government announced a compensation package for those who lost out in the reform. But the damage had been done. Labour activists canvassing in the local elections reported widespread anger and dismay among low-income families.
 

The poor results don’t necessarily spell the beginning of the end for Gordon Brown. “It’s the economy, stupid” is likely to dominate the general election, due by June 2010. The global outlook could improve by then. Giving succour to Brown, the Bank of England said on Thursday that the worst of the credit crunch might be over, adding that banks are too cautious in their lending.
 
 

Besides, there seems little appetite in Labour for a leadership challenge. There is no obvious candidate, and exposing internal divisions can only help a resurgent Conservative party. Labour well remembers the string of damaging Tory leadership contests in the 1990’s and early 2000’s until things stabilized under current head David Cameron. “Staying the course” and “better explaining to people what we are doing” is what the government now intends to do.