Brown stands firm despite credit crunch and discontent within Labour party over tax decision

Apr 16 2008 by Tomos Livingstone, Western Mail

GORDON BROWN insisted last night that neither the credit crunch nor discontent within the Labour party would force him out of Downing Street.

Mr Brown, who arrives in the United States today on a three-day visit, said he understood voters were feeling the financial pressure caused by falling house prices and rising fuel bills. “Eventually people do see you are trying to do the right things by them,” he said.

But there were further signs of Labour discontent with Mr Brown yesterday. Trade Minister Lord Jones had to publicly pledge his “100% support” to the Prime Minister following a report that he planned to resign well before the next election because he could not back Mr Brown.

The former CBI director general Digby Jones said he never claimed to be a political animal but stressed his commitment to the Prime Minister.

And First Minister Rhodri Morgan – a longtime ally – added his voice to growing criticism of a decision to scrap the 10p tax rate.

The controversial move, announced by then-Chancellor Mr Brown last year, came into effect two weeks ago. Several Labour MPs are angry that those earning under £18,500 will end up with a higher tax bill, and Mr Morgan suggested yesterday Welsh workers would be worse hit than those in England. “I don’t think it was good for Wales to have the 10p tax band withdrawn,” he said.

Mr Brown is under pressure from Labour figures concerned that the tax changes are alienating their core supporters and inviting a drubbing in next month’s local elections.

But the Prime Minister said yesterday: “I’m starting a job that I mean to continue.

“I’m a person who has set the Labour Party on a course of making the long-term decisions for the future of our country. And I’ve been through these economic difficulties before and I think eventually people do see you are trying to do the right things by them. We will do everything in our power to make sure we’re on the side of ordinary hard-working families who need a government on their side, that we will take the action necessary.”

Former Home Secretary David Blunkett added to the tax criticism yesterday, warning that those earning less than £18,500 were “crucially affected by small sums of money”.

Angry Labour MPs could even force the return of the 10p rate when the Finance Bill is debated in the Commons next week.

Mr Morgan told AMs in the Senedd: “[If] you haven’t got children, if you’re an empty-nester, 50-plus, on your own or if you’re 18-25 and you haven’t got really high wages or salaries, you probably will find you’re worse off.

“I do think there is a different impact on Wales because there probably are quite high numbers, probably more than in England, say, affected because of the number of people working close to the minimum wage.”

Although a frequent critic of Tony Blair’s public sector reform, Mr Morgan is much closer to his successor, once saying: “I have always had a very, very good, warm relationship with Gordon Brown, really from way back, more than 20 years ago.”

Nick Bourne, leader of the Conservatives in the Assembly, said last night: “Gordon Brown has already been heckled by his own MPs about abolishing the 10p tax rate, now his leader in Wales says he is opposed.

“Rhodri Morgan is trying to distance himself and his party in Wales from Gordon Brown’s economic incompetence because he knows Labour will pay a heavy price for it at next month’s local elections.”

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