Analysis
What went wrong for Labour?
While one single factor cannot explain Labour's poor electoral showing, the 10p tax row has been deeply damaging for the party on the doorsteps
Andrew Sparrow, senior political correspondent
www.guardian.co.uk
Friday May 2 2008
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This article was first published on www.guardian.co.uk on Friday May 02 2008. It was last updated at 07:47 on May 02 2008.
Gordon Brown was cheered raucously in the House of Commons last year when he made his surprise announcement to slash the basic rate of income tax from 22p in the pound to 20p.
But this morning, as he analyses what appears to be the worst set of local election results for Labour since the 1960s, the prime minister may be regretting the sleight of hand he used to fund his surprise headline-grabbing announcement ˆ the abolition of the 10p starting rate of tax.
Labour campaigners say that the abolition of the 10p rate, and the perception that Brown was willing to penalise low-income workers to fund a tax cut for Middle England, has been a deeply damaging issue for the party on the doorsteps.
The elections were, of course, local and it is mistake to assume that one single factor can explain the results. Concerns about falling house prices and problems with the mortgage market, mid-term inertia, and the popularity of a resurgent Conservative party were all probably relevant, alongside innumerable local issues ranging from council tax to the emptying of bins.
But the 10p row was widely reported in the weeks running up to polling day, encouraging voters to make a connection between Brown's actions and their own economic wellbeing.
Labour MPs reported that, even after the government announced a compensation package for the losers last week, voters were still angry about the decision. There seems to have been a particular backlash in Labour heartland areas, such as Merthyr and Blaenau Gwent in south Wales, where the party lost control of councils it has dominated for years.
The irony is that there are far more winners than losers from the abolition of the 10p starting rate. If everything had gone according to plan, around 10 million families would have noticed their household income going up when they received their April pay packets, with the tax changes coming into effect for the first time.
But Labour campaigners have discovered that there were plenty of voters who thought they were losing out because of Brown's stance, even though they were not.
With food and fuel prices soaring (for reasons over which the government has very little control), voters noticed that their living standards were declining ˆ and many of them seemed to blame the government.
