Trouble at home: the 10p tax rate

Today the Prime Minister was forced to pledge to compensate financially the 5.3 million British people who would have lost out as a result of the last budget's decision to abolish the first, 10p (=10%) tax band. Faced with a Labour backbench revolt of up to 45 MPs, he had to yield to the pressure or risked his first Commons defeat. Pensioners and single taxpayers, who do not benefit of other mechanisms like the tax credit, will get direct financial help, in spite of Brown's previous claims that there was no possible funding in the public purse. This whole episode illustrates the fragile political situation of the PM, who is very low in the polls and does not have total control over Labour MPs.