28 April 2008
There is growing alarm ahead of this week's local elections that the Government has lost the plot on the most important of all issues - the economy. Gordon Brown has long heralded Labour's economic record, but was left floundering after Labour rebels threatened revolt over his abolition of the 10p starting rate of tax.

Ministers were confused over details of compensation to be offered. It remains unclear how and when it will be paid and to which groups to avoid the Prime Minister's increased income tax on the poorest 5.3 million taxpayers.

Labour MP Frank Field claimed the Prime Minister was committed to backdating compensation. But Yvette Cooper, Chief Secretary to the Treasury, refused to confirm the government's position.

It now looks likely to take until the autumn until we know what the Chancellor will do. He and the Prime Minister have performed a spectacular tax U-turn, making up policy on the hoof to placate a rebellion on the Finance Bill days before Gordon Brown's first local election test.

Meanwhile many low income families in Shropshire will find their income this month cut. Many of these who don't qualify for the help which eventually emerges will slip from view, only to reappear again once they have reached another rung down the poverty ladder.

It is difficult to understand why in the face of a major economic slowdown, rising costs of living and an unstable housing market, the Government decided to make it worse for millions of Britain's poorest. But, after a week of dithering, it is even more difficult to understand how they will get out of this mess, who will get what, when, and how it will be funded.

As the economic outlook darkens, the centrepiece of the Government's economic strategy, presentation of its Budget and subsequent U-turns smack increasingly of incompetence at the heart of this Government.