Local elections

Parts of Yorkshire bucked the national trend in last week's local elections. There were no Labour losses in Leeds, for instance. But there is no doubt that it was a bad result for Labour. Of course, local elections, like European elections, tend to be dominated by national issues, and in this case the abolition of the 10p tax band featured prominently.

Although there is some logic to abolishing this band (the lower rate applies to a proportion of the income of all income tax payers, meaning that 85% of its value accrues to taxpayers of higher bands - money which could be better used to allieviate poverty by targeting it directly at lower incomes through tax credits and benefits), the policy was not thought through enough in terms of how it would be perceived. Perception is political reality, and a highly visible reduction in take-home pay for lower band taxpayers does not match the sometimes less visible compensations - and not all losers were compensated anyway.

Of course, Labour can point to its record over eleven years which has boosted low incomes through steady economic growth, near full employment, the minimum wage, tax credits, fuel allowances and so on, which far outweigh the effect of the 10p rate. But the opposition were bound to make the most of the headline without looking at the wider context. This should have been spotted and rectified earlier, but at least the government has promised to do so now, refreshingly admitting that (like all governments) it made a mistake. Interestingly, none of the opposition parties are calling for a reintroduction of the 10p rate, but they have certainly managed to exploit the change to the full.