PM: tax move a necessity, not a political ploy

Gordon Brown was accused yesterday of being "in denial" after claiming the £2.7bn package to compensate losers from the abolition of the 10p tax rate was designed to help Britain survive the global economic storm.

In media interviews and at a press conference, Mr Brown continued his attempted fightback, insisting he would not be pushed out of office before the next election and dismissing the idea that Labour MPs were plotting against him.

He acknowledged many cabinet ministers were good enough to be prime minister but claimed a mandate to lead Labour after being elected unopposed last year. "Of course there are many people able to do the job, but I'm doing the job," he told journalists at Downing Street. "I'm not going to be put off by the sort of gossip you are indulging in today."

Mr Brown argued he is the best person to lead Britain through the global economic problems. "I have done it before and I can do it again," he said. "I feel I am in the right position to be able to sort out the problems we have now. We will not hesitate to take whatever action is necessary to take the British economy through difficult times."

He denied there was little he could do to influence global trends such as soaring oil prices, saying: "Good economic decisions can help people through difficult times." The Prime Minister said the Government had decided both to help the losers from the 10p tax change and the economy as a whole. "It was not brought about as a result of political expediency," he said. It was not unprecedented for a Budget to be changed to take account of new economic circumstances.

But opposition parties accused him of trying to camouflage his humiliating U-turn over the 10p tax rate as a measure to combat the economic downturn. George Osborne, the shadow Chancellor, said: "Gordon Brown is treating the British public like fools. Everyone knows that the £2.7bn was spent trying to save the Prime Minister's political skin. If the measure was really part of a long-term plan rather than a short-term political fix, it would have been in the Budget 10 weeks ago, not rushed out in a panic a few days before a by-election."

The Tories pointed to the Labour campaign for next week's Crewe and Nant-wich by-election in which Tamsin Dunwoody, the Labour candidate, claimed credit for the tax U-turn. It reads: "10p tax action: Tamsin delivered for Crewe and Nantwich. You told her your concerns about the 10p rate and she put them directly to the Chancellor. She stood up for you!"

Nick Clegg, the Liberal Democrat leader, said: "Claiming that this week's tax announcement was not made because of the fiasco surrounding the abolition of the 10p rate is complete nonsense. Gordon Brown's premiership is collapsing around his ears."