Oh how David Cameron must have loved Prime Ministers Question Time today with news breaking that Gordon Brown had caved into a possible Labour Party revolt and agreed to compensate those hit hardest by the abolishment of the 10p tax rate. So what does it mean for you?

While the 10p tax band had only been around for a short while, Gordon Brown introduced plans to axe it last year in his last budget speech. The band basically meant that those on the lowest pay were the main gainers with a portion of their income taxed at only 10p in the pound. It had been well received by traditional Labour voters and seemed to be a vote winner for the government, although quite why Gordon Brown decided to axe it is a mystery.

The Government have now promised a full review of ways in which those who lost out can be compensated, with many suggesting increased winter fuel allowances for the elderly and those without children being introduced to the tax credit system. Quite why the government don’t just reinstate the 10p tax rate is a little strange, because all of the methods which have been mentioned as possible ways to compensate people will actually be expensive to run themselves!

It will be interesting to see how the rebel Labour MPs and the opposition react in the immediate future because we had a situation where a government budget could (and was probably about to be) blocked in Parliament. This would have caused something of a constitutional crisis and seen Gordon Brown’s credibility fall even further. By “caving in” to the rebels he has definitely chosen the lesser of two evils – but for how long will he keep the Premiership?

At this moment in time the UK financial system is like a rudderless ship with short sharp corrections attempted when someone decides to take the wheel. For many months now, voters have been hit with rising taxes, rising fuel cost and a general rise in the cost of living, all at a time when income is under pressure and money is tight. If an election were called now there is every chance that the Tories would gain a majority in the Houses of Parliament, but even a delay until 2010 at the latest may not be enough to save Gordon Brown.

He waited years to take the role of PM and then just as he gets comfortable in his seat it all starts to go very wrong. In the eyes of many voters, and Labour MPs, he is now damaged goods and highly likely to see a leadership challenge at some point over the next 12 months (possibly after the May local elections). More surprising than anything has been his dithering with regards to the UK economy and the tax regime of the current government. Time and time again the former “Iron Chancellor” has performed massive U-Turns with even his most loyal supports at a loss to explain what has gone wrong.

Control of the UK economy evaded Gordon Brown some time ago and he is now losing control of his party.