By Paul Hutcheon Scottish Political Editor
JACK McConnell warned Gordon Brown last year that abolishing the 10p rate of income tax would backfire and lose Labour support. The former first minister clashed with Brown during last year's Holyrood election campaign about the move, announced in Brown's last budget as chancellor.
The row undermined Labour's election strategy and led the party to focus on the SNP's local income tax plan.
Brown is facing a revolt among Labour MPs over his decision to fund a 2p cut in income tax by getting rid of the 10p starting rate. It benefits low-income earners and its abolition will increase the tax bill for the working poor.
The Sunday Herald has been told Brown and McConnell clashed during the Holyrood campaign after the then chancellor wanted his tax reforms to be central to Labour's fight for votes. McConnell was said to be critical of scrapping the 10p rate and believed a focus on the tax plans would backfire on Labour.
The pair were unable to resolve the issue and instead turned their attack on the SNP's plans to replace council tax with a local income tax. McConnell was also said to have raised concerns about changes to pensions announced in Brown's last budget.
A friend of McConnell's said: "Jack wasn't happy about the 10p policy and the effect on low-income earners. He and Brown didn't see eye to eye on parts of the Budget and how to make it a part of the Scottish election campaign."
The row comes on top of other revelations about Brown's apparent control-freakery after the Holyrood election, which the SNP won.
Brown, according to Sir Menzies Campbell's autobiography, tried to cobble together a third Labour/LibDem coalition deal. He also tried to block Alex Salmond's path to becoming first minister by suggesting Labour MSPs vote for either LibDem leader Nicol Stephen or Tory Annabel Goldie for the top job.
It is also understood Brown wanted McConnell to quit as Labour's Holyrood leader within days of the party's election defeat, and lobbied for Wendy Alexander to be anointed as Labour leader. This would have allowed her to be Labour's "fresh" candidate for first minister and removed any obstacles to another coalition deal.
However, the plan was thwarted after McConnell clung on as leader and the LibDems ruled out a deal. McConnell eventually quit in August and was replaced by Alexander in September.
Brown is expected to make concessions on the 10p rate when he addresses the STUC congress in Inverness this week. Several of his ministerial aides have criticised the policy, as have numerous backbench Labour MPs.
The SNP stepped up the pressure against the tax change at their spring conference yeterday, where they condemed the effect the policy will have on low-income workers.
A Labour spokesman said: "The 10p rate was introduced by the UK government to help tackle poverty and make work pay. It will benefit 16 million households across the UK, with the biggest gains going to the poorest 30% of people in our society."
A spokesman for the SNP said: "Jack McConnell was absolutely right. Gordon Brown should have heeded his warning and dropped this tax hike on 680,000 Scottish households. Labour will pay at the polls for this tax on the poor."
