It was tax evasion that finally put Al Capone behind bars, and it seems that a relatively technical infringement ten years ago may prove a major embarrassment in Gordon Brown’s plans for a seamless transition to succeed Tony Blair.

The row over Brown’s decision in his first budget to liberate £4 billion by reducing tax credits on the share dividends of major pension funds has drawn his supporters into a convoluted and unsuccessful attempt to spin the facts and blame the CBI: but perhaps the real spin is that this focus on this long-running debate over Brown’s first “stealth tax” serves to divert attention from his much bigger and more recent crimes against equality.

Whatever the impact of Brown’s taxes on the private pension funds, his enduring legacy to today’s pensioners has been the continuing devaluation of the state pension and his refusal to restore the link with earnings that Margaret Thatcher broke in the 1980s in a measure which now costs each pensioner almost £30 per week – while the National Insurance Fund sits on a massive unspent surplus.

The massage has gone out loud and clear that the war in Iraq and Afghanistan and Trident missiles are a political priority for Brown and New Labour no matter what the cost, while pensioners, children and the poor are less important, no matter how cheap and easy a solution might be to their problems.

Even his 2007 budget managed to clobber Britain’s poorest families and individuals while pumping tax cuts into the wallets of banks and private equity asset-strippers. Corporation tax was reduced, while allowances were also reduced in such a way as to leave manufacturing industry picking up much of the £2.2 billion bill.

The basic rate of income tax was cut by 2p to 20p – at a cost of £9.6 billion – but £8.6 billion of the cost will be recouped from scrapping the 10p starting rate which Brown himself had introduced in 1999, to fulfil New Labour’s 1997 manifesto commitment to help the low paid. Now the low paid are clearly not a key component of Brown’s electoral public: indeed the most recent statistics showed that this “redistributive” Chancellor has been redistributing money from poor to rich at such a rapid rate that the number of poor children even on the government’s own figures has increased by 100,000 in 12 months. There has been no reduction in the numbers of children in very poor households since New Labour took office in 1997, and numbers of poor childless adults are higher now than any time in for the last 45 years. Overall income inequality is also rising as those on low incomes remain rooted to the bottom: the richest 1 percent have steadily gained, rebuilding their relative wealth to 1945 levels.

Brown also announced plans for a fire-sale of public sector assets over the next four years to raise an estimated £36 billion in one-off income while boosting the private sector. And just days before the
budget another seven massive schemes for new hospitals worth £1.5 billion, to be financed through the Private Finance Initiative were rubber-stamped by ministers: PFI is Gordon Brown’s very own pet scheme for privatising the infrastructure of public services. Unions calculate that the additional oncost of PFI on the hospitals already in operation or under construction stacks up to a massive £500m a year above the costs had they been funded from the Treasury.

Brown’s budget plans now look to squeeze down public expenditure over the next three years from 42.6 percent to 42 percent – a net reduction of £8 billion – while his so-called “modernising” reforms have saddled the NHS with a costly and inefficient “market”-style structure that will pump a growing share of the budget into the wallets of new private sector providers.

Brown was apparently dismayed that his carefully crafted eye-catching and apparently “tax-cutting” “green” budget has been so swiftly exposed and turned into an electoral liability, in the run up to local elections at which New Labour is expected to face a hammering.

Not only has he antagonised the rich and ripped off the poor, but his paltry tax increases on air flights and gas-guzzlers are quite irrelevant in the face of government support for massive road and airport expansion. In fact, research suggests that Brown’s recent so-called green budget proposals would cut only 33,000 tons a year from Britain’s domestic carbon emissions – a mere 0.15% of the total! –so much for New Labour’s false claim to be “leading the world in tackling climate change”.

But in the absence of any credible heavyweight Labour challenger willing to spell out a genuine and progressive alternative to Brown’s closet Toryism it seems unlikely that the row, any more than the allegations of his “Stalinist” leadership style, will interrupt his progress to Number Ten.

The question remains on whether he will be as successful in bullying and bribing the electorate and utilising Britain’s shockingly undemocratic electoral system to secure a fourth term.