Alan Johnson in mea culpa

Alan Johnson, the shadow chancellor, yesterday begun the long march to regaining the Labour party’s economic credibility as he admitted the previous government had made several mistakes. He rejected claims of “profligacy” but said Labour had become too reliant on tax receipts from the City, and had failed to recognise they would vanish in the event of a financial crisis. “Before the crisis hit, the City paid around 25 per cent of overall corporation tax in this country – £10bn in 2007. A booming sector with high remuneration and profits was paying a lot of tax but this reliance on the financial sector made our tax base less resilient when the global financial crisis hit,” he said.