Gordon Brown on Wednesday made what the British media and opposition parties widely judged to be the most humiliating and embarrassing policy change of his short career as Prime Minister: a climbdown over concessions to those made worse off by his scrapping of the lowest, 10 pence income tax rate.

Conservative leader David Cameron, hoping to oust Brown and Labour in the next election, branded Brown a “pathetic” figure. Liberal Democrat leader Nick Clegg called him “increasingly pointless”.

Brown, they crowed, was an isolated figure, forced into what the Daily Mail said was a “humiliating U-turn” over tax policies he introduced last year in his final Budget as Finance Minister. Cameron said it was a “massive loss of authority”.

So, is he — and was it?

Undoubtedly, Brown has courted a lot of very bad press over the 10 pence issue. Claims the Labour government have done more than any other this century to help people out of poverty sounded hollow when it became clear that by abolishing a tax band he introduced, Brown was making five million households worse off. The subsequent open rebellion from
Labour backbenchers over the issue just made matters worse.

In the end, however, Brown did — although not admitting a mistake — make changes, stressing he had listened to people’s concerns and acted.

And if Brown can play it right, he may be able to convince voters increasingly turned off Brown and the Labour party that this is the mark of a good leader. “On 10p tax, he listened and acted. That is a sign of strength, not weakness,” the influential Sun newspaper said in an editorial.

Others echoed the line of rebel politician Frank Field, who led the 10p tax revolt, in urging Brown to listen on other unpopular policies. “He can start by scrapping plans to extend
detention without trial to 42 days, a proposal wrong both in principle and practice,” the Daily Mirror said.

If Brown, whom voters view as aloof compared to his populist predecessor Tony Blair, does start to show more of an ability to listen, learn and communicate, however, that may not be enough to silence the low-level chatter that has started to surface about his ability to lead the party into the next election.

Foreign Secretary David Miliband warned Labour at the weekend to stop fighting or it could damage its election chances — a move that raised eyebrows given Miliband is viewed as a possible Brown successor.

Brown has room to reassert his authority. He does not need to hold a general election for another two years, employment remains strong, moves are being made to kick-start the housing market, and the economy is still expected to grow this year.

But first he must weather some major political storms: the biggest work stoppages in a decade, unpopular changes to terror detention laws and local elections on May 1 that will be pored over for evidence of his ability to lead Labour into a fourth successive term in office. No number of visits from George Clooney can help with that.

The Friday night take-away, Saturday shopping spree and summer get-away are in line for the chop, as consumers become increasingly nervous over looming recession. Almost nine out of 10 Britons say they will cut spending on non-essential items to cushion themselves against impending economic downturn, according to a poll of 1,000 people for Web site Fool.co.uk.

A British institution — the good old take-away — is set to receive the biggest blow, with over two-thirds of the nation planning to cut back on curries, fish suppers and late-night kebabs, the survey says. Other planned cutbacks include retail therapy (67 percent) and fewer holidays (49 percent), while 12 percent plan to stop smoking, 4 percent to put pension contributions on hold and 3 percent say they will even cut their kids’ pocket-money.

This is just the latest in a string of evidence pointing to dwindling consumer confidence and increased uneasiness over the state of the global economy. It is, of course, important not to talk ourselves into recession: unnecessary doom and gloom will only serve to exacerbate the situation, something that those with a vested interest in the property market remaining buoyant have long maintained.

But Britons are surely feeling the pinch. The latest figures from Philip Hammond, shadow Treasury chief secretary, reveal that the disposable income of the average working family has dropped to 25,900 pounds today from 26,200 pounds in 2006, and personal debt in the UK is growing at an unprecedented rate — one million pounds every five minutes.

With the cost of living rising while disposable income falls, consumers must feel like they are being squeezed from all sides: failure to make hay while the sun was shining could soon come back to haunt them. It is reassuring, then, that reality is finally hitting home. During a recession, cash is king. And those with the leanest budgets will be best placed to survive.

Few people are more on the pensions money than Scottish Life’s Steve Bee. And he has some strong views in his latest “BeeHive” post following publication of our exclusive story on the soaring costs of setting up “personal accounts” — the government’s brainchild aimed at solving a looming pensions crisis.

Reality seems to be kicking in early on in the dream, says Bee, who finds the whole thing “really depressing”. A chink of light amid the gloom came in this week’s Budget, he says: the extension of the ability of pension fund managers to allow trivial commutation of small pension pots should make things easier and cheaper for occupational pension schemes. But, sadly, such rights are not to be extended to personal pension schemes, a move that only serves to “drive a horse and coaches through the whole idea of our having one simple set of pension rules for all types of pension scheme”.

Others point to the failings of other Budget measures. The formation of a “Savings Gateway”, again aimed at low and moderate earners, might seem like a nice little give-away. It will attract government matching on money saved into the scheme. But, viewed alongside personal accounts, it prompts serious questions, says Tom McPhail, head of pensions research at Hargreaves Lansdown — another leading commentator on the world of pensions. “If the government’s going to match savings pound for pound and your money isn’t locked in until retirement, then surely people will choose that over signing up to personal accounts,” he says. “And the generic advice model proposed by Uncle Otto will simply not be sophisticated enough to cope with these kinds of choices. It strikes me that in themselves these are all good ideas. But throw them together and it’s like cats in a bag.”

Perhaps, then, the answer is something far more simple. Rather than spending billions of pounds on building an “untried and clumsy” pension scheme, wouldn’t we all be better off if those billions could be channelled into directly boosting people’s pension entitlement, asks Bee. This vast sum of money could instead provide a decent basic state pension entitlement for everyone, providing a solid bedrock for private pension saving.

He is not the only one of that mindset. As another leading light, who wished to remain nameless, said to me this week: “If you’re going to spend 2 billion pounds, why not just set up an account and put a lump sum in there for that part of the population (low to middle income earners) that they can’t touch until they’re 65, rather than have all these intermediaries all taking a cut, all making a profit?” Hear, hear.

The dust has settled on Alistair Darling’s first Budget and consumers have been given little reason for celebration. The Chancellor, though announcing various measures designed to increase housing affordability, has done nothing to help the masses.

There were no moves to give a helping hand to hard-pressed householders, already struggling amid rocketing mortgage, food, fuel and tax costs, to ride out an impending recession. Darling did pledge to introduce a savings scheme targeted at low and moderate earners, often least able to save: the “saving gateway” will attract government matching for savings over the duration of people’s participation in the scheme. This has the potential to introduce up to eight million people into mainstream savings in the UK who otherwise might not make thrift a priority.

But the level of take-up of such a scheme, amid record personal debt levels and huge pressure on people’s purse-strings, is debatable. Other such government schemes to encourage the nation to save have hardly been a runaway success: think stakeholder pensions and child-trust funds (CTF). One fifth of parents currently let their CTF expire — the government can’t even give money away.

Individual savings accounts (ISAs), on the other hand, have flourished. They are one of the government’s true success stories. More than one in three adults hold an ISA and almost 215 billion pounds has been invested — making them far more popular than other savings initiatives.

Yet, the limits that savers can squirrel away into these tax-efficient vehicles have sorely failed to keep pace with inflation. The allowance will increase to 7,200 pounds from 7,000 pounds (3,600 pounds of which can be held in cash, up from 3,000 pounds) in the coming tax year — but that means the total threshold has risen by less than 3 percent since the accounts were introduced almost a decade ago. “Failing to increase ISA allowances further is a poke in the eye of savers who need encouragement to put away money,” says David Kuo, head of personal finance at Fool.co.uk.

Other changes to the ISA regime mean people will be able to switch cash holdings into stocks and shares — but the reverse will not be possible. And, once the switch has been made, there’s no turning back. The new rules raise the spectre of “another ghastly financial scandal”, according to Cliff Husband, research director at AWD Chase de Vere. “People could switch their ISA cash savings into investments unaware that they can’t switch back. This looks like another poorly delivered initiative from the government; it would be far fairer to all taxpayers if the switch between cash and investment within an ISA could be easily reversed.”

On pensions, too, there is little to encourage saving. While scrapping the 10 pence income tax rate and reducing the basic rate by 2 pence has done next to nothing to increase people’s take home pay, it has reduced the amount of tax relief they’ll get on their pension savings. The Chancellor has maintain higher level tax relief on gifts to charities, so why not for pensions?

“Frankly, while politicians have gold-plated final salary pensions, they can tinker with regulations which will have no real benefit for real workers,” says AWD’s marketing director Martyn Laverick. “If MPs did not have such generous pensions and they faced the same issues the majority of people in this country face about their pensions we would see more decisive action.”

So, it seems, consumers must face the headwinds and try to ride out the storm alone. From today, they should be tightening their belts.