It's a Start

So Darling has to cave:

Tuesday's measures mean that 22 million taxpayers who earn up to £40,835 and pay the basic rate of 20 per cent tax will receive an extra £120 in their pay packets this year. This has been achieved by raising the starting point for paying tax by £600.

Those who earn more than that will not benefit because Mr Darling has lowered by £600 the threshold at which they begin paying the higher rate of tax.

Almost everyone on the higher rate will thus be paying more tax (some 150,000 of them won't apparently). But at least we have established the oidea that we should be taking the lower paid out of the tax net altogether.

John McFall, the Labour chairman of the Commons Treasury select committee, said it would be "churlish and mean not to welcome a statement today that benefits everyone who is on basic-rate taxation and takes 600,000 people out of tax altogether".

Quite, so let's do it some more shall we? Raise the personal allowance by £6,000 and get most of those working poor out of it altogether?

But as many have noted there's something even more important about this:

Critics claimed that the giveaway threatened to undermine Labour's economic record, as the Treasury is borrowing £2.7 billion to pay for it,

That rather changes the terms of the tax debate. No more can tax changes be described as "unfunded". Sauce for goose and gander and all that.

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