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Sunday, 20th April 2008

Raising taxes on those who work hard for little money could be the end of Labour

Andrew Neil 10:44am

Coffee Housers will soon be piling in with their own take on Alistair Darling's performance on BBC1's Andrew Marr Show this morning -- he seemed to accept the abolition of the 10% income tax band had created serious problems by promising to return to the matter in future budgets (maybe even this year's pre-Budget Report) -- but I have seen the impact of the scrapping of the 10% band at first hand.
 
My part-time cleaner -- who works for me several hours a day -- is now £8 a month worse off after tax as a result of Gordon Brown's decision to double the starting rate of tax in his last Budget as Chancellor. Now £96 a year is not a crippling loss, even for lowish-paid cleaners (and I will make it up to her by increasing her pay), but she hardly deserves to be worse off in any way. Across the political spectrum, people are asking: why penalise, even by small amounts, those who get up early, work hard for modest amounts of money and pay their taxes? If anything, such strivers should be paying less tax, not more -- or better still for the lowest-paid, no tax at all. Above all, people are saying, why is a Labour government doing this?
 
I don't know enough about my cleaner’s personal circumstances to work out if she will qualify for any of the Brown/Darling compensating handouts (she has no children so there will be no increased family tax credit). In any case, what is the point of taking away with one hand and giving back, through a Byzantine bureaucracy and complicated forms, with the other? Why not simply let them keep more of what they earn?
 
I remember in the latish 1980s my then cleaner telling me that her poll tax was higher than mine -- and knew then that the game was up for the controversial Thatcher local tax reform. This could be a similar defining moment for the Brown government.

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Joe Mooney

April 20th, 2008 11:02am Report this comment

Excellent article from Mr Neil. Labour are the party who make the poor poorer and the sooner they go the better. They do not deserve to be elected for another term. I would say to the people of this country if in doubt dont be afraid to chuck this Government out.

kinglear

April 20th, 2008 11:13am Report this comment

As Silvio Berlusconi said - " Yes the Left love the poor. Every time they get into power they make more of them"

Jennie

April 20th, 2008 11:29am Report this comment

Yes, the abolition of the 10% tax band is Labour's 'Poll Tax'. How can politicians be so blind? I can only assume that, at the time, Gordon Brown et al simply did not realise just how many millions of taxpayers (and voters) would be adversely affected by the abolition of the 10% rate.

The Government doesn't even seem to care about this massive vote loser. Are they just tired of governing after 11 years and are accepting the inevitable?

salieri

April 20th, 2008 11:38am Report this comment

There was an audible gasp of incredulity when Angela Eagle, asked about this fiasco on 'Question Time', said: "Watch this space". One of those rare epiphanous moments when everybody understood, and she could no longer disguise, that this was policy-making on the hoof and an own goal of staggering ineptitude.

Familiar Clown

April 20th, 2008 11:46am Report this comment

Yes, a good article by Neil for driving a point home. But not 10 out of 10, I'm afraid, for muddying the waters with the Poll Tax dig. He may not have known enough about his then cleaner's circumstances then either.

Perry

April 20th, 2008 11:58am Report this comment

[re the piccy above]

Yes, that’s right MacDollop, - hang your head in shame!

Perry

April 20th, 2008 12:10pm Report this comment

[sorry – second bite at this cherry]

Yes, and picking up on the article “ . . . what is the point of taking away with one hand and giving back, through a Byzantine bureaucracy and complicated forms, with the other? . . . “ – that (to a cynic like me) – is a sizeable chuck of the whole point.

The more people that can be involved in the bureaucratisation of life, and therefore monitoring and control in whatever form, - the better. In fact, it could be seen as the default position.

And hence more state control and interference by the ever-growing bureaucracy.

Neat, isn’t it? - God help us.

[Oh, and Happy St George's Day!]

mark Kingsley-Williams

April 20th, 2008 12:14pm Report this comment

You ask "Why not simply let them keep more of what they earn?"

Increasingly Gordon Brown and Labour act as if we have no rights to our own incomes. Rather it's theirs to do with as they wish. And if they take more but return a small part we should be grateful.

Here is a dividing line the Conservatives should
make bold.

John

April 20th, 2008 12:51pm Report this comment

You ask 'Why'? Simple: the arrogance of office, arrogance which started with this demented lot at some point in June 1997, causes a disconnect from reality. We have been governed by demented people (and of course, ignorant, stupid and corrupt demented people) for nearly 11 years.

Border Reiver

April 20th, 2008 12:57pm Report this comment

It's an open goal for Osborne. Take up Lord Forsythe's proposal and raise the low-paid out of the threshold altogether and pay for the reforms with the billions saved in bureaucracy. The Brownites are correct that Cameron has yet to 'seal it' with the electorate.

dexey

April 20th, 2008 1:18pm Report this comment

At the last election I voted Labour for the first time because my local MP is very good at constituency work. I would vote Labour again to support him but in September I retire and would have fallen into the 10% tax band.
It is going to be hard enough to manage but now I am expected to help fund the tax breaks for the wealthy. I have already given up my car, had a water meter fitted, and reduced my Sky package back to the basic. I don't take foreign holidays and my UK holidays are cycle camping. I won't qualify for any credits. Where else can I make savings? I can see myself going cap in hand to the ex forces charities as my savings run out.
I feel ashamed that this Scots led government sees fit to penalise me.

Ron B

April 20th, 2008 5:15pm Report this comment

I have seen a lot of Andrew Neil over the years and struggle to know exactly where his political direction is (BBC employees are very bias towards the left) but he must turn his face away from this man Brown and his lightweight cabinet if he ever faced that way in the first place.

salieri

April 20th, 2008 6:18pm Report this comment

Ron, if we don't know Neil's political inclinations that is the highest praise you could bestow on his professionalism. He is not, in any case, a BBC employee as far as I know, and I think that shows too. You could not say the same of many who are.

erica

April 20th, 2008 8:55pm Report this comment

Andrew Neil's cleaner shows worrying signs of wanting to be independent. Labour don't like that.They prefer people to be dependent on benefits provided by the state.

Fergus Pickering

April 21st, 2008 3:58am Report this comment

Erica has hit the nail on th ehead, surely. I poor people are dependent on state benefits then they will vote Labour because the other lot might take them away. If EVERYBODY is so dependent then the Labour government is elected forever.

steve

April 21st, 2008 8:31am Report this comment

I wonder just how the Labour party called this one so, so badly. If you manage to get yourself into a position where the Conservatives can now legitmately call themselves the champions of the poor, you are in deep, deep trouble. Mind you the Conservatives will have to be careful not to fall into an elephant trap. It is perfectly legitimate to criticise the abolition, but they will have to outline what they are going to do about it - the money required to compensate is not going to magically appear

Ian C

April 21st, 2008 10:03am Report this comment

The idea that someone on a cleaner's wage pays tax in the first place is incredible. The stupidity is that if he had rasied the threshold a little higher he could have avoided all this flak, which proves that is was a tax raising sleight of hand move that Brown thought very clever as he sat down after presenting the 07 Budget.

Jennie

April 21st, 2008 11:40am Report this comment

The personal allowance for State pensioners aged 60-64 is the same as that for people aged under 60. Whereas the personal allowance for State pensioners aged 65+ is almost twice as much.

Why? State pensioners aged 60-64 are still State pensioners.

steve - the government has magically found £50bn to bail out the banks. It would cost a fraction of this to compensate people hit by the abolition of the 10p tax rate.

Fraser Allonby

April 21st, 2008 11:57am Report this comment

Is it just me, probably, but haven't these proposals been around for the last 12 months? During that time how much political capital have the Tories made from it? None. There was a real opportunity to discuss taxes and potentially lowering them rather than social engineering through tax credits. It is scandalous that the lower paid should face such crippling marginal rates of taxation. My message to Dave: simplify tax, take the low paid out of taxation, listen to Lord Forsyth, and stop relying on Labour backbenchers to do your job for you.

David Short

April 21st, 2008 1:20pm Report this comment

Can't see the point of starting a blog with a position that no-one would disagree with.

Andrew Smith

April 21st, 2008 3:07pm Report this comment

I can't believe the poorest in society are paying out more. This Labour Government is a disgrace. I won't be voting for Labour ever again.

David Vinter

April 21st, 2008 4:47pm Report this comment

Surely Brown, really made a slip up in Maths, and was far too arrogant to admit his mistake. Then they just hoped it would get lost.

Richard

April 21st, 2008 11:21pm Report this comment

I reckon at least half your bloggers could fire up excel and work out a smoother and simpler tax formula than Gordon Brown. And what about the enormous pension cliff facing men born before April 1945?

C J Wilkinson

May 2nd, 2008 7:16pm Report this comment

Any government that penalizes the least well off workers deserves to be kicked out of office. We need an urgent de-complication of the tax system now along with a concerted effort to reduce the ever-increasing gap between the rich and the poor

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