The 10p tax U-turn
Fraser Nelson 11:53am
Gordon Brown doesn’t get it. Even his U-turn over the 10p tax rate (announced just time for PMQs in the form of a letter to John McFall) is devilishly complicated. There will be compensation for 60-64 year olds and low-paid workers without children. This will come in the form of winter fuel payments or new tax credits. I am sure that in a spreadsheet somewhere in the Treasury, this makes it all okay. But it won’t work outside Westminster and I’ll tell you why.
I spent yesterday on the campaign trail in Greater Manchester and saw for myself the anger. Pensioners were spitting blood, shopkeepers fuming – even people who I suspected were not hit by the abolition of the 10p starting rate think they have been. It seems to crystalise what they don’t like about Brown, and the Tories are exploiting this mercilessly in the local government elections. The sort of people I encountered on the doorstep will not be assuaged by “well, you may get the cash back in the form of a complicated tax credit payment this time next year”. They see their pay package this month, versus last month, and are hopping mad that the amount has dropped. Brown’s solution is too bureaucratic and simply won’t cut it on the doorsteps.
Perhaps more importantly, this kind of U-Turn flies against what Brown said only last week in the White House and sends out a message – Brown buckles. The laddie is for turning. His majority ain’t that big. If you gang up on him, he will give way. So if the rebels settle for this U-Turn, you can bet they will be certainly back for more.
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Comments
JR
April 23rd, 2008 12:37pmWorst of all worlds. Politically leaves them screwed as you said.And practically this is going to be an administrative nightmare. And more people will probably have to claim tax credits to get the "compensation".
Stupid idiots.
I wouldn't be so sure over that spreadsheet either.
TrevorH
April 23rd, 2008 12:51pmIt recognises that they have made a mistake and need to do something about it. If people care to think about it, it shows that Brown was only willing to act with a gun pointed at his head.
But even putting the best gloss on it - what we have is a system where poor people are taxed hen they should not have to be and then have to come as supplicants to the govt to get their own money back. Andrew Neil has just exposed it quite effectively on his lunchtime show.
A pretty pathetic way to run a country. It exposes the flaws in Browns command economy, his whole paradigm, the whole self delusional construct, is shown to be a house of cards.
What now needs examining is the whole core claim that the poor are really being helped by this cats cradle of benefits, many of which are not taken up many of which are wrongly applied and many wrongly targeted.
This statistical cats cradle is wide open to being abused by spinners and propagandists. what is the reality on the ground.
Lets not also forget that Blair backed down and promised a referendum on the EU Constitution, and we all know what happened to that promise once the immediate crisis of confidence was over.
Tim Worstall
April 23rd, 2008 1:21pmAs someone or other said in The Times on Monday:
"to tax the poor so that bureaucrats can give money to the poor is simply ludicrous. We should stop doing it."
Martin Alexander
April 23rd, 2008 1:23pmEvery week at PMQ's Brown finds some way to accuse Boris of wanting to cut police numbers...This obsession is quite worrying.
Mike
April 23rd, 2008 1:24pmPromises of bureaucratically provided jam tomorrow does not pay the bills of today. NuLab will get murdered at the polls over this
Lapsus calumni.
April 23rd, 2008 2:31pm"The Laddie's for turning". I like that one. Another catchy soundbite for Cameron to hammer home, along with the "New Labour - creators of the 'Why bother?'" society.
dearieme
April 23rd, 2008 2:48pmExtra winter fuel allowance: brilliant! That'll go to everyone 60-64, whether they're poor or not, I assume? Yippee.
Eileen Lowen
April 24th, 2008 10:31amIf as I suspect the average income hard working family have yet more clawed back from them by the government it will deter people, like myself a mother of two adolescents, going back to work. I feel outraged that I am being discriminated against because I'm not earning a higher bracket wage. I decided long ago, much to my regret, to enter into the education of our future generations as an Early Years support worker. Might as well retire and go on income support. Wish I was young enough to emigrate, this country isn't worth investing your hopes and dreams in anymore.
Jules W
April 25th, 2008 5:59pmSurely it is a nonsense to tax people who are already living below the poverty line. Brown's solution to this anomaly is for low income earners to enter the benefits system and claim Tax Credits - that's if they qualify of course and many don't. Indeed, many will still be hit by the removal of the 10p rate.
Considering the removal of this band was to finance the lowering of the 22p rate to 20p (which in turn was designed to back Brown's bid for an early election), the least well-off in our society can feel justifiably angry at having to pick up the bill for Gordon's vanity.