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Abolishing the 10p tax rate shattered the contract on which New Labour was based

Wednesday, 7th May 2008

Frank Field reviews the week in politics

The horror felt by Labour MPs is compounded when they, like so many other groups, have been made better off overall by the Budget changes, knowing that their poorest constituents are largely footing the bill. But this anguish felt by MPs masks a much deeper crisis. The 10p abolition strikes at our integrity as centre-left politicians. While consenting to throwing overboard practically everything associated with Old Labour, we MPs could still walk with our heads held high, belonging to a party that, while winning the yuppie vote, was also always promoting the interests of the poor, and doing so much more effectively than any other political party. Building the broad coalition was important, but this building was not a substitute for the core belief.

The very essence of being a centre-left MP was rudely and brutally questioned by the 10p abolition. And MPs have reacted by letting their decent instincts be known. What is the point of us being Labour MPs if we cannot protect the poorest?

The government was slow to grasp the intensity of feeling that gripped Labour MPs right across the party. The 10p revolt is unlike any other faced by the Labour leadership over the past 11 years. On many other issues — such as the 90-day detention proposal — MPs may equally strongly disagree with the leadership’s line. But whatever stance these individual MPs take on these issues, none believed the matter to be of first rank. The consequences of abolishing the 10p rate are; and it has at a stroke placed clear red water between practically the whole of the Parliamentary Labour Party on the one hand and the government on the other.

The government to its credit is trying to row back, but is doing so knowing that it has burnt its 10p boat. Crucially, the government must publish immediately a simple statement that we can all understand: that it will strive to devise a compensation package that covers as many losers as is possible, and that the package itself may have to be made up by a number of measures, but that all the measures will be backdated to 6 April of this year. It is the broad outlines of what a package might take — Inland Revenue and tax credit measures — that the government must relay to the voters in Crewe as well as to the rest of us in the country.

Frank Field Is MP For Birkenhead.

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Edwin

May 8th, 2008 2:32pm

"Socialism" - A flawed ideology based on utopic nonsense. I wish the socialists would keep it amongst themselves and stop trying to impose it on perfectly innocent people looking to improve themselves. The only achievement of Labour over the last decade is to keep the no-hopers where they and frustrate those who wish to climb the social and career ladder.

EyeSee

May 8th, 2008 8:17pm

Frank, I fear you assume too much of your fellows. Labour MP's in general and far left in particular are the most assiduous in seeking pay rises and fiddling their expenses. Anguished for the poor? Not in the slightest, for them the genius of New Labour is power without responsibility and lots of money. Another house, Tony?

Mark Musoke

May 8th, 2008 8:19pm

Erudite as usual but misses the central problem of New Labour. Crosland has not been proven wrong yet! Real change comes from within not without...
Sadly Mandelson, Blair et al have pedalled a complete middle-class charade. Blatcherism began when well meaning and some "socialist" people said that selection and competeition were wrong. Social mobility has steadily declined since. Those middle classes with the knowledge have persistently lined their pockets, elbowed their way around and promoted a false meritocracy. Politicians have become professionalised and ever more insular. Sadly fewer and fewer of them could hold down a real job in the outside world. Has everyone forgotten 1976? This country is once again becoming an economic basket-case. Tax credits are just a form of continuous electoral bribery and not sensible fiscal planning. Please can we all just get real!

Dexey

May 8th, 2008 8:27pm

"Labour MPs are horrified to find that many of their poorest constituents are made worse off. They need no reminding, as some of the London media do, that £2 or £3 a week is for these households a significant part of their budgets at any time, but particularly so when prices are on the rise."

Allow me , Mr Field to quote from a letter from the Treasury signed on behalf of Rt Hon Jane Kennedy MP:
" There are some low income individuals who..........may see a small loss from the personal tax package announced at Budget 2007. However, these losses will be relatively modest, at around 32 per week on average.

the problem is not the London Media understanding but the labour MP's who are ministers.

Merda taurorum animas conturbit

May 9th, 2008 9:40am

I suspect the real reason Labour MPs are in a tizzy has less to do with concern for the pockets of their poorer constituents and more the fact that those constituents are no longer willing to unthinkingly vote for the self-proclaimed 'party of the working man' (but which is, in reality, the vehicle whereby a trendy metropolitan elite gets to keep its snout into the trough of public sector jobs and cash).

John Hutchings

May 9th, 2008 4:56pm

Combine the above with John Hutton's speech of 10/03/2008

"Rather than questioning whether huge salaries are morally justified, we should celebrate the fact that people can be enormously successful in this country. Our overarching goal that no one should get left behind must not become translated into a stultifying sense that no one should be allowed to get ahead.

‘I believe a key challenge for New Labour over the coming years is to recognise that, far from strengthening social justice, a version of equality that only gives you the opportunity to climb so far, actually subverts the values we should be representing."

and it all amounts to an end of 100 years of supporting the underdog.

Derek Harvey

May 10th, 2008 6:02am

I am a pensioner living abroad, no, not a filthy one, just a chap on a modest pension finding that I can live more economically abroad than I could in the UK. As my pension is modest, the abolition of the 10p rate of Income Tax for the first few thousand pounds of taxable income means that I shall be paying twice as much as much tax as I did last financial year. No, it is not big bucks, but I would sooner see it in my pocket than in somebody else's. These promised recompenses mean nothing to me unless they entail a refund of 'overpaid' tax.

Martin Morrow

May 10th, 2008 11:58am

By Jove, Frank Field pulls out all the Labour idealism history.
Pity that it's all hokum.
Labour tried to pull a fast one, as they have many times over the past 11 years.
Only this time everyone had had enough of the tax and spend.
Labour MP's are whimpering because they see the trough being take away.
Nothing like greed to motivate Labour.
Altruism? Wasn't that word banned by Hardie?

Larry from Crewe

May 10th, 2008 1:56pm

Crewe and Nantwich is already lost look at the local election results. The main cause is the mass immigration into the town with the resulting loss of job to the indigenous population and the resulting lowering of wages to the minimum wage look at the jobcentre plus site for Crewe to see that nearly all jobs advertised are at or just above the minimum wage, we now have a generation who do not know job security or have any possibility of financial security

Jock

May 10th, 2008 3:28pm

Be fair, Frank. New Labour have made it their business to help hard working families. Look how well the Blairs have done.

TDK

May 13th, 2008 4:05pm

I see, Socialism doesn't work unless you change the people.

Funny how so many socialists come to the conclusion that it isn't the policy that is wrong, it's the people. Good old philosopher-kings, always know better than their subjects. I hope you make this a central plank in Labour policy. If you do, I will be dead and buried by the time you next win.


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