Fraser Nelson

The 10p tax U-turn

The 10p tax U-turn
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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.

Written byFraser Nelson

Fraser Nelson is the editor of The Spectator. He is also a columnist with The Daily Telegraph, a member of the advisory board of the Centre for Social Justice and the Centre for Policy Studies.

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