Posted tagged ‘10p’

…For Everything Else Under Labour, There’s Mastercard

May 13, 2008

Worth highlighting the maths on show today, highlighted to my eyes first in a comment over on Iain Dale’s site, although it’s plain for all to see.

Note One:

  • Cost of scrapping the 10p tax band in April… £700 million
  • Cost of increasing the personal allowance by £600 for basic rate payers in May… £2.7 billion

Note Two:

  • People affected negatively by scrapping the 10p tax band in April… 5.1 million
  • People affected negatively by increasing the personal allowance in May… 1 million
  • People affected positively by increasing the personal allowance in May… 22 million

Tax and Spend the New Labour way: it’s all spend, spend, spend at the moment, and the tax is paid by the lowest income earners.

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Alistair Darling’s “I’m Alright Jack” Bribe to the Middle Class

May 13, 2008

So let me get this right, we can’t re-open the Budget, we’ll look at it next year, it’s too complicated to go messing about with – but we can! Let’s just lift the personal allowance by £600, which should make up for the doubling of the basic rate of income tax for everyone… well, at least 80% of those that it made worse off.

All of a sudden we can find 2.7 billion pounds to fund a raising of the personal allowance, because thats the easiest way to get to some of the people affected by this. Yes of the 5.2 million hit by the doubling of the 10p tax band, 4.1 million will not loose out. And the other 18 odd million people who are in the £12,000 to around £40,000 annual earnings, what are we to make of the £120 going into their pocket? An early christmas present? A chance to buy an iPod?

If there was an election on the horizon, then this budget would look like a blatant come-on. I mean a General election, not jsut Crewe and Nantwich, although this may (may) act as a firebreak for Labour’s core supporters. But with the first stage of the refund, the lump sum of £60, not hitting anyone’s wage packet until September, and the likelihood that if Gordon Brown is to make way for a new Labour leader, then any post-conference bounce in the opinion polls could mean an election at the start of October. Just as everyone sees a bulge in the wage packet… Naw, it could never be that well planned.

This was a cock up. It was wrong last year when announced, it was wrong this year when it was let through, and the compromise is fatally flawed, misses the worst affected by the changes, and leaves some of the most vulnerable people in society significantly worse off (those on roughly £6,600 to around £8,000 per annum) while the middle classes get enough money to buy a posh meal and a night out.

This from a Labour government? From a government that would shout down any hint of an unfunded tax cut? Obvioulsy borrowing £2.7 billion to do this one off tweak isn’t unfunded. It’s just being paid for on the never-never. It’s tax and spend without the tax.

The double speak of “…the remaining 1.1 million households will see their loss at least halved. In other words, 80 per cent of households are fully compensated with the remaining 20 per cent compensated by at least half” is clear to the public. Over a million of the lowest paid people in the UK, at the very bottom of the income tax scale, are loosing money, while the rich are getting the full benefit of a tax cut.

PS: With roughly 600,00 households lifted out of income tax altogether, how long till this gets rounded up to “New Labour took one million households out of paying income tax altogether?”

Oliver Letwin Questions “10p Tax” and Electoral Law

May 13, 2008

I’ll post up some more thoughts on Alistair Darling’s statement to the House of Commons regarding the change in personal allowances (to cover the mess of the doubling of the 10p tax band) later on, but for now, I want to echo Oliver Letwin’s comment in the house. Does the announcement of this change in the run up to the Crewe and Nantwich by election breech any part of electoral law?

Certainly in the run up to the Local and General Elections there is a period of Purdah, but I’m not aware of any special arrangements for by-elections. It would be silly to shut down everything just because of a by-election (think how much fun you could have in the run up to key legislation), but this announcement could be seen as blatant electioneering – which is of course what the ‘tax cutting budget’ was intended to do in the first place.

Anyone more versed in this issue care to comment?