Thursday, 3 April 2008

Gordon and his 10p tax band

When being pressed by John Humphrys in March 1997, on why New Labour's 'progressive' taxation policy did not include the removal of the ceiling on National Insurance, Gordon Brown was keen to deflect and highlight his position on another tax matter.

A transcript of the interview from 'On the Record' on 23 March 1997 clearly demonstrates Gordon Brown's commitment to a 10 pence starting rate of income tax and his reasons for that commitment.

"What I would like to do is introduce a lower starting rate of tax at 10 or 15 pence in the pound and you see the reason for that is to encourage the unemployed back into work, to give the low paid a better incentive, to ensure that you have a break from the high marginal tax rates at the very bottom and that's where the difference of principle arises between us and the Conservative Party." Gordon Brown (then Shadow Chancellor) 23 March 1997

So where's the 'difference of principle' between New Labour and the Tories now then Gordon?

Why have you scrapped the 10 pence starting rate? Are there no unemployed people to 'encourage' back into work in 2008? Is everyone now earning a decent living? I take it there are no high marginal rates of taxation for people on low incomes these days?

Well, of course all of these remain a problem today.

And it's not good enough to say that the people the 10 pence starting rate was designed to help are now being helped by the National Minimum Wage and tax credits.

The National Minimum Wage has increased the incomes of many people over the years, but the cost of living has also risen. People are having to fork out a lot more for basic necessities like fuel for example. Plus, is that really the level of aspiration that Gordon Brown has for people? Working 40 hours a week for less than £12,000 a year? There you go folks, here's your minimum wage - but that's it, we can't have your incomes rise any higher. According to research by the Institute of Fiscal Studies, the abolition of the 10 pence rate will harm the incomes of those earning between £5,435 and £18,500. That's Gordon Brown's 'socialism' for you. No wonder Wendy Alexander has discovered a new fondness for it!

And consider the tax credit system for a moment. Yes, the payments have been a welcome boost to many families. But what about those who received over-payments ranging up to thousands of pounds, through no fault of their own, who have been plunged into debt by this overly complex system? I think most people will now know somebody who owes the Inland Revenue money because of this outrageous situation. People who would be eligible for tax credits have been put off from applying for this means-tested support as a result of this fiasco. We need a much simpler and more transparent system to support people than this discredited system.

So, this week, more than 300,000 people in Scotland face higher tax bills - many of whom will already be struggling. All courtesy of 'Brown's Britain'.

3 comments:

Jeff said...

I can't think of a more succinct or effective article that pulls apart Brown's tax as well as this.

Nicely done...

Julie Hepburn said...

Cheers Jeff!

Cyber Nat said...

Gordon Brown's intellect is more than this world can handle.