Wednesday, April 23, 2008

Brown's FaceSaver Starts to Unravel

Labour's PPC for Putney Stuart King has this to say on the 10p tax debacle...
I understand the difficulty normally loyal backbench Labour MPs are now in: I am
not standing to be your Labour MP to go to Westminster and then habitually vote
against a Labour Government. So in no way do I underestimate the dilemma loyal
Labour backbenchers face - and the distaste voting down our own government
leaves them with - it's the same for me.But the government is wrong on this and
if it refuses to back down or rectify its mistake - as they have said they will
not, I can see no purpose, merit or honour in being a Labour MP if that role is
to make life harder for the least affluent, the pensioners and the part-time
workers of Putney.

Not to worry Stuart, you're not likely to get the chance. He wrote this before the climbdown by Gordon Brown. I wonder how he feels now that the climbdown is unravelling as not so much a climbdown but a canine's breakfast.

Let's be clear. There was only one way to climb down and that was to reverse the abolition of the 10p rate. That's the only way every single person could be guaranteed they would not lose out. This mish mash of electoral bribes fools no one.

Tinkering with the minimum wage will be paid for by employers. Increasing the winter fuel allowance will benefit many who pay no tax at all, at the cost of those who do.

Grant Thornton point out today that the abolition of the 10p rate was done to enable the government to reduce the basic rate of income tax from 22p to 20p. Grant Thornton's Francesca Lagerburg says: "You have to ask whether it is possible for the Chancellor to fully compensate every individual negatively affected by the abolition of the 10 rate? The answer is probably no, bevause with the money from the abolition of the 10 rate already spent, it will be difficult to find £7 billion from elsewhere in the Treasury's coffers to give back to low earners."

That's just simple common sense and simple maths. I wonder if the Chancellor gets it. It seems not. Stuart King must be proud of him.

25 comments:

In Like Flynn said...

Absolutely agree... there has been no dicussion about those who have retired on medical grounds under 60 and who are not able to claim Working Tax Credit.

dearieme said...

If he'd any political sense he'd reverse himself on the 10p band and claim that he's funding it by an extra, retropective income tax on all employees of any bank that uses the whizzo new bail-out device of the Bank of England - say an extra 35% on earnings above £200k. The sums wouldn't balance, but the 10p problem really only runs to the next budget and he could claim that the Big Swinging Dick tax runs for ever.

Cinnamon said...

This really stuffs the young people -- student loans, poor pay because tax credits and immigration are depressing the job market they used to frequent.

It also messes up the single disabled self-employed people who bother working for a living and don't quite manage the magic 30 hours a week.

In fact, remind me, why are people still bothering to get up in the morning when they end up with less money but more paperwork than the next dole bum for all their efforts?

Anonymous said...

Absolutely Ian. The Labour rebels know, they must know, that Gordon's U turn is anything but. It is also a tragedy that David Cameron gave it credence by describing it as a U Turn.

Gordon has got away with an absolute scam, thanks to one David Cameron and a bunch of Labour rebels. And many of this country's poorest are the cannon fodder caught up in between, where is their voice now?

mitch said...

How can it cost 7 billion to reinstate the 10p band but only 850 million to compensate everyone? Now I know gordon is useless with figures but eh?

Trumpeter Lanfried said...

Have you seen Brown's interview with Nick Robinson this evening? As usual he did his best to make a bad situation worse by telling porkies.

Man in a Shed said...

There's a freedom of information request waiting for someone to send it on the cost of the fudges, credit,and administration that will be required to bribe enough of the 5 million people Gordon Brown needs to placate to get his MPs of his back.

Weak, weak, weak ( as DC should have quoted in PMQs).

lola said...

'course Brown doesn't get it. It's because he's a dope. Intellectually autistic. All he can do is tax and spend and everything he reckons he's done has failed. He is a clown. But no-ones laughing because it's a tragic comedy.

Anonymous said...

Brown has done it again hasn't he?

Announcing a a Headline budget at the last minute, full of smoke and mirrors and forcing the opposition into a Kneejerk reply.

David Cameron and I also "HOPE" the Labour rebels will expose brown's latest slight of hand for what it is.

Surely WE all should have known that Brown has previous form in this area and the Devil is in the detail?

I am Very disapointed at Dave falling for it though.

Adrian Yalland said...

it's a typical Brownite solution. Rather than simply reversing and not taking so much from the pay packet, he takes the money first (well, it is his afterall), then, after means testing it, gives some of it back.

But how, we don't know.

"Every morning I wake up, and as Prime Minister think, what can I meddle with today"!

javelin said...

The reduction to 20p was nothing other than Gordon Brown trying to bribe marginal voters.

The current batch of losers are only being paid because Gordon is protecting his skin from MPs.

Gordon only acts to preserve his own skin.

Just a thought : but what percentage of these lowly paid people are immigrants who started work in the past few years and can't vote anyway?

That explains why he was happy to hang them out to dry.

john kay fan said...

How can it cost 7 billion to reinstate the 10p band but only 850 million to compensate everyone? Now I know gordon is useless with figures but eh?

Is not such a no-brainer. Only the low paid are being 'ompensated'.

The reason restoring the lower tax band would be so expensive is that the measure would give more than £200 to 90 per cent of taxpayers – to all of them, in fact, except the lowest-paid.

Chris Paul said...

WhatareyouonabahtDale? Nothing is unravelling. And Tories have no high ground on this one. Against the 10p rate, manifestoed to remove it in fact, abstained on removal ... and now suddenly all for it.

The IFS don't propose that the 10p rate be restored as remotely sensible. In fact the only way to unravel it would be to unravel everythings else that went with it.

JustlazybollocksnonsenseDale.

Chris Paul said...

PS well said John Kay fan. there is no need whatsoever to compensate the rich who have lost a smidge from the 10% removal when they have gained so much from the 2% removal elsewhere.

Gordon is very interested in kids and elders. This has I think caused him to try a rejig that affected childless young and almost old but generally benefitted those with kids. Up to £4000 a year in some cases says a tired and browned off with GOO Yvette Cooper-Balls on NN.

But Tories preaching on this? Please ... don't ... make me ... barf like a DPM ...

dougal said...

Please do explain, Mr Paul, why the lowest-paid are taxed at all? Explain why it wouldn't be simpler to raise personal allowances?

It couldn't be something to do with expanding the client state and buying votes, could it?

john kay fan said...

dougal,

incidentally, that was what john kay said

Ten years ago, Mr Brown, as chancellor, set that rate for the first £1,500 of income. He should instead have raised the personal allowance by £800.

Anonymous said...

Is that funny little man Chris Paul still blogging? I thought he was still detained in a secure facility for those that are, well, "challenged" is the politest way of saying it.

I don't know about the rest of you but I can't understand a word he says. GOO?

The last time he was let out on weekend leave he was seen with a toilet chain around his neck auditioning for a job as a Butlins' red coat.

Bill Quango MP said...

Chris Paul said...Gordon is very interested in kids..

Yes, i've heard that about him.

Alex said...

If I was Francesca Lagerburg's boss, I'd sack her. Her knowledge of the taxation system is evidently abominal.

It won't cost £7/8bn to assist those who lost out as a result of the package of tax measures in the 2007 budget, for the simple reason that the vast majority of individuals are better off either due to tax credits, or due to the reduction in the basic rate.

That leaves a group which do not earn enough to be of net benefit after the changes in the tax bands, and who do not qualify for tax benefits to the value of their loss.

This group of people cannot account for all of the increased revenue from removing the 10% starting rate.

In any event, Iain, I disagree with your views on the 10p tax rate. Marginal taxation is a very blunt instrument to tackle income inequalities - something I've written about elsewhere.

The Nameless One said...

Quite. Any allowances for those affected will be paid for somehow. But with the same complete disregard for basic accounting that he displayed as Chancellor, Brown won't acknowledge this. And there will be another black hole in the accounts, until Brown finds someone else to shaft with extra taxes.

Roger Thornhill said...

I don't think for a moment this was done to reduce the 20p tax rate. That was done as a diversion and to give the impression it was revenue neutral.

The real issue is about entrenching vote buying, commonly known as Tax Credits. The more people under it, the more beholden to the State. It is an obscenity and, frankly, should be illegal.

You cannot bribe someone with their own money, which is why tax cuts are never bribes even if the disingenuous inverters say it 1,000 times. But you sure can bribe people if you hand over Tax Credits, for they are not universal. If Brown genuinely wanted to help, he should have made the 10p band 0p, i.e. raised the personal allowance to £7,mumble and paid for it by reducing the need for so many Tax Credits, seeing as those people were paying less tax. The reverse happened. Vote buying is entrenched.

The problem we now face is that vote buying becomes a presumption. It evolves from vote buying to an implicit permission to even stand for office. Buying becomes as good as mandatory. It becomes a lottery ticket that political parties must buy in the great game that is the gamble for power. Without that ticket in your hot little hand, forget even running for office.

It will result in Mob Rule and cast talented and innovative people into indentured servitude.

We are almost there now.

simon said...

Well, Gordon brown has just 'devalued' the currency, people's pay, standard of living, and now the 'benefits' of a university education. being a 'doctor of' does not equate common sense or intelligence.

Anonymous said...

On last night's Newsnight Danny Fink made the only sensible (and funny!) comment I've ever heard from him: 'Gordon Brown introduced the 10p rate. Now he is going around blaming everyone else for not seeing what a crap policy it was.'

TaxCutter said...

Maybe a little fisking on Stuart King is in order. According to his website he is both the son of a taxi driver and a binman. So did he win a scholarship to public shcool then, strangely not mentioned on his site. Nor his Nottingham University stint

beachhutman in Beijing said...

But why would he - sorry, IT (darling with a big clunking fist up him, working his mouth). Brown hates the poor and the hard working. This lot are simply bastards, they will NOT take ANY steps to compensate the losers. See if I'm not right.hostdwyn