Alistair Darling promised all low paid workers £120 each this afternoon - apart from the 1.1 million who they won't be able to trace, of course. The cost of his patch up is a massive £2.7 billion, which presumably will all be on the 'never never'.
I seem to recall that Barbara Castle promised to build a bridge over the Humber during a Hull by election campaign in the late 1960s. That pales into insignificance beside this. The trouble is that it has already been discounted by the people it affects. It's a bit like the 75p pension rise issue. The situation was irretrievable after the original announcement was made.
PS Don't I remember Alistair Darling saying his review of the 10 tax decision will last "as long as it takes" and "we won't play politics with this"? Just asking.
And Frank Field's been taken in yet again!
I guess it depends on if you think having the new aircraft carriers assembled in Gordon Browns back yard counts also.
Or even the West Coast rail upgrade ( which completely fails on any economic analysis ).
Lets not forget the millions to Rover before 2005's election.. so it would close after people had voted.
It is a shameful and shameless attempt at voting manipulation.
If the claims that details were announced in a by-election leaflet ahead of the statement to the house are proved to be true - then there should be a major investigation and proper action taken.
I hope and pray that the voters in Crewe and Nantwich see this for what it is. If I were Tamsin Dunwoody, I would not want to be elected on these terms - I would be too ashamed to take up my seat.
This is a rare opportunity to see whether tax cuts (unfunded and without any corresponding reductions in public expenditure) really do pull in votes.
I suppose at least Brown and Darling can say 'we have been listening', so I suspect that many Labour supporters will see this as positive. But many others will see it as a cynical bribe - which it need not have been, if they had waited until after Crewe and Nantwich.
Overall, I would say a miscalculation on their part, given the timing.
I agree, Iain - perhaps the SFO should start looking into this! But more seriously don't the "purdah" conventions affect bye-elections as well as general and local elections? Not that the lily-livered Electoral Commission would ever do anything about it I guess.
It will be interesting to see how David Cameron tackles this and the other government woes at PMQs tomorrow.
The key thing, as you point out, Iain, is how it's been paid for: £2.7bn, and all of it now heaped onto the already massive debt pile - a pile that will need to be repaid, with interest.
(I never knew that about the Humber Bridge)
Guido pointed out that this tax cut is unfunded. So no-longer will NuLabour be able to point at the Tories and wag a finger at their tax or spending proposals claiming them to be 'Unfunded'.
In one fell swoop Darling has wrecked the 'standard' NuLabour Mantra - what a silly-billy!!!
Bet Bean will be non too pleased when he realises.
Frank Field just lost his stature as a source of independent thought and opinion.
As Levy said, Labour's got nobody to replace Bean.
Not as much a bribe as an apology, Iain. And whatever the result in Crewe, the best thing about Alistair's statement was watching the glee on the Tories' faces opposite us slowly turn to gloom. I notice you didn't comment on George Osborne's abysmal performance today. Don't blame you.
the good folk of Hull & the East Riding are still paying for the Bridge.
Tom, whether it is a bribe or an apology, it is unfunded. You can now never throw that line at the Tories ever again. As for George Osborne, I didn't see his speech.
See you tomorrow on College Green!
Iain - I'm a tax lawyer and my back-of-the envelope sums suggest Darling has got it wrong and has probably misled the House. Higher rate tax payers will, in fact, be £120 better off too. Decreasing the higher rate threshold by £600 may at first blush seem to prevent this, but he's ignoring the fact that a higher rate payer's taxable income will now be £600 less to begin with. Shocking that nobody at the Treasury or HM Revenue & Customs bothered to check before the announcement was made.
Another Tory policy stolen then !
Can't see why you are dissing it Iain ?
We were told only last month that the 10% lower rate band was abolished because 85% of the benefit went to those paying tax at rates above the lower rate.
Now at the cost of 2.7 billion, this government has ensured that those earning up to £45,000 a year are £120 better off, whilst leaving 1.2 million low paid still £120 a year worse off!
...and what a good day to bury bad news, it has knocked the 3.0% inflation figure off the front page.
Of course that is CPI, RPI is officially recorded at a much higher level. It is worth noting that in the last 2 years RPI has hardly ever been lower than the highest figure seen during the 92-97 Conservative Government.
Well done, Mr Darling
£700 million = cost to taxpayers of abolishing 10% rate
£2,700 million = cost of extra tax allowance, to compensate for abolition of 10% tax rate
The Gainers are Millions of Folk who were NOT losers from the 10% abolition
Many who are POOR are still losing out
Still, it's cheaper than Northern Rock
Iain - "You can now never throw that line at the Tories ever again."
Are you willing to bet on that?
An apology for what? Your beloved leader has said time and time again that nobody would lose out, and now he has to apologise to them. You can't spin it both ways. I thought you lot were supposed to be intelligent.
And Osborne was fine considering Darling didn't even give him the courtesy of an advanced copy.
Finally, you lot can now shut up about hypothetical unfunded tax cuts, considering Darling has just made a real one.
Iain - "You can now never throw that line at the Tories ever again."
Are you willing to take a bet on that?
As a proud Hullensian, may I note that the Humber Bridge is a very attractive construction, whose first sighting on the A63 heading east means one is very nearly home. Indeed, it is great to look at, has sturdy foundations and serves a useful purpose.
Its contrast with the Labour government could scarcely be more stark.
Desperate bribery from NuLab after an almighty (ongoing) series of cock-ups.
They must truly be terrified.
Can we have a vote of no confidence now? Please?
The Labour majority is only seven thousand, you know. This is not a safe seat. It just had the same MP for a long time. Not the same thing at all.
Looking at the BBC's comment boards about 95% of the reaction has been negative if not downright hostile!
Come on Crewe and Nantwich! Do your duty and kick them hard in the *****!
It's amazing how money just seems to appear when I'm in trouble, isn't it? The fates must love me.
I agree with you - he should have reduced the 40% threshold by £1,200 not 600 to make it neutral for HR taxpayers.
This is from www.conservativehome.com
"The great Eric Pickles has just called from Crewe. He was out canvassing and the Darling announcement had already reached peoples' ears. Crewe's verdict: "overwhelmingly negative".
The good people of Crewe and Nantwich are not fooled by the bribe and the stupid Labour MP.s who were cheering today will be back in the doldrums when they get whupped at the by election next Thursday.
As for your crawling to the Dear Leader today Mr. Field it only shows your credibility has been busted, because you have swallowed a bribe today, and one that only lasts for one year. Frankly I,m glad you haven,t joined the conservatives, there is no room for losers.
BTW enjoyed the b********g Darling got from the Speaker Gorbals Mick for sending the budget statement to the press room and not the Voting office.
I,m also looking forward to Paxman roasting whichever Nulab spokesperson comes on Newsnight tonight.
If Nulab and Bottler think this bribe will help make them popular again they are seriously deluded.
John F Aberdeen
Brown wouldn't find £50 million to honour the police pay award, yet £2.7 billion can be found to save his job.
could have paid off the debt for that bridge whilst they were at it!
This decision was effectively dictated by Frank Field. His threat to vote against the budget, even on a motion of confidence, unless Darling remedied this cock up was clearly taken seriously.
Good to see that Nick Robinson on BBC1 tonight had dropped the 'Tories wrong-footed' line which was really a non-starter.
Tom Harris MP said...
"I notice you didn't comment on George Osborne's abysmal performance today. Don't blame you."
I think the right honorable gentleman should try scribbling frantically the finer points of a new budget (for this is what today's announcement was) while coming up with an appropriate response (no advance notice was given of this emergency statement). All the while I'm sure Osbourne was fully aware of the duplicitous nature of many other budgets. I think he did a very good job under the circumstances.
The current debt on the Humber Bridge is £400 million and so this is the biggest by-election bribe in history.
I think paralells can be drawn between this bribe and the by-election bribe of Barbara Castle. The lesson that should be taken is that by-election bribes of this sort need paying for. Here in East Yorkshire and North Lincs we are still paying the 1960s by-election bribe - £2.70 each way across the bridge and a debt of hundreds of millions of pounds for which local ratepayers are responsible! Will the country pay for this bribe well into the future???
Good for John Snow on Channel 4 News. He really went for Darling and Frank Field.
Field has blown it now as Mr Integrity. His feeble U turn in the Commons and grovelling apology to Brown was nauseating.
"PS Don't I remember Alistair Darling saying his review of the 10 tax decision will last "as long as it takes" and "we won't play politics with this"? Just asking"
Yes Iain. It just goes to show how little regard this administration has for the public. If Crewe & Nantwich had been due last Thursday, you can be sure that old Snowy would have announced this con already.
If it is connected to the by-election then I suppose we could call it a Crewe cut. (You see what I did there?)
Tom Harris MP said...
Not as much a bribe as an apology, Iain.
Rubbish, do your sums, Tom Harris - if you know how, that is.
Anyone earning slightly more than £1200 over the old basic allowance will still be worse off than with the 10% band.
As I've said on another section of Iain's Diary, someone with a salary of, say £7,435 PA would have paid £200 tax prior to Broon and Darling's latest snatch and grab.
Yet now, with the new "enhanced" basic allowance" of £6035, on a salary of £7,435 PA they will pay £280 income tax.
Brown has too much form for this, once again Mr smoke and mirrors who, when chancellor, even lied to his Prime |Minister to set up just what we have here, yet another nice little earner for himself and his nulab pals.
Brown is impoverishing the poorest once again. How can you be proud of that?
I don't believe for one moment he'll borrow £2.7 billion either, because he's snatching too much back from the poor to need it. And if Brown does borrow that sum, part of this will be to fund other expenditure like multi-millionaire MPs' 25% pay and pension rises.
Simon Allum and Neil Reddin,
I think there is some confusion about terminology here and you may be a victim of your training.
He's put the personal allowance up by 600 and reduced the "threshold at which an individual starts to pay tax at the higher rate" by £600 - this isn't the basic rate band but the addition of the personal allowance and the basic rate band. So the basic rate band will be reduced by £600 from the increase in the personal allowance and by the £600 he announced. The effect of that is to deliver what the statement says in paragraph 25 http://www.hm-treasury.gov.uk/newsroom_and_speeches/speeches/statement/Speech_statement_130508.cfm
was watching the glee on the Tories' faces opposite us slowly turn to gloom
Perhaps they were gloomy because they had not realised that Brown was a reptile capable of mortgaging every soul in the country just to save his stupid failed government for another week.
As a new low in Politics it makes me pretty gloomy but I do not believe the coutnry can be fooled by this charlatan.
I think he did a very good job under the circumstances.
Indeed ,and he faced problems not encountered by the Press who were handed the full details with plenty of time. As I say a new low from a desperate and dangerously dearnaged man.
The bribe to which you refer Iain was made by Barbara Castle, then Minister of Transport, at an election meeting for the Hull North By-election on 17th January 1966. Ten days later Labour held the seat with a greatly increased majority of 5000+
At least then they had the excuse that the future of the Government depended on the result as they had a majority of only 2 over all over parties, having lost Leyton to the Conservatives the previous January.
I shall be interested to see the impact on the £ when the markets open this morning. A panic emergency budget taken for very short-term and probably unsuccessful reasons will have serious longer term impact both on the government's finacial room for manouvere and their political standing with investors.
I'm not surprised by this- Labour have been an absolute disgrace for quite a few years now. I expect the announcement will please the scu..Labour backbench MP's but in reality people are being clobbered by rising bills/prices/taxes so i expect this will sink like a lead balloon.
If this had been presented with the original cock-up budget, all he has done is to increase the national debt in order to cut the taxes of the richest.
England cannot afford a McLabour government.
Anonymous at 10:02PM
I still believe that higher rate payers are £120 better off.
Crunching the numbers, somone on £50,000 would (until yesterday) have been paying £10,626 in income tax this year. It will now be £10,506.
Neil Reddin is quite right, and I suspect that once Darling realises he's got it wrong, he'll quietly change his own proposal by having the £600 drop in the higher rate threshold increased to a £1,200 drop. The Finance Bill Committee is sitting at the moment, so the change will probably go through that. The interesting thing will be whether he does manage to do it quietly, or whether he's further embarrassed by the media realising that he and his department can't do their sums.
And a heartfelt apology from Frank Field for getting personal.
Does this mean he now thinks Gordon Brown will be leader at the next GE?
What a masterstroke, at the weekend Brown was tarnished, out-of-touch and bullying. He was an outright electoral liability. Now the same people hail their gleaming Beloved Leader.
What a difference a couple of days can make. Have the party whips been waterboarding the rebels? Did a whizzing mobile catch Field in the solar plexus?
Funny bunch, these Westminster folk. Iain, I worry for you. This Gadarene mentality could be contageous.
"I still believe that higher rate payers are £120 better off."
and I still maintain that the "threshold at which an individual starts to pay tax at the higher rate" and the basic rate band are two different things.
Something which has been confirmed this morning on HMRC's website
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