Tuesday, May 13, 2008

The 10p Row Gets Worse

Never before have we witnessed such a mess as a Chancellor trying to get out of a political hole by carrying on digging. Yet today that is what we saw today from Chancellor Darling as he tried to put the 10p tax rate debate aside by putting up the tax allowance on the basic rate. This will cost £2.7 billion but ...

It is a one-off payment, a one-off solution to a problem created by Gordon Brown.

It is being paid for by borrowing! We'll end up paying this back one way or the other.

22 million better off, but only 4.2m of those were impacted in the first place and Darling still misses 1.1 million people!

It may have caused a humiliating backdown from Frank Field but it won't pass the opposition or the media test. The news is pretty damaging and the papers will say so. Darling will always have this U-Turn around his neck and the issue will become attached to Gordon Brown too.

Am I the only one who thought Darling should have started with an apology too? I also thought that both Osbourn and Cable did very well ... but they did both have an open goal, I suppose.

Poor old Darling; the unluckiest Chancellor attached to the unluckiest Prime Minister ever.


Anonymous said...

Is not the unluckiest Prime Minister the lovely Mrs T?

Anonymous said...

Mrs T made her own bad luck!

This really is humiliating for the Brown leadership - a total climbdown that will have to be paid for tomorrow.

From the beginning I have advocated raising the allowance in preference to rate cuts, indeed personally I would like to see the gradual replacement of the plethora of credits etc by a simple policy of taking the lower paid completely out of income tax. It would provide more incentives and would make for a more efficient (and cheaper) tax and benefit system.

Sometimes the key issue is not the decision a government makes but how it got there. When Major left the ERM it was the right policy - however, the humiliation of how they got to that position destroyed his credibility. Perhaps yesterday was Labours equivalent. So much for an iron chanceller!

Andreas Paterson said...

From where I'm standing it looks like a good move. It was a choice between making a U turn and and just looking obstinate. But as U turns go, I don't think it was a bad one, especially since the it was Labour MP's first and foremost who were calling for action about it.

Comrade, I agree to some degree about raising tax allowances, it certainly would have been the better option last budget. However, I think it's worth making the point that as far as distributing money to where it's most needed, tax credits are by far the more cost effective measure.

The Black Wednesday comparisons seem over the top to my mind.

Anonymous said...

I like how the tories in norwich distributed a leaflet arguing about the 10p tax but they aren't going to bring it back either.

Its almost as if it is political opportunism.