What I wrote at Lib Dem Voice

March 21, 2007

Labour, party of social justice: RIP

Talk about a double whammy.

First, Labour’s Lyons Review flunks the prospect of wholesale reform of Council Tax, instead opting to tinker round the edges with bands that will make no difference to the vast majority of income-poor residents who suffer under the current system.

Then, Gordon Brown decides to double the starting rate of income tax, ensuring anyone who earns under £15,000 pa will be worse off. As Will Howells notes, this is some U-turn from the Chancellor who once proclaimed the importance of the 10p rate for the poorest in our society.

Badly done, Gordon, badly done.


Praguetory said...

Fair comment. I made the break-even point closer to £18k.

donpaskini said...

I'm not convinced about either of these points (and I usually disagree with the government at least as much as Stephen does :)

The Lyons Review, to the best of my knowledge, suggested introducing new bands and other forms of tax which councils can levy, such that councils can, if they choose, reduce the amount that low income taxpayers pay without any reduction in overall revenue. Whether or not councils take up this opportunity is up to them, but that's localism, right?

Secondly, the net effect of the budget is that most people earning £15k or less are better off - through tax credits, child benefit, changes in thresholds for pensioners (single working age people do less well, but they are a relatively small proportion of low earners). Surely if we're doing sensible analysis rather than point scoring, it is only right to look at the total net effect of the budget, rather than individual measures?

Take care

Dan xxx

Stephen Tall said...

Dan - re Council Tax: if that's NuLab's idea of localism it explains a lot!

re the Budget: a married couple with a child where the working spouse earns £9,000 will lose out by £192, even after tax credits are taken into consideration. But a worker earning £45,000 will be £354 better off.

Social justice...?

Nathaniel Tapley said...

Agreed. It was a budget that robbed the poor to pay for a fighting chance in May.

In the press, the budget had been represented as the one where income tax came down by 2%. Which it didn't for Britain's poorest working families. It went up by 10% to pay for a reduction in the tax paid by corporations.

However, Stephen, as a 'liberal' surely you approve of moving the burden of taxation from taxes people have to pay (income tax) to ones they can choose to pay (4x4s, cigarettes, lovely, lovely booze)?