Wednesday, 24 September 2008

10p tax rate. Why is Gordon really sorry?

Listening to Gordon Brown’s speech at the Labour Conference yesterday, an uninformed visitor to our country might have been tempted to conclude that the reason the British people are turning against the Prime Minister is because he is ‘too serious’, or merely because we are a nation of curmudgeons who have become heartily sick of his ceaseless attempts to instil ‘fairness’ in the United Kingdom.

If only this were so, the country would be functioning perfectly under Labour’s tutelage and the only factors which might possibly animate a desire to oust the government would be boredom and self-interest. I’m afraid that this is resoundingly not the case. There are concrete reasons for Labour’s difficulties at the polls. People are genuinely angry with the government.

Having examined Labour’s erosion of civil liberties yesterday and visited its assault on the country’s constitution on numerous occasions, let's for a minute look at the issue of the 10p tax rate. A Labour policy which Brown ascribes to mistake and which he likes to claim has caused him a deal of hurt. What can the Prime Minister possibly mean when he claims that abolishing the lower tax rate was a ‘mistake’? Is he genuine when he says "it really hurt that people felt I was not on the side of people on middle and modest incomes"?

Is Gordon Brown, whose last budget as Chancellor contained the measures to abolish 10p tax, seriously telling us that he did not realise this would be disadvantageous to those on lower incomes? Does he expect us to believe that no-one within the treasury had worked out how people’s tax computations would change? That is simply beyond any thinking person’s credulity.

What the Prime Minister regrets, is that, when he attempted to screw money from the poor, the perception was not that he was helping those with ‘middle and modest incomes’. His ‘mistake’ lay, not in taking money from the lowest earners, but in neglecting to benefit enough in the middle bracket that this fact could safely be ignored. His ‘mistake’ was failing to appreciate how many people would be uncomfortable watching the poorest people pay more in order to allow middle and high earners pay less. His ‘mistake’ was that he did not get away with it, that his sophistry was insufficient. That ‘mistake’ he pledges not to repeat again, but that 'mistake' had nothing to do with fairness.

Of course, Brown’s apologies not withstanding, 10p tax is not coming back under this government. Alistair Darling may be returning £120 to tax payers this year, but there remains a £90 shortfall for those on rock bottom wages. Whether Labour continues to fund a curtailment exercise from the public purse for a couple of years or not, the damage has been done.

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