Tories put abolition of 10p band at heart of May elections campaign

The above image appears in today's Sun - accompanying an article by Trevor Kavanagh entitled PM hits hard-up Labour voters hardest.

From today's David Cameron press conference it's clear that the Conservatives are determined to hit Labour councillors again and again with the issue in the run up to 1st May.  A leaflet (a pdf of which is here) will be distributed throughout the country over the next few weeks detailing the impact on low income households.  The leaflet is great - it's just a pity it can't include the Sun graphic!

At this morning's press conference David Cameron promised to try and get the Government to think again about the 10p band.  He said there would be parliamentary opportunities at the end of the month to force the Government to change policy.

Question after question from the press pack focused on what the Conservatives would propose to pay for the restoration of the 10p band or for other measures that would protect lower-paid workers.  David Cameron repeatedly refused to answer this saying that it was for the Government to correct its error.  Channel Five's Andy Bell was surely right, however, when he said that a Commons defeat of Labour was more likely if the Tories propose a realistic alternative.

Related link: David Cameron promises to investigate why MEP selection data on turnout and spoilt ballot papers isn't being published

Comments

[Jake]

The Conservatives have the luxury of Opposition on this one. As such,they are under no obligation to propose an alternative to the tax
( altho. they could if it were tactically useful)
It is for the government to defend the situation and explain what they are doing and why.(They initiated the fiasco. It is their pidgeon)

and the Opposition to oppose.

Disraeli saw this clearly.

[John F Aberdeen]

The campaing against the abolition of the 10p tax band has rightly been started by the smart work from CCHQ when they set out all those low paid workers on less money, although no mention of this on BBC or Sky news.
Andy Bell is right that DC must come up with an alternative and surely that alternative has to be upgrading the personal allowance, which Brown has frozen over the past 11 years.
I can see no reason why it can,t go up to £15,000/ year after taking a big knife to the many useless quangoes ( up by £2 billion this year) and the reported £1.3 TRILLION spent on useless consultants. (see Neil Glass in todays daily telegraph)
This would take a large number of people out of paying tax. Its tue that those just over £15,000 would start paying tax however a person on £18,000 plus would only be paying tax on £18,000 plus - £15,000 which means they would be much better off than they are today.

BTW checkout http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id=557660&in_page_id=1770

These are a selection of old Conservative Party posters in todays Daily Mail and although from the early 1900,s could just as easily be used today.
The first one of Britannia being strangled by a devellish looking beast standing on the Union Jack coudly apply today with Bottler being the devillish beast selling us out to Europe and removing Britannia from our coins
In another poster a house being surrounded by government inspectors could also apply today, with cameras in our bins, HIPS, CCTV, ID cards etc is also an accurate reflection of Britain under Socialism today.

[Alan S]

Great Sun cartoon. The party should purchase it!

[Sammy Finn]

You are wrong in this case Jake.
The Conservatives have a responsibility to oppose but also to win parliamentary votes if they can.
My solution is to pay for a much higher starting tax threshold paid for by a freeze in public sector recruitment.

[RobD]

If opposition to this becomes a manifesto pledge we should have to explain how we would fund it. Until then it is only right that we should highlight this most disgusting of Brown's stealth taxes - he has got away with far too many in the past.

[Sceptic]

I thought that the party's policy was to not to promise unfunded tax cuts. So what can green or other taxes will be levied to pay for this sudden and Damascene conversion? I would prefer, in addition, a firm commitment to cut Brown's wild spending and cut the overall burden of taxation at the earliest opportunity.

[Stewart Geddes]

Some of us have been arguing for an increase in the personal allowance for ages. It is crazy that someone on the minimum wage pays tax. Changing the allowances will allow us to simplify the tax system, reduce costs by removing the need for so many civil servants and benefit the poorest who will pay no tax at all.

George, are you listening?

[Yet Another Anon]

An extension of VAT onto Food & Childrens Clothing and Footwear and abolishing payments of National Insurance Contributions for people on benefits could go towards funding any reverse - I think reintroducing a 10p rate is probably a non-starter, but perhaps raising the threshold so that those who would otherwise would have been on it would be no worse off would be one way to do it and perhaps further cuts in Basic Rate Income Tax.

[Iain]

"George, are you listening?"

The Conservatives belated response to this issue has probably been compromised by Osborne's weak leadership of the Shadow Treasury team, which has failed to take the attack to Gordon Brown and Labour on the economy and failed to lay out any ideological frame work for their approach on the economy, taxation, and what they want to achieve, with the result this all looks like a bit of bandwagon jumping.

[Richard Calhoun]

Delighted to see 'tax ' back on the agenda and endorse fully the proposal to exclude people under £15000 p.a. to be taken out of tax.

Only when Cameron embraces this policy will he persuade those who benefit most from it to get out and vote for the Tories

[Lee Chamberlain]

Fully agree with Stewart Geddes point, the tax system is obscenely over complex. Labour claim that some low paid workers will be compensated for the loss via tax credits! What an utterly pointless and administratively expensive extercise, but then its all just about screening another tax hike, so what else should we expect.

In regard of any tax cut committments, if you want to help Labour go ahead. IF these are made, they should only be made just before the election, not sooner. Otherwise you give give the Labour spin machine something to work with. Labour want to change the subject and they REALLY don't want us talking about what they are doing to the British tax payer.

People know we stand for low taxes, they just need reminding that we also stand for good value and good services too.

[Sammy Finn]

If Cameron-Osborne hadn't boxed themselves into a corner of matching Labour on spending AND saying all tax cuts had to be prefunded we could afford to reverse this and make huge election inroads into the hard working classes.

Sigh.

[John]

Remember, we lost a Continent once because of taxation!

[a-tracy]

The way the Labour government uses incentives and then shortly afterwards withdraws them will be their downfall.

But get real, we can't afford tax free earnings of £15000 pa. Nearly 50% of employees in this Country earn less than £16,200 per annum and about 30% earn less than £12,500.

I don't know why the elderly chap is in the picture in the Sun, the over 65's did quite well out of the budget with their personal tax allowance raised from £7550 to £9030? When most of us middle-agers get to 65 we're being told we can't get our state pension until we're 68 and these tax allowances will have to be much reduced as the money will have run out. This must be what it feels like to be married to a gambler or a spendthrift.

[Barry Williams]

I would favour an increased personal allowance by £1,115 pa. That would negate the removal of the 10% band for the vast majority of people and provide an incentive for those part-timers who earn between £5435 and £6550 to do a few more hours a week.

There would clearly be a revenue cost to this but reducing taxes at a time of economic slowdown would help stimulate the economy and we all approve of that!!

[passing leftie]

These are the sames lies! Even the Times editorial admits that income tax has actually gone down for the lowest paid.

Editor, do you have absolutely no self-belief at all that you persist in publicising what you know to be pernicious nonsense? Don't you have something genuine to bash the government with? Do you actually think that these categories of people are worse off or not?

You've all seen the tax tables, you all know that people are better off, and in particular all the categories listed as worse off in this leaflet are better off.

[David Belchamber]

It is good to see so many commonsensical comments from Sceptic, Stewart Geddes, Richard Calhoun and Lee Chameberlain among others on this topic.

I believe the conservatives cannot be too specific at the moment because Brown is desperate now and will pinch any good idea that he can afford.

But I am sure that we must work from the bottom up and make a better society for the disadvantaged and the low paid, including pensioners. If we can promise do something for them to offset the pernicious effects of very high inflation, it will also benefit the better off but to a lesser degree.

What should the basic threshold now stand at, if it had been indexed since 1997?

We should do some exercises on the net cost to be found, if the initial personal tax threshold went up to £10,000 in the first instance (I doubt that we could go straight to £15K). As Lee Chamberlain points out there would be big savings to be made from the resultant reductions in tax credits.

The balance would come from cutting back on government wastage - not public services.

At the same time a simplification or at least a rationalisation of personal tax would also produce worthwhile savings.

However, I echo Iain's concern about our Treasury team being sufficiently on the ball to get a tight grip on the economy. When Brown made his budget announcement, it was noticeable that the Lib Dems (i.e. probably Vince Cable) soon seized on this point, whereas it took us time to react.

[Dan]

As a young person with a less than perfect knowledge of the tax system I have absolutely no idea whether this basic rate abolition will affect me.

I'm on £16,500 - reading about the basic 10p rate I assumed it only applied to people earning a couyple of thousand pounds over the tax free allowance (so an income of around (£8-9k per year).

Could anyone tell me whether this would therefore affect me, as I assume it wouldn't but all this talk of people earning upto £18,500 being affected is confusing.

Thanks

[David Belchamber]

Passing leftie, you are getting exasperating. I understand perfectly well what you are claiming but it is factually true that if you replace a 10p tax band by a 20p band, you have put tax up and that is what has happened.

The fact that this will be compensated for in most (not all) cases, is not the argument.

If you want to look for lies what about Brown's mantra that we have the lowest inflation, the lowest interest rates and the lowest unemployment etc.

He has even on two recent occasions at PMQs compared inflation rates now (using of course the CPI) with the tories at 10% - which it was for a space of a few months - which was based on the more usual RPI.

Was that ignorance or deliberate deception?

[David Belchamber]

PS I read in the paper that Labour's new slogan is "On Your Side". The irony of this, appearing as it does to coincide with "Tax-the-Poor" Day, will of course be lost on Mr Brown, who is unlikely to do irony.

It will not be lost on Dan at 15.10 and the other 5.3M people who lose out from the abolition of the 10p band (though Dan will be relieved to hear that it will not be too much).

[Politico]

I thought it was now common knowledge that New Labour was the party of the MIDDLE class?

22 down to 20 benefits the majority middle classes (coupled with tax credits etc....)

It does seem strange though, and targeting the poorer earners to prop up the coffers is not something i could ever do - but in the irony of ironies, it used to be labour that fought against taxes like these when the tories proposed them. (tories - middle, labour - working). How times have changed. It is an opportunity though......labour have left a valuable voting block ripe for the picking. Promise a return to status quo before the change and the election is ours.

[Malcolm Dunn]

'These are the sames lies'-Passing Leftie.Not even Labour MPs believe that Passing Leftie or why would so many of them be criticising these proposals?

[a-tracy]

Dan, Previously the first £2,230 in earnings above the personal allowance of £5,225 was taxed at 10p. Now everything above the personal allowance of £5435 up to £34,600 will be taxed at the standard rate which has been reduced from 22p to 20p.

So there are winners and losers, unfortunately, and amazingly for a party that proclaims to help the working class, the losers are the lowest earners without dependent children, or those with children that don't like to claim.

I calculated that the break even point was £16500 2007/8 2212.90 2008/9 2213.00) which is obviously why you asked about this amount, however, as I said earlier nearly 50% of employees earn less than this amount, so anyone that is feeling smug about this should be ashamed. No-one I knows wants to go cap in hand begging for tax back, laying out all their personal information and waiting months for a decision on whether they can have it or not. It stinks for those at the bottom Passing Leftie and you know it!

[Ted]

Reverse Robin Hood - robbing the poor to pay for the tax cuts for the Middle England middle income households.

Obviously the working poor no longer matter to New Labour - they have their eyes firmly set on the votes of Middle England.

"The working class can kiss my arse I've got the foremans job at last..."

[David]

Flat tax looks like a obvious solution, with a high starting point.

[Dan]

Thanks David and A-Tracy, not too impressed with this tax amendment or the recent budget in general - death knell for so many pubs without doing much to tackle binge drinking. Always sympathised with Labour as my dad was always a lifelong supporter but I certainly won't be voting for them at the next election.

[David Belchamber]

Today's Times' leader is a nice comment on the situation: "Mr Brown has engaged in the classic exercise of robbing Peter in order to pay Paul.....Except in this instance Peter was notably poorer than Paul to start with".

Dan, politics is vitally important for you and your generation, so if I were you, I would support a party that is prepared to tell the voters the truth.

Linked to the 10p argument is inflation; to me, inflation means "the rise in the cost of living", as simple as that.

Gordon Brown tells me that inflation is currently running at 2.5% or something like that. Paying council tax, buying food and petrol, paying for electricity and water, and having the odd glass of something refreshing, I would say that he either doesn't know what he is talking about - or he is trying to con us.

[passing leftie]

a-tracy, you clearly didn't look at the tables, or the examples I posted.

http://extras.timesonline.co.uk/pdfs/budget2008taxtables.pdf

Let's just take a couple shall we?

Single person with child earning £5000 is £446.40 better off.

Single person with no child earning 10000 is 365.40 better off.

Look up as many other examples as you want.

Still no one disputes the figures I notice, and there is as yet more rubbish about the CPI vs RPI figures.

[Robert Wright]

It would be silly to propose re-introducing the 10% rate; it would make more sense to raise the personal allowance by £2,000 and so restore a a more simple two-rate income tax rate structure

[comstock]

When Brown said he was abolishing the 10p band , I assumed it was going to zero. I was corrected quickly on here, was angry at the time and still am.

Frank Field has spoken out about this on the news today.

[David Belchamber]

Passing leftie, please explain your comment about the CPI v RPI.

To ordinary people, inflation means the rise in the cost of living. That includes the cost of food, housing, energy costs, council tax etc, everything we have to buy to live on. We are not interested in the fact that expensive one-off things like an Xbox has gone down 20% over a year, thus depressing the CPI.

Please explain how Gordon Brown can be considered honest when he (deliberately?) compares the CPI with the RPI.

How can he claim that unemployment is low when he excludes the figures for those who are NEETS?

Why doesn't Brown show some guts for a change and give us a factually correct statement about the economy, warts and all?

It is said that when an official at the Treasury told him what a good set of books the conservatives were handing over to him, he replied sourly: "What do you expect me to do; write them a thank you letter?".

[Jake]

This is a governemnt self imposed problem .
Also a very nice headline. Easy to understand and pertinent to just about all lower paid. Don't make it more complicated than it is. Just oppose and proffer no help at all to the govt. or the newspapers as to what a Tory administration might do as an alternative.

This a headline not a mass of detail.
Use it as such.

[a-tracy]

Passing Leftie, I believe the bands that are worse off are quite large groups of people, we'll soon see.

As I said in the other thread on this topic, this carries a proviso, you have to be 25 years of age and working at least 30 hours per week to obtain Tax Credits (I still want to know if your parents income is taken into account?)

Otherwise, take a young couple both earning £10,046 (35 hours @ NMW) living together they get zero tax credits and would pay an extra £129.18 each this tax year. (If they both earned £9000 pa each they would get zero tax credits and pay more tax!) Also what's the difference between a couple and three mates house sharing would they all get tax credits assessed independent of the people they share with?

On the other hand a boy or girl aged 25 living with his/her parents earning £10,046 seem to be able to currently get £1123.19 tax credit per annum using the HMRC website, I wonder how many people claimed this benefit last year?

However when said single boy or girl earns £13,000 the tax credits reduce to £0 so there is a banding where single people who earn between £13,000 and £16,500 are worse off.

The minute a couple's JOINT earnings go over £18,000 the tax credits stop.

The minute an eligible single person's income goes over £10,000 the tax credits begin to slide down and stop at £13,000.

The table in the Times didn't really seem to explain this, it appeared at first glance that those earning between £10 and £15,000 would be similarly better off but they aren't.

[a-tracy]

sorry that last line should say £10000 (not £10)

[a-tracy]

By the way, arguing about this is rather like fighting over the carrots, peas and roasters and who gets what, when we've all missed the fact there's no meat under the gravy and the Yorkshire puddings not been made.

David Belchamber's right, cooking the books won't help anyone long term.

[James Maskell]

The Conservatives oppose the abolition of the 10p band. What is their alternative to this? Are they pledging anything at all or is this just riding the Labour rebels for what they are worth?

Its easy to oppose, but the hard part is to come up with an alternate policy (which in this case is possible if only the Tories put their minds to it).

[passing leftie]

a-tracy
The table in the Times didn't really seem to explain this, it appeared at first glance that those earning between £10 and £15,000 would be similarly better off but they arent.

Much as I respect your views, I am going with KPMG's actuarial tables rather than whereever you pulled these figures from. The other newspapers all published similar tables with similar figures.

Abolishing the 10% rate was a political error because it looks bad, not because it does what you are saying.

David Belchamber | April 07, 2008 at 20:30

CPI is the internationally agreed measure of inflation. The RPI figure is also available from the ONS. As for the price of food, which is an issue for the world economy, what would David Cameron do about it? Introduce food subsidies? Price fixing? What? Cameron would stick with CPI if he got in.

And, the RPI and CPI figures show that since Labour got in, both interest rates and inflation have been low and steady, and employment figures have improved, certainly compared with the last Tory government.

As for employment; employment is higher than it has ever been. There are more jobs in the economy than ever. The redundancy rate is down.

http://www.statistics.gov.uk/CCI/nugget.asp?ID=12

As for economic inactivity (the point I think you are most concerned with) it has declined since 1997 when Labour got in.

http://www.statistics.gov.uk/cci/nugget.asp?id=699

Now, go over to the ONS, read the figures and imagine we had a Tory government. What would you be saying about them?

[Geoffrey G Brooking]

By far the best leaflet since Timetable for Action under Michael Howard in 2005.