Tax cuts for big business, hikes for working poor

Gordon Bliar is sorry, was facing another revolt from Labour MPs…

Post offices, housing, now then taxation.

New Labour’s tax plans: a 2% cut in corporation tax and a doubling of the rate of tax paid by the poorest workers!

John “Labour is the natural party of business” Hutton has defended the cut:

Business Secretary John Hutton has ruled out a rethink on the decision to scrap the lowest tax band, amid claims Labour has abandoned low-paid workers.

He said he did not think it possible to go back on a decision to scrap the 10p rate, despite Labour MPs’ unhappiness.

The Morning Star‘s editorial commented on the revolt that wasn’t:

Pledges that melt away
IT is to be hoped that Labour MP Greg Pope is kicking himself today for believing the assurances made to him by Prime Minister Gordon Brown and various senior ministers that they would review the impact of the abolition of the 10p basic income tax rate and its effect on the poor.

The gullible Mr Pope withdrew his motion opposing the abolition, which had been signed by over 40 MPs, in the light of those assurances.

But no sooner had Mr Pope withdrawn the motion than reactionary Business Secretary John Hutton leaped onto the airwaves to rule out any rethink of the government’s decision, claiming that it was not possible to go back on the change that was announced by Mr Brown last year in his final Budget as Chancellor.

So much for promises from new Labour ministers. Clearly they are not worth the paper they weren’t written on.

But what adds insult to injury is the vacuous nonsense that Mr Hutton spouted to justify his government’s inflexibility.

Claiming that the tax change had been part of a “balanced package” which cut the main rate of income tax by 2p to 20p, and which left families with children “significantly better off,” he continued by saying that, for those who did lose out, the scale of the losses was relatively small.

“We are talking in the worst case scenario about half a per cent of net income being the scale of the maximum loss that someone might have,” he said.

It takes little imagination to trash such a blatantly untrue statement.

Mr Pope pointed out that people with low incomes between £5,000 and £15,000 a year will pay up to £152 more tax and pensioners particularly could be hard hit.

Well, if £152 is half of 1 per cent, then the old or low paid would appear to be trousering around £30,000 a year, if Mr Hutton’s statement had any truth in it.

So Mr Hutton is, quite simply, a liar.

And his political master Mr Brown is revealed as a manipulative deceiver who will promise anything to quell dissent in Labour’s ranks, with his cronies not even waiting a week before they shamelessly renege on his pledges of a review.

The new tax rates took effect on Sunday and the biggest beneficiaries will be people earning £35,000 a year, who will be £377 a year better off, those on £30,000, who will see a £292 increase in their take-home pay, and people earning more than £45,000, who will also be paying £292 less tax a year.

But, down at the bottom of the heap, people earning between £5,931 and £15,075 will be up to £152.40 a year worse off.

However, we can console ourselves that those poor devils of struggling higher-rate taxpayers with short-term investments will see the rate at which they pay tax on those investments fall from 40 per cent to 18 per cent.

Quite possibly the only truth ever uttered by the new Labour clique was when they proclaimed themselves as the natural party of business.

For the rest of us, its a question of devil take the hindmost and, for new Labour, hindmost clearly means poorest.

Those 43 MPs whose signatures appeared on Mr Pope’s motion will have their work cut out to fight for the reinstatement of the 10p rate.

But fight they must if the gap between rich and poor is not to be widened yet again by this monstrously ineffective Labour government.


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