Was there really a U-turn on tax?

I give you, the Morning Star’s editorial:

A squalid little retreat
(Wednesday 23 April 2008)

THERE will be some Labour Members of Parliament congratulating themselves on Thursday over their great victory in challenging the government and winning concessions on aid for those hit by the abolition of the 10p tax rate.

And there will be ministers congratulating themselves on averting a damaging collision with MPs in the house which they could not have won and which would have materially damaged their party’s election prospects.

Both of those self-congratulatory groups will be 100 per cent wrong. And both of them have done themselves and their party no good at all.

For what has really happened in Parliament?

The government has climbed down and accepted that it has to do something to remedy a cock-up that it shouldn’t have perpetrated in the first place.

And Frank Field MP has withdrawn his amendment on the flimsiest of promises of totally inadequate measures to reimburse victims of the government’s incompetence months late and not even all of them at that.

Mr Brown in Parliament and Mr Darling, in a letter to the rebels, mentioned adjustments in the minimum wage to offset the harm done to low-paid young people.

But it is highly unlikely that they will abolish the discriminatory lower level of minimum wages that his government now supports at big business’s insistence and which has done even more harm to young people than his latest error with the 10p rate.

And, should he do so, that would still only help those working on the absolute minimum wage, doing nothing to help young people even slightly above it, but still below the £18,000 benchmark.

He has also mentioned using winter fuel payments to help those of the elderly who have been affected.

Quite how any supplement to this payment will be made to exclusively aid those hit by the 10p cut is not made clear but, if it was used, it would have to involve some kind of means-testing to this hitherto across-the-board benefit.

As for changes to tax credits, this hideously complex system already suffers from up to £1.2 billion lack of take-up due to means-testing, so in what way that will benefit the poorest is beyond the wit of man to imagine.

And any changes are to wait until the autumn anyway, leaving the poorest people in the country short of a significant element in their income for months on end, while the fuel supplement isn’t paid until nearly Christmas – and that is a one-off payment only, which still leaves unasked the question of compensation in further years.

As far as ministers rejoicing over having avoided a damaging confrontation in Parliament, with all the electoral problems that this implies, don’t they realise that the damage has been done already?

The initial arrogant refusal to even consider that they had been wrong has done damage that cannot be repaired and the fact that it took the threat of a parliamentary defeat to force even these insubstantial half-promises out of them can have been missed by nobody.

In short, the changes are an ephemereal, quite probably unworkable and unprincipled bodge.

Mr Field has done the poor no favours in his precipitate withdrawal of his amendment and has failed to have the courage to tough it out in the face of pressure from the whips.

All in all, a squalid little performance from a party which is rapidly losing all credibility with the voters, and with good reason.

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