Thursday, March 22, 2007

Labour's defence of Brown tax scam - hang on a minute

There's a neat little defence by Labour of Brown's 10p rate abolition scam in the Guardian:

Labour MPs acknowledged the cut was not a giveaway, because it required the abolition of the 10p rate. But they argued that it was a sensible simplification of the system. While Mr Brown introduced the starting rate in the first place, the subsequent creation of the working family tax credit had rendered it unnecessary.
Chris Bryant, MP for Rhondda, admitted: "It sounds like you are giving with one hand and taking it away with another [by axing the 10p rate] but I looked at what happens to someone on £8,000, £10,000 or £12,000 and they're all better off."

But hang on a minute. Nick Robinson notes:

Brown almost mumbled his announcement that he was going to remove the 10p starting rate so few realised that he'd announced, in effect, an £8.5bn pound tax rise. So some who cheered his £9bn tax cut felt deflated when they learnt what had really happened.

If Brown is getting £8.5bn from the 10p rate removal, to pay for his 22-20p cut, then where is that £8.5bn coming from? It has to come from the people who are currently subject to the 10p rate, for goodness sake. So all this mumbo-jumbo about family tax credit from Chris Bryant is absolute bovine scatology. Unless, of course, Brown is taking away from one lot of people and giving money back to same lot, in which case what on earth is the point?

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