Labour MPs have finally woken up to the fact that the abolition of the 10% starting rate for income tax in the last budget under Chancellor Gordon Brown kicks the poorest people in the land. So, a group of them tabled a fairly strongly worded motion in the House of Commons criticising the government on the subject. This was then withdrawn following a promise to look at the matter. That promise has now been withdrawn, leaving Labour backbenchers looking like dupes and the government looking duplicitous. Now, the changes to the tax regime were quite complex; a mix of rates and thresholds, allowances, National Insurance and a dash of Tax Credits. A precise calculation of who is better or worse off depends on individual circumstances, but there is as emerging consensus that quite a few of the poorest will see their incomes decline. Worse than that the emphasis shifts from getting money through working to getting money as a state hand-out for many who will not actually be worse off, provided that they fill in those forms properly of course.
You can tell when the government knows it has got it wrong: when it starts rabbiting on about 'since 1997...' on any given subject. This is exactly what they are doing here, tacitly admitting that the current changes are a balls-up but claiming that taken together with their past actions things are still on the plus side. It seems that some Labour backbenchers at least are concerned that ordinary voters might not see it that way. How those same backbenchers feel right now, having been shafted right along with the low-paid can only be imagined.
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