22 April 2008

Taxing questions

Our long-term objective is a lower starting rate of income tax of ten pence in the pound. Reducing the high marginal rates at the bottom end of the earning scale - often 70 or 80 per cent - is not only fair but desirable to encourage employment.

This goal will benefit the many, not the few.

That was the 1997 Labour Party Manifesto. Therefore:

Is reducing (or, after almost a decade, restricting) the marginal rates at the bottom end of the earning scale no longer fair?

Is it no longer desirable?

Does the Labour Government no longer wish to encourage employment, or is it saying that the 10p tax rate did not encourage employment? If the latter, is it saying that a major policy didn't have the effect they wanted, and was a failure?

Did the goal benefit the many? If not, what happened? If so, why does the Government want to stop that from happening now?

You would understand it if Labour wanted to reverse acts committed by the last Tory Government. I understand far less the decision to reverse an act committed by the Labour Government, particularly when the current one is led by the man who, as Chancellor, introduced this move in the first place. This reversal is even more baffling as it was Gordon Brown who announced the policy in the 1998 and 1999 Budgets, and Gordon Brown who announced its cancellation in the 2007 Budget. Alistair Darling is getting the blame quite unfairly: this insane situation is all down to the man next door.

Whatever troubles he and his Government now face bacause of this, he has brought them on himself. Not the Labour rebels. Nor any of the other political parties, who are doing what oppositions do and opposing a completely ridiculous measure by a Government that, from what I can tell, appears to have simply gone ga-ga.

Before last year's election, I kept wondering if Labour at Holyrood were actually trying to lose. I'm now starting to wonder the same about Labour at Westminster.

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