What the 10p tax row tells us

I hope you have been following the fascinating row about the abolition of the 10p tax rate. It tells you a great deal, this one.

The first thing it tells you is about Gordon Brown.

When Labour MPs complain about the abolition of the rate they are told it had to go in the interests of tax simplification.

Wrong. It had to go to pay for a 2p reduction in the basic rate in Brown's last Budget. And this was a gimmick designed to make David Cameron look foolish. It was a political masterstroke that worked for, oh, about 45 minutes.

The reason I know it was a gimmick rather than a simplification measure is that it was Gordon Brown who introduced the 10p rate in the first place. Why? As a gimmick to make the Tory's look foolish. A 10p rate was announced by Labour in 1997 to cast themselves as tax cutters.

The second thing it tells you is something about MPs. The 10p rate abolition was nodded through by Labour members when it was announced last year. It wouldn't have been expedient to have challenged Mr Brown then.

Now the political situation has changed and suddenly everyone's an expert about how Labour can win the next election. So they all notice the 10p rate for the first time and find the courage to challenge it.

It shows just how political and random these apparent issues of principle are. MPs who were quite happy to support a measure last year now wake up and decide it is an affront to their left wing conscience.

And finally it tell you something about tax cuts.

The row shows that there is a vast difference between a change of tax rates and an overall tax cut. Tories cannot get all indignant about Brown's deliberate attempt to muddle these things if they are not going to be absolutely crystal clear themselves about the distinction.

Comments

[Alex R]

Also it shows you that Brown really isn't interested in the detail or unintended consequences of a policy (I doubt he would really have introduced if he'd know you it would have hit).

This is the strongest theme that comes out of the Bower book.

[Terence Munro]

My take on the abolition of the 10p tax band is simple, it goes against all labours principles and as such as a lifetime supporter I will never vote for them again and I would urge everyone to do the same. I am so incensed by this policy that even if they now reverted I doubt if I could ever support them again.