Whiff of hypocrisy
Sixty Labour MPs who have publicly said the Government should rethink its plans to scrap the 10p tax band actually voted the change through when they had the chance to overturn it. They said ‘yes’ to scrapping the 10p tax band on 18 March when the resolution to implement the Budget was voted on. Fifty one of them voted it through despite having already signed a Commons motion calling on the Government to rethink the plans. Only twelve Labour MPs who had signed the motion did not vote for the change. But none of them actually voted against – they all abstained.
Parliament is a strange place and MPs often feel obliged to support their party – especially if it is in Government and particularly over resolutions that implement the Budget. But there is whiff of hypocrisy about MPs who complain about the effects on their constituents of a tax change they actually voted for three weeks earlier.
Let me remind you what the effects are. People under 65 who rely on a pension with an annual income between £5,645 and £16,505 will be paying more tax this week than they did last. Over the year they will pay up to £181 more tax. People under 65 who work will pay more tax if they earn between £5,931 and £15,075. They will lose up to £152 over the year. Meanwhile those with an income of £41,435 or more will be £297 a year better off if they work and pay National Insurance contributions and if they are over 65 at least £788 better off.
MPs now kicking up a fuss cannot complain they didn’t know about the effects. When the change was first proposed by Gordon Brown a year ago Saga was not alone in declaring it to be Robin Hood in reverse – taking from the poor to give to the rich (see Saga Magazine May 2007, June 2007, February 2008 and this column 27 March 2007, 27 February 2008). Radio programmes and national newspapers also pointed out that the change would penalise low income households – though some were less clear about how much their wealthier readers would gain. It was also raised in Parliament in the debate on the Budget in 2007 when Gordon Brown proposed the change. Former Chancellor Ken Clarke made this prediction about scrapping the 10p band.
"Doing it because he needed the headlines now will reduce the income of some very poor people next year…I do not for the life of me understand why people like me are benefiting at the expense of those on low incomes." (Hansard 27 March 2007 col 1384-1385).
And don’t be taken in by claims that the losers can get tax credits to make up the difference. Many – perhaps most – can’t. They include people under 65 living on a pension, people under 25 without children, and anyone who does not work at least 16 hours a week – or 30 hours if they have no children. Single people without children are excluded at incomes above £13,000 a year.
There will another vote on this contentious issue later this year. Why not ask your MP to vote against the change? Find out who your MP is www.theyworkforyou.com/mp
See how they voted when the resolution was passed on 18 March www.publications.parliament.uk/pa/cm200708/cmhansrd/cm080318/debtext/80318-0019.htm
And see who signed the three motions against the change.
http://edmi.parliament.uk/EDMi/EDMDetails.aspx?EDMID=35250&SESSION=891
http://edmi.parliament.uk/EDMi/EDMDetails.aspx?EDMID=35274&SESSION=891
http://edmi.parliament.uk/EDMi/EDMDetails.aspx?EDMID=35549&SESSION=891
(this motion has been withdrawn but you can still read it here
http://www.publications.parliament.uk/pa/cm/cmedm/80402e01.htm by
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