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Miliband steals a march on Tory tax campaign

14 February 2013

Ed Miliband has just started his economy speech in Bedford, so as he gets underway, here’s a quick thought on his plan to reintroduce the 10p tax band. Doing this steals a march on a brewing Conservative campaign. Robert Halfon has been pushing over the past couple of months for the restoration of the 10p tax band to help those on low incomes. He’s badged it the ‘Great Gordon Brown Repeal Bill’, and David Cameron set some pulses racing yesterday at PMQs when he told Yvonne Fovargue that ‘we will not forget the abolition of the 10p tax rate that clobbered every hard-working person in the country’.

But on yesterday’s Newsnight Jon Cruddas also dropped a hint that Labour could bring back the rate, and Miliband will shortly confirm this in his speech. It’s not just Tory MPs who won’t forget that move by Gordon Brown: Labour MPs were also in uproar over its abolition.

Now, there are plenty on the right who don’t think restoring this rate is a good idea: it adds even more complexity to the tax system. They favour raising the personal allowance further. But the problem for the Conservatives is that the Lib Dems have largely managed to claim ownership of the personal allowance rises because it was their manifesto pledge. Thus the 10p tax is a better political weapon for the Tories.


Halfon’s campaign isn’t aimed at this year’s Budget, but the hope would be that it could appear in the party’s manifesto or a Budget closer to the 2015 election. But by pledging to restore the rate, Miliband isn’t just making a break with his party’s past, but also irritating the Conservatives. His speeches often leave listeners wondering what they’ve learned that’s new: this one looks like it’s going to be a great deal more memorable than that.

UPDATE, 11.25: One killer line, though, in this speech is this:

‘A One Nation Labour budget next month would lay the foundations for a recovery made by the many, not just a few at the top. Let me tell you about one crucial choice we would make, which is different from this government. We would tax houses worth over £2 million. And we would use the money to cut taxes for working people. We would put right a mistake made by Gordon Brown and the last Labour government.’

Those words in bold suggest that this could well be another ‘for now’ policy, while at least Halfon is looking forward to the future, not just writing his own fantasy Budget.

P.S. As well as the detail of these ideas being different, Miliband took a different view of the change back in 2008. He said:

When you make a big set of changes in the tax system, some people do lose out. That is a matter of regret. Of course it is. But overall these changes make the tax system fairer.’

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  • Russell

    The headline should have stopped after the words Miliband steals……..

  • Steve R

    Another example of Labour attempting to re-write history. The 10p tax rate was abolished simply to create headroom to lower the standard rate by a penny or so. The interests of the lowest-paid were sacrificed to woo the majority in the middle-bracket. Everyone knew this at the time, it was part of GB’s (and Ed B’s) plan to capture the middle-income vote, and the assumption was that the lower-income vote could be taken for granted.
    Also let’s not forget the cost in extra borrowing of compensating the former 10p tax beneficiaries – once GB had finally been forced to admit that they had all lost out – it was circa £2.7bn – and this had to be borrowed at a time when we were already maxed-out on loans from the markets.

  • Steve R

    A sartorial point – It should be decreed a crime to wear a white shirt with a jacket but without a tie – he looks like an off-duty waiter…… offence to waiters intended, a fine and under-valued profession. Why do politicians never wear other than white shirts – are they afraid of revealing a “personality”?

    • Colonel Mustard

      It’s the I’madinnerjacket, mahdi, jihadi look. That photo even makes him look like he should be in Iran. If he becomes our next Prime Minister I have no doubt Iran will be brought here.

  • UlyssesReturns

    I was watching the last past of the (always excellent) Jeff Randall on Sky yesterday evening. He was interviewing an unimpressive lady who appeared to be in charge of HMRC – I forget her name and can’t be bothered to look it up. Apart from a long string of platitudes and obfuscations about tax evasion, non-collection, obvious incompetence of the tax gatherers, and the usual civil service-speak, two extraordinary comments from this overpaid clown stood out. The first was tax credit overpayment/fraud stands at around £4 billion a year,with little hope of recovery, and the other blinder is 30% of taxpayers receive tax credits. In what universe should a tax collection agency pay people what is in fact welfare, and why on earth is this lunatic system still in place?

    • Dicky14

      I can’t seem to get it on my work pute but if you look up Jerry Hayes’ corruscating commentary on Lin Homer you’ll see she has form. Also, having worked for HMRC in their tax credit division it was obvious to all ‘us minions’ that we were patently being lied to and response came there none. Tax credits should be immediately abolished and the politics of the tax threshold taken as a Liberal win, should that be the spin. The Revenue is subsidising low wages and disincentivising any attempt to earn more. Also, strange how (when I was there) all taxi drivers miraculously worked 30 hour weeks and only earned £5,000 per year – how odd!

    • Colonel Mustard

      Two words. Gordon Brown. That giant (flop) of economics whose scheming and conniving was of labyrinthine complexity and mostly directed at discomforting the opposition. All his many convolutions, scams, lies and schemes should now become known collectively as “The Gordon Knot”. Then someone should cut it.

    • 2trueblue

      After nearly 3yrs this is his only policy he has put forward? Says it all, still no ideas, no plans, no real thought put into putting the real wrongs they committed economically. It really does not rate.

  • Vir Cantium

    Small dull technical point – ‘reintroducing’ the 10p tax rate in this
    way would be a simplification. The 10p rate never went way, it still
    applies for savings income where unearned income didn’t exceed the

  • lee taylor

    Except isobel they’re only proposing to apply it to the first £1k above the tax threshold not £2.5K as proposed by Robert Halfon.

    Plus they’ve already used the mansion tax on tax credits…

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