Camilla Cavendish
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The Government has turned a corner,” said Frank Field yesterday, And so it had. There was a hollow clanging sound as the Chancellor reversed away from a wall of derision and promised to compensate some of those made worse off by the Prime Minister's decision to abolish the 10p tax band. He had to. Having robbed 5.3 million of the lowest earners to fund a tax cut for those on middling incomes, Gordon Brown was about as popular in marginal constituencies as the Sheriff of Nottingham was in Sherwood Forest.
Mr Brown has rescued his Finance Bill. But this arcane-sounding row has lost him something more profound. He has been exposed as putting political advantage before principle even on the issue that he is supposed to care most about - poverty. He only introduced the 10p band in the first place to wrong-foot the Opposition. He abolished it for the same reason. It has been, from start to finish, a brazen political fiddle.
The 10p tax rate was brought in solely for the purpose of trumping the 20p rate brought in by the Tories. That was a childish game that successive chancellors had played. Mr Brown was under no illusions about the real merits of the policy when he introduced it in 1999. Andrew Dilnot, then head of the Institute for Fiscal Studies, was so infuriated that he branded it a gimmick. The Chancellor claimed that the new rate would make the tax system fairer, but he knew perfectly well that it would have been fairer to raise personal allowances. He claimed that it would help the worst-off. But again, experts called his bluff. The poorest third of adults didn't pay income tax at all, they pointed out, so stood to gain nothing. It would have been better to cut a tax they did pay, like VAT. But that wouldn't have provided such a slam-dunk headline.
After years of talking up a policy whose advantages were actually modest, Mr Brown then found it expedient to abolish it in last year's Budget. The reason was similar. He had decided to cut the basic rate of income tax from 22p to 20p, a wholly unexpected policy he brandished in the last line of his Budget speech to maximise David Cameron's difficulties at the dispatch box. It must have seemed like a brilliant wheeze, a direct hit on Tory attempts to portray him as a big, clunking tax-grabber. Labour MPs crowed about it for weeks. But to fund the tax cut, he abolished the 10p band - picking five million pockets to buy a few weeks of Tory discomfort. Clunk. The bearings just fell out of the moral compass.
These dismal shenanigans fit a pattern. We have not begun yet to glimpse the true scale of the damage that will be caused by the decisions to tax non-doms and alter capital gains tax. These reforms were rushed through to fund inheritance tax changes because Mr Brown was more desperate to wipe the smile off the face of that infernal George Osborne than to think through the impact on the nation. The political fallout was limited, but the economic consequences could be considerable.
We all know that politics is a con some of the time. But it's beginning to feel like politics is a con almost all of the time. And the politicians still don't seem to realise that we see through them. Why did only seven Labour MPs support Frank Field's original amendment to the proposal to abolish the 10p tax band last year, when it really mattered? Where were the 45 rebels who on Monday pushed the Government to the brink? Were they asleep? Or were some of them vaguely, in the backs of their minds, hoping to get a job in a Brown Cabinet? Why did only 19 Labour MPs vote against the Bill to close post offices, when 90 have since campaigned in their local constituencies to save them? Do they think we don't notice?
The hypocrisy is shameless. It is simply not credible to double the rate of tax and maintain, as Mr Brown did last week, that “no one will lose out”. True, the labyrinthine system of tax credits and other benefits meant that the calculation was not straightforward: not everyone was facing a bigger bill. But his claim yesterday that “we are determined to take action, because we are the party of fairness”, was surreal. Yes, this Government has funnelled considerable benefits to working families with children. The Institute of Fiscal Studies has found that incentives to work improved generally between 1979 and 2000. But it also says that they have weakened since. The Treasury's own figures at the last Budget, in a section hilariously entitled Fairness and Opportunity, predicted that the current policies would double the number of low-paid people facing high marginal rates of tax. Almost two million people earning about £6,500 a year, it calculated, would face average marginal tax rates of 70 per cent. Why should you slog to earn that extra pound if you can keep only 30p of it? How does that square with the mantra of making work pay?
One result of yesterday's U-turn is likely to be a rash of costly adverts urging some of the people who lost out to claim fiendishly complex tax credits. No doubt these will trumpet the “helping hand” offered by a “caring” State. But the language has been despoiled. The cavalier manner in which this Government decided to hit the poor, then tried to deny there was a problem, has been a last straw for many Labour sympathisers. There is a certain Schadenfreude among some Blairite MPs, that Gordon Brown had been paid back for having encouraged disloyalty in the past. But they know that the fallout could be dire. The Government set out to score political points, dressed it up in sanctimonious language, and was caught out. Things can only get bitter.

Camilla Cavendish has been a McKinsey management consultant, an aid worker, and CEO of a not-for-profit company. She is now a leader writer and columnist on The Times
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A more skilled politician than Mr Brown would have realised that to rescind a measure he himself had introduced (with much fanfare) demonstrates a lack of judgement.
He should have left it to a successor. Thank you, Camilla and Frank Field whose sense of morality has never been in doubt.
Fred Keeling, Almunecar, Spain
This is a cynical strategy thought up by Brown to push more and more of the electorate into claiming tax credits which will ensure that the poor stay poor and be very grateful to the Brown administration for keeping them out of poverty. This is gerrymandering on an epic scale.
Mike Lincoln, wakefield,
So the bureaucratic machine takes our money, only to 'offer' to return it if you can find + work out how. Surely it makes more sense to not take it in the first place so it doesn't require Whitehall paper pusher to administer?
But no, then they'd lose out on the money that fails to be claimed.
Hugh, Northampton, UK
What about the new car tax? Next April my tax will have quadrupled in 7 years and is probaly worth more than the car. This will hit the poor very hard on the run up to the next election.
As Steve Norris said about the congestion charge in London, 'it's roads for the rich' under Labour
Robert, Worcester, UK
U turn Government ? not at all - more like U bend !
John Newbury, Warminster, UK
At my place of work; all the workers are under 30 and ALL of them have seen their taxes rise. Not one of them claim tax credits or are even probably aware they could do so.
Brown has bought off the rebels with a bag of magic beans and will be laughing all the way to the bank.
John, Blackpool, UK
Surely, the reason Brown made these changes in the '97 Budget was that he was planning ahead for when he would takeover as PM and call THAT early election? He wanted to go to the country boasting that he had reduced taxes to the lowest basic rate ever, and outbid the Conservatives tax promises.
m wood, somerset, uk
U-turn to ensure the election is not impacted. Yet another hollow promise by NuLab. Ken bought out the Union by ensuring they do not strike and now GB wants to buy out the voters for next week's election. What a pathetic gesture. People of UKplc it is your chance to show your disgust for NuLab!
yt, London, UK
Is it just obvious to me that the personal tax free allowance should be hugely increased, funded by sweeping away the myriad "benefits" and tax credits as well as the army of civil servants administrating the same? This has to be the best way of helping the low waged.
Arnold Ward, Weybridge, Surrey, UK
Far too little, too late and too complicated Mr Brown.
This former Labour voter has voted Tory in the London elections via my postal ballot. I just wish it was a general election.
Stuart Webb, London, UK
...and still nothing said in the media about the CUT in Corporation tax for Big Business and the INCREASE in Corporation tax for Small Business. They could re-intruduce the 10p rate and pay for it from the ever increasing tax take on the price of Petrol.
Rab, Glasgow,
The overwhelming majority of MPs quietly swallowed the loss of the 10p tax band because they thought their party could walk on water. It was only when Brown backed away from an election and one disaster after another was reflected in the polls that the Labour 'conscience' started to stir.
anne, bournemouth,
It looks to me like GB cuts the 22p rate to 20p to help his campaign for the, later aborted, autumn 07 general election. He needs middle class votes to win, and thought his 'rob the poor' trick wouldnt become obvious until after he had won.
Andrew Piercy, Northampton, England
Of the seven people who work in my office and claim family tax credits every single one has had to repay 'overpayments', three as much as £2500. Either the staff at the inland revenue are incompetent or the system is flawed.Our PM 'helps' the poor and then like a thief in the night steals it back.
john, Oldham,
Neither Brown nor Darling has any grasp of tax policy, or any curiosity about it. As the article says, tax changes are introduced impulsively and for short-term political gain, without thinking them through. Unfortunately, Osborne doesn't appear to be much better. Vince Cable, yes.
Frank Upton, Solihull,
I have not seen a single commentor or MP comment on the Budget change that reduced Pension Tax Relief from 22% to 20% for the lower paid.
Yes its another clever take from the lower paid worker of 2p in every pound put into thier pensions.
I calculate its works out at £1Bn a year to the Government
P Dowding, Church Fenton, Engalnd
Remember the last PM who cocked a policy up and refused to do a U-Turn. The Torygraph is convinced she was the UK's greatest post-war PM but she went to her political grave chanting the mantra 'The Community Charge will be popular'.
The big problem was that her MP's were too craven to warn her.
bill from the bush, Basingstoke, england
So, lots of MP's and the like say they will resign.
It will be interesting to hear their reasons why they have not resigned in a couple of weeks time when nothing has changed.
A message to those MP's and the like.
We don't believe you will resign, mostly because of your past conduct.!
Dave Kinsley, Derby, UK
Gordon Brown will be remembered as the TenPenny Accountant/Chancellor who could'nt add up but could waste precious Billions.
So much has been sqandered by so few.
So much for his 'Green Credentials' - more like 'Green behind the ears'.
He would never have been in charge of the Petty Cash Box!
Bill, Swindon, UK
The fairest way of taking working people out of the low income bracket would be to substantially increase personal tax allowances and to scrap the working tax credits which is only there to allow more snooping into peoples' affairs and of course to create a larger voting base for himself and party
Mick Boon, Grays, England
He hasn't achieved the other thing he claimed by cutting the 10% band - to simplify the tax system.
CHARLES, EXETER,
Samantha, London
That would never do for this control freak we had as Chancellor and now have as PM. He makes us poor so that we have to beg and then he can "help" us.
Be pacient Samantha; before long Gordon Brown and his sycophantic ministers will be begging us for our vote. We know what to do
Matilde, London,
There is something wrong with our bloody country...when a venal government puts all its eggs in one basket and then does nothing but administer to that basket...
The eggs are the economy and the basket is the venal government... the venal government knows the cost of everything and the value of nothing...
Hugh E Torrance, London, England
Problem with democracy is that everybody gets to vote and politicians are reduced to soap advertising tactics to stay in power - truth is most of them have stains that will never wash out.
Ivan de Nemethy, London, UK
Judging by the latest fiasco, neither Brown nor Darling are fit to run a Winkle stall, let alone one selling Whelks.
D.Walker, Burnley, England
As a small business owner I have retreated into my bunker, stopped investment, stopped spending, stopped expansion, stopped taking on new employees until the Clunking Chancellor has gone and the sun come out again.
Demaris, Dudley,
This is not a u-turn by Gordon Brown. There will still be thousands of people like myself , who work part-time and have no young children, and my daughter on a low wage, who are going to have to subsidise higher paid workers.
Raising the higher rate tax and retaining the 10% rate would be fairer.
Pam , Ravenshead, Notts
Hard working people don't want to go cap in hand for tax rebates. It makes them feel like second class citizens. They want to work, and get paid for it.
Absolutely spot on - I don't want to be supported - I want to stand on my own two feet - let me keep the money and leave me alone
Tony, Cardiff,
Not all the people who are elligible for tax credits will claim them. Some won't even know and some are too proud to do so. The government know this will just keep quiet and keep the money, just downright dishonest!
Brian Roberts , Plymouth, Devon
I find it very difficult to understand how Brown thought he would get away with the deceit of the 10p tax removal. Surely he did not really think nobody would notice.
Has anybody yet considered the extra administration costs involved with this so called 'u-turn'.
Dr. W. J. Scaife, Chelmsford, England
This is a perfect example of MPs saving their own skins. They do not know how much the compensation will be, to whom it is going to be paid and when it is going to be paid, (if at all). They do not know how it is to be funded because at the moment it is only another New Labour 'promise'.
Peter, Brixham, Devon
My girl friend is a 59 year old Gujerati woman working at a minimum wage stand-up factory job. She is going to lose several hundred pounds a year, thanks to GB. She can't fill in a lot of forms; she can hardly read. GB had better stay out of reach of her handbag! And there are plenty more like her.
Thomas Goodey, Cuxton-upon-Medway, England
To paraphrase one of the Hellers(Robert or Joseph?) "things can only get bitter, unless, of course, they get worse".
Bill Peter, Kuala Lumpur, Malaysia
I wonder how many people will use next weeks election to show him our anger?
If Labour get a good spanking then, hopefully, the message will get through.
Ken Wyatt, Todmorden, UK
Hard working people don't want to go cap in hand for tax rebates. It makes them feel like second class citizens. They want to work, and get paid for it. Not taxed more and then have to carry a begging bowl.
samantha, London, UK
Brown hasn't done anything. He has promised something for only 396,000 people. The rest will still have to cough up. He has not said what he will do for the 4.6 million still affected by an increase. Is the media being purposefully stupid about this?
judy, Liverpool, England
Brown is in a mess entirely of his own making and yet even now he can't bring himself to admit the mistake, say sorry and do something about it. This keeps happening and yet he keeps up the same bravado, the same excuses. This man is not fit to be prime minister. He's a national embarrassment.
Paul Owen, Birmingham, UK
and more bitter.
Albert Hall, kettering,