We’ve all crunched numbers wrongly and had to backtrack. Embarrassing as it is, sometimes there is nothing to be done but bite the bullet, hold your hands up, make a clean breast of it, turn over a new leaf, dust yourself off and wake up and smell the backbench rebellion.
So when it emerged that our rash promise of a puppy for every new reader had seriously alienated our core “traditional” readership, we knew what we had to do. Yes, we had to lift cute puppy pictures from all over the internet and use them as a bribe, even though those who already have cute puppy pictures will derive extra benefit from the exercise over the puppy-deprived. It’s a tough decision, but someone had to make it.
It is interesting (to within an order of magnitude; when you’re at work; and it’s a slow Facebook day) to consider the professional response to Labour’s 10p blunder. Suggestions on this forum ranged from “restoring the 10p band and cutting benefits” to the solution eventually adopted.
Professional opinion is pretty much universal that the whole move was daft, a disgrace etc. In particular, there is a healthy scorn for the notion which Darling, darling! has successful palmed off on laypeople (ooh, you weirdos), that losing the 10p rate is somehow a giant leap forward in “simplification”. Any adviser will tell you that a single, immobile universal tax band on income with no exceptions or optional extras ranks as one of the simplest tax measures imaginable (then they’ll charge you £550+VAT).
Particularly galling to me was Darling, darling!‘s repeated weaselly insistence that one “cannot just unpick” a Budget when it is precisely as unpickable as any other bill on its Third Reading (which I concede may not be very unpickable at all; the point is there’s nothing special about tax legislation). Again, he’s relying on lay unfamiliarity here. The bit of legislation that says the personal allowance shall be £x, the starting rate shall be 10p, the basic rate shall be 22p, the higher rate shall be 40p etc etc says… well, pretty much that. And every month thousands and thousands of payroll agents up and down the country go into their payroll software and implement what the legislation says.
Pay As You Earn tax is a system which is, on the whole, foolproof and immune to abuse. There’s really nothing mystical about changing the rates, nor is there anything profoundly simplifying in doing so. It’s the work of five minutes and one crazed junior treasury minister with a blank piece of Statutory Instrument headed notepaper and a pen, and after that they never have to think about it again.
It’s not the income tax bands that make tax complicated. Not even near. It’s the reliefs, the exceptions, the oddballs, the (nasty word approaching) loopholes, most commonly found in capital gains tax, corporation tax and inheritance tax and rarely sighted anywhere near your common or garden PAYE income tax, that make up the complications.
However, it was clearly in Darling, darling!‘s interest to suggest that the whole process was vastly more complicated than it actually is, because that bought him time to negotiate the borrowing of the £2.7bn. What he really meant by claiming that it’s difficult to unpick a budget is that he can’t just palm off the cost on another group of taxpayers after the main budget debate has been and gone; he has to get more funding from outside instead. Good to know that Labour still shrinks from that much open tyranny.
In fact, never mind the complication, it’s still in his interest to pretend the whole thing was just a ghastly mistake (it was a Big Fat Lie; there is no way it could have been anything else; a junior tax assistant could have spotted the problem, given the figures on earnings and tax credit take-up). He’s not just blinking with terror like a rabbit in the glare of The Great Jon Snow because he’s had to make a U-turn. He’s blinking because he’s still trying to hide just how disgraceful the whole thing is. We’re treating this as the crisis point for Labour over the 10p tax affair when in fact this is the home straight. They’ve nearly got away with a shocking piece of straightforward deception.
That goldarned two-party consensus again
Sadly for the British people (not a phrase I care to use very often because it makes me queasy, as if I’ve eaten a big lardy slice of Tory Pie) the official opposition are in cahoots with Darling, darling! on this. It’s in Gorgeous Georgina Osbourne’s interest to make the whole thing sound far more complicated than it is as well, because he doesn’t understand a single bloody word of it.
This is why he keeps uttering mystical pronouncements such as “The cupboard is bare” and “They didn’t mend the roof when the sun was shining” like some exceptionally mundane sybil. I’m listening out for when he starts saying “They didn’t tie the giraffe up in time and now the hamster’s mother has outgrown the chocolate undergarments” because then we’ll know he’s getting overconfident.
And of course, even if Gorgeous Georgina wasn’t the dunce of the Tory front bench, the Tories still need to maintain the illusion of complexity because they don’t want to commit themselves to any spending plans. One of the easiest ways to avoid this is to pretend that taxing and spending is a great alternative universe of Mystic Numbers Whose Wot We Cannot Possibly Know Until You Have Voted Us Back Into Power Where We Deserve To Be AHAHAHAHAHAHA!!!!! ahem, ahem, sorry, and that it would be totally impossible to, say, assemble the basic toolkit of a calculator and the back of an envelope and start jotting some possibilities down.
This is politically clever because everyone believes them – I’ve even heard this touted as a Tory strength. I’ve heard it seriously suggested that they can’t do anything until they’ve “got in and seen exactly what kind of mess everything is in”, as if the economy is run out of a bunch of A5 cashbooks that Gordon Brown keeps locked in his kitchen drawer rather than a national system open to constant public scrutiny. So, politically clever, but economically and democratically grossly irresponsible, and underlines their sheer unashamed power lust.
The alternative, should any total cretin enquiring mind think I’m being a bit harsh on the Tories, is that Gorgeous Georgina really is that stupid. I am indebted to Daddy Richard for the knowledge that GG receives, every week, a Treasury Briefing. This briefing would enable him, at the whirl of a spreadsheet, to build a whole new quantified tax package, and know where every pound of revenue was coming from, and in what proportion. Tomorrow.
It wouldn’t tell him about outcomes of course; all the precautionary impact studies would remain to be taken. But the groundwork is there any time he cares to pluck it out of the air. Maybe he’s been guiltily stuffing his weekly Treasury Briefing down the back of the sofa for the last few years. Come to think of it, isn’t his little patch of the Tory front bench looking a bit… bulky?
Bad news if you’ve been mollified by Darling, darling!‘s announcement, because here’s the dirty little truth: he’s pulled the same trick on you again. Essentially, Gordon Brown’s great miscalculation in his last budget as Chancellor, which may yet be the undoing of him in his first election as Prime Minister, was to think that middle earners would be so chuffed with their 2p basic rate cut that they would ignore the fact that it was stripped off the backs of the low earners.
Well, rather than spending his extra borrowing on, say, reinstating the 10p band, Darling, darling! has now spent £2.7bn on a rise in the personal allowance which still leaves earners of between £6,000 and £12,500 worse off if they’re not on tax credits and also has the rather neat effect of benefitting those middle income net gainers from the Budget still further. £120 further, as he didn’t tire of saying on R4 this morning.
I’m not saying raising the personal allowance isn’t a totally admirable goal, but his emphasis on helping middle income hardworking families facing rising fuel and food bills blah-blah-please-love-me is so strong that it’s perfectly obvious that helping NMW workers isn’t the main agenda.
As the Low Incomes Tax Reform Group unhappily puts it,
We welcome the Chancellor’s announcement that he will aim to compensate some 10% losers by raising the basic personal allowance for the under-65s. Nevertheless, we have significant reservations.
Although it is churlish to be unhappy about a strategy (raising personal allowances) that we would normally welcome, we cannot let pass the fact that it is some of the very poorest who still lose out.
Yes, this is another middle class bribe, I’m afraid. As is this: