Margaret was asking about whether my MP, Jim Sheridan, got back to me about the abolition of the 10p tax band. The answer is yes – three times! First response was an honest admission that he was and is strongly resistant to removing the 10p tax band unless it was demonstrably clear that lower income people would not only, not lose out, but be overall better off. While understandably supportive of other measures his Party have taken while in Government, he acknowledged that the abolition of the lowest tax rate, which so obviously benefits lower income people, would undermine much of that good work – at least in the public perception.
While acknowledging both his candour and the validity of some of his points, I wrote back following the inept and vague musings of the Chancellor on Andrew Marr AM, to express astonishment that he claimed a budget can’t be changed once the financial year has started. So either the problems for low income people were not anticipated (not very competent or socially aware), or they were, but the hit was worth taking (so what about social justice), or the system was now so complex that valid adjustments can’t be made (back to competence and that well worn Reid phrase ‘fit for purpose’) – to a fiscal system of which the now PM was the architect. A second reply enclosed an even vaguer set of proposed responses from the Treasury to compensate those who lose out – with Jim Sheridan clearly aligned with those making the strongest possible representations.
Then earlier this week a further letter from my MP, with a further enclosure showing why the 10P tax rate isn’t effective – not least because its benefit is universal whereas relief for lower income folk should be targeted and more generous. As our Austrian waiter used to say in Mayerhofffen – ‘All OK Fine, but…..’ For me the but is, the child tax credit, pension credit payments are dogged by non-take-up, and require post graduate qualifications in filling up complex forms and negotiating the labyrinth of bureaucratic admin and means testing – a process not unrelated to non take-up. My further question relates to the claim now made by the PM, the Chancellor and the enclosed literature sent to me – that the 10p tax band was never intended as other than a stop gap till other measures were in place, and that it isn’t all that efficient a way of helping the poor. You see my problem is that the Government wants to be seen to reduce income tax for everyone – there is now no pretence that extra money for lower income people should be financed by taxing more those of us who can afford it. Which raises the question of how a Government needing increased revenue can raise the money while giving it back to all earners. Answer has to be indirect taxation – but that too is a universally applied tax method and hits the poor hardest.
Tax is a complex process. Economic fluctuations and pressures are now harder to predict, control, or avoid. But I am still deeply suspicious of a Government that abolished a measure which DID help all lower income people, and only after a year its MP’s woke up to its consequences. And it was done as a publicity stunt by a Chancellor whose eye was off the ball, cos he was looking towards the goal of being PM. And much of the explanation since has been to devalue the continuing usefulness of the 10p tax band – while putting in its place measures so vaguely defined the threat of a Labour revolt still exists.
Sorry for the long post – but it started as an expressed concern about social justice, conviction politics in relation to the poor, and a Government own goal. I can’t say my own concerns are now allayed. Trust is always something others give – it can’t be bought, and it shouldn’t be sold cheap. My local MP, Jim Sheridan is one of many good local MP’s whose embarrassment by all this is tangible, and whose loyalty must be strained to limits beyond which Party leaders are entitled to go on expecting support. What I can say is that my local MP has responded to and taken seriously my representations – and with a balance of personal candour and defensiveness of his Party, for which I am grateful for the first, and understanding of the second.
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