Date: 25 April 2008

10p Tax Band U-turn

Local Conservatives today welcomed the news that compensation will be offered to people who lose out from the abolition of the 10p tax rate, but were disappointed by some of the proposals and concerned about their effect on people in Staffordshire Moorlands.

Karen Bradley, Prospective Parliamentary Candidate for Staffordshire Moorlands, said:
"I am very relieved that Gordon Brown has finally acknowledged the mistake that he made last year in abolishing the 10p tax rate and that he will compensate those people who lost out from what was a pre election tax con.  But the Chancellor should come clean. He says the 10p tax band was intended to be "transitional".  But this was a 1997 manifesto pledge and certainly Gordon Brown never mentioned that it was "transitional" when he introduced it. This seems to me to be the worst kind of spin - rewriting history to suit today's situation. I am sure that, like me, voters will wonder what other Labour promises are also "transitional" when they decide who to vote for at the next election.

Although the u-turn is welcome, as always with this Prime Minister, the devil is in the detail. Unfortunately, we won't know that until October at the earliest. I am worried that many people in the Moorlands will not receive any compensation because they don't fall into the identified populations that the Chancellor has said will receive support.  I'm also not convinced that meddling with the rate of the national minimum wage is the solution. On the face of it, already struggling businesses, may have to backdate significant pay rises for staff and to add to their misery, the Chancellor will take 20% of the increase back in tax.  This is not a good move at a time of economic uncertainty and could do serious damage to our local businesses.

We should remember that whatever these measures are, they will almost certainly lead to more people claiming means tested benefits.  It seems wrong to me that a hard working nursery nurse, cleaner or shop assistant, should have to complete a long, complicated and intrusive form to claim back money that the Chancellor should never have taken from them in the first place."