Wednesday, April 18, 2012

Labour put down amendment which would have given Tories tax cut for richest they wanted - and which Lib Dems stopped

I realise that Parliamentary shenanigans and point scoring isn't everybody's cup of tea, but it's worth pointing out that Labour today squandered a relatively good position going into the first PMQs of the new Parliamentary term. Ed Miliband had an open goal ahead of him given controversy over the pensioners' tax allowance,  "pasty tax" and charity tax relief yet he and his strategists still managed to misunderstand parliamentary procedure to a ludicrous extent. He's just lucky that more excitable members of the Tory benches didn't take their chance to have some fun. 

Miliband looked not to Labour big hitters of the past for inspiration, but to a tv political satire. He could have pulled words from Barbara Castle or Michael Foot or Tony Blair. Instead, he pulled them from foul mouthed spin doctor Malcolm Tucker from The Thick of It, describing the Government's recent performance as an omnishambles. It's not been the best, for sure, but Labour have singularly failed to capitalise on the Coalition's woes.

Since the Budget, Labour have squealed long and loud about how wicked the Coalition is, particularly on cutting the 50p tax rate to 45p. They had the chance to vote against it in March, indeed Ed Balls promised they would, but, as Mark Pack's handy infographic shows, not one of them did. 

They had another go today, but they put in an amendment which, if it had passed, would have set the top rate of tax at 40p. This, bizarrely, would have been exactly what the Tories wanted all along, and which Liberal Democrat ministers stopped. In fact, Osborne only got to cut the rate to 45p because Liberal Democrats insisted  taxes were raised on the wealthy which would bring in 5 times the saving.

Let me explain. The Finance Bill clauses put forward by the Government were as follows:
Clause 1 – Income tax
Charge for 2012-13 and rates for 2012-13 and subsequent tax years
(1) Income tax is charged for the tax year 2012-13, and for that tax year.
(a) the basic rate is 20%,
(b) the higher rate is 40%, and
(c) the additional rate is 50%.
 (2) For the tax year 2013-14.
(a) the basic rate is 20%,
(b) the higher rate is 40%, and
(c) the additional rate is 45%.
The Labour amendment was to delete 2(c) which, if passed, would have left us with no additional rate. What they should have done was to put in an amendment deleting Paragraph 2 in its entirely meaning the tax rates for 2013-14 would have had to be discussed at a later date.

The Government won the vote comfortably, by 67 votes, but what would have happened if a few of our more mercurial right wing Tory friends had decided to vote with Labour to abolish the 45p rate?  The Labour front bench would have been drowning in egg yolk.

That wasn't Labour's only mistake of the day. Their promised amendment on tax reliefs didn't even make it into the debate.

If they can't get the basic parliamentary procedure right in opposition, what chance have they in Government? They've been calling the Government incompetent, but this display hardly inspires confidence.

The Co-Chair of the Liberal Democrat Parliamentary Treasury Committee, Stephen Williams, had this to say about the day's events:
“It is worrying that the two Eds don’t understand the fundamental principles of our tax system, despite having worked in the Treasury for many years as Gordon Brown’s backroom boys. 
“It took them 13 years to introduce a 50p rate and then they only did so shortly before a general election. Now that the local elections are coming up, suddenly they care about it again and put down ill-thought through amendments that remove the top rate altogether.
 “Labour’s biggest tax change was to remove the 10p tax rate hitting people on low and middle incomes while Liberal Democrats are giving nearly 25m basic-rate tax payers an Income Tax cut and have lifted more than a million people out of paying Income Tax altogether. At the same time, we’re making the rich pay their fair share by cracking down on loopholes and excessive tax relief.

1 comment:

Anonymous said...

"Labour have singularly failed to capitalise on the Coalition's woes".

You've not seen the opinion polls?


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