PMQs: Nick tackles Gordon on the 10p tax-con

by Stephen Tall on May 7, 2008

If the Prime Minister was looking for some respite in the Commons today – after last week’s drubbing by the electorate – his hopes were dashed. It’s just one damned thing after another for poor Gordon: the 10p tax fiasco (of which more later), post office closures, 42-day detention without trial, and the Scottish Labour leader going off-piste about a Scottish independence referendum.

The Tory leader David Cameron chose to range widely, attempting to give a sense of Labour’s paralysis. It would have been effective,too – but Dave has a tiresome habit of taking it too far, and tarnishing his rhetoric. Take today’s cheap closing jibe:

This is the Prime Minister who went on “American Idol” with more make-up on than Barbara Cartland; this is the Prime Minister who sits in No. 10 Downing street … waiting for Shakira to call and waiting for George Clooney to come to tea. I have got a bit of advice for him: why does he not give up the PR and start being a PM?

Caustic stuff, and good for rallying the troops. But it’s not exactly Prime Ministerial. The Tory leader is keen to give the impression that he’s not complacent after last Thursday’s results. He’d be well-advised to drop some of the smart-arse quips, and start behaving like a PM-to-be.

Another good PMQs’ performance from Nick Clegg, focusing on the continuing rumblings of discontent of the Labour party’s perverse decision to tax the low-paid more, by doubling the 10p tax rate. The Lib Dems were the first party to identify the issue, back in March 2007, and Nick is right to keep campaigning on it. As he told the Prime Minister today,

This is a matter of principles. Remember those?

You can watch today’s PMQs encounter over at; or you can read the Hansard transcript below:

Mr. Nick Clegg (Sheffield, Hallam) (LD): May I add my own expressions of sympathy and condolence to the family and friends of Trooper Ratu Babakobau? Also, I am sure that I speak on behalf of all Members of the House when I extend our expressions of sympathy and condolence to the family and friends of Ray Michie, the former Member for Argyll and Bute, who sadly passed away just last night.

Does the Prime Minister understand the threat from the right hon. Member for Norwich, South (Mr. Clarke) when he said that the doubling of the 10p tax rate will

“resonate until there is clarity”?

When will we get concrete proposals to compensate all those who have been hit?

The Prime Minister: I add to the condolences that the right hon. Gentleman has sent to the family of Ray Michie, who was a very distinguished Member of this House.

The right hon. Gentleman’s party is not proposing the restoration of the 10p rate—not at all. Let me also say that the Chancellor has put his letter to the Treasury Committee and outlined the steps that he is taking to deal with the two groups that were missed out—the 60 to 64-year-olds and those people on low incomes who cannot claim the working tax credit—and he will put forward his proposals in due course. I would have thought that the Liberal party would be prepared to wait until he puts his proposals.

Mr. Clegg: That is not good enough. This is a matter of principles. Remember those? I think that everybody now knows that when it comes to helping the most needy, the Prime Minister has got no principles and the Tories have got no policies. Will he now provide an absolute guarantee that those who have lost out will be compensated in full, backdated to the beginning of April, and will not have to jump through hoops to claim what is rightfully theirs?

The Prime Minister: The Chancellor will put his proposals. The Liberal party opposed the new deal, which has helped 2 million people get into work. The Liberal party wanted a local minimum wage, not a national minimum wage, and the Liberal party opposed our child tax credit and our child trust fund. That is not a record that it should be proud of.

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Nick Clegg is totally right to keep raising it especially as over in Crewe and Nantwich it seems to be Camerons number 1 pitch….liked the crocodile tears comment from Vince Cable too…

by Darrell on May 7, 2008 at 9:42 pm. Reply #

The laughable thing about Cameron is that the problems he sees in others are his own worst faults – he can complain about the PM’s PR because PR is his area of expertise and the basis of his rise in popularity, but changing the style of presentation isn’t the same thing as backing up words with deeds.

by Oranjepan on May 7, 2008 at 10:00 pm. Reply #

“The right hon. Gentleman’s party is not proposing the restoration of the 10p rate—not at all.”

That would be total rubbish.

by Alix on May 8, 2008 at 8:36 am. Reply #

All laudable stuff, but what are we offering the low paid instead – other than a vague pledge to raise the income tax starting threshold “in the longer term”?

Let’s take NMW earners out of tax NOW! That would be a good petition for Crewe.

by Andrew Duffield on May 8, 2008 at 8:39 am. Reply #

Andrew, where did you read the “in the longer term” bit? It worries me how little known our tax policy appears to be.

Our tax policy, based on last summer’s paper, commits us to restoring the 10p band as was but making it a 0p band – i.e. that IS effectively an extension of the threshold – as well as lowering the basic rate to 16p. Starting rate for NICs would be raised correspondingly.

This costings summary provides a useful list (note this is from before the Local Income Tax was worked in, so the basic rate is still being reduced to 18p in this version):

I rather agree with you on NMW, in the sense that it’s exactly the sort of thing the Tories will seize on if we’re not careful, and the fact that our *existing nine-month-old policy commitments* go much of the way towards producing the same effect will count for nothing.

by Alix on May 8, 2008 at 8:50 am. Reply #

On another point.

Should Gordon Brown have voted in last week’s elections?

Even if it were not illegal is it not incumbent on a PM to set a good example and not use his two votes in two elections that are for the same layer of Government?

by Questioner on May 8, 2008 at 3:25 pm. Reply #

But they aren’t – He voted for local councils and a devolved parliament in Scotland last year and for a mayor and what is effectively a county council this year.

The guidelines from whatever the department which may or may not still be called the DCA was called then..were very clear. The GLA is NOT a devolved assembly, it is a kind of local government above the boroughs.

Confused? It’s our ad hoc constitution, of course you’re confused!!

by Benjamin on May 8, 2008 at 4:44 pm. Reply #

“Our tax policy, based on last summer’s paper, commits us to restoring the 10p band as was but making it a 0p band.”

‘Fraid not Alix. That was the previous tax paper ‘Fairer, Simpler, Greener’. The most recent policy paper (somewhat disingenuously entitled ‘Reducing the Burden’) makes it clear that we are no longer committed to raising the threshold in this way. See:

Note in particular the following comments: “As a result of these changes [in Brown’s 2007 Budget] the cost-effectiveness of
different income tax packages changes somewhat” and “The lower projected
rate of LIT [in our revised tax plans] is a result of the government’s abolition of the 10p starting rate for
income tax, which broadens the income tax base relative to our previous plans”.

In other words, despite our (justified) indignation over the doubling of the tax rate on the low earners, we are NOT committed to doing anything to address this injustice.

Instead, we promise to ‘spend’ all of the revenue from higher taxes elsewhere on the 4p cut in the basic rate – which, while very welcome, is in my opinion less of a priority than raising the personal allowance.

Of course, the reason we had to go down this route is our commitment to a local income tax of around 3.5p in the £ – without a corresponding cut in national income tax we would be raising marginal income tax rates on low/middle earners, which is clearly a bad idea.

Another reason why it’s high time we reconsidered the policy of replacing domestic property taxation with LIT. We also should be looking at ways to reduce the OVERALL tax burden in my view, although this may not be possible in the short term because of the dire state of the public finances.

by Alex Sabine on May 9, 2008 at 12:30 am. Reply #

He should take a leaf out of Blair in opposition:

“Weak, Weak, Weak”…

by John on May 9, 2008 at 10:50 am. Reply #

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