The comparisons with Brown’s removal of the 10p tax rate miss a crucial point: Brown tried to hide what he was doing. In his final Budget statement to the Commons, the abolition of the 10p rate wasn’t even mentioned. Instead Brown boasted about a 2p reduction in the basic rate, to huge cheers from the Labour benches.A cogent argument you might think but for one tiny flaw, it isn't true that Brown tried to hide what he was doing. Brown said, in the final part of his 2007 budget,
By contrast, the Tories have been upfront about the fact that there are losers from this change. There’s been no attempt to cover that up which is why the outcry started straight after the speech.
I can now return income tax to just two rates by removing the 10p band on non savings income....... I will from next April cut the basic rate of income tax from 22p down to 20p.Now I'm not defending Brown, but to suggest that the 10p tax issue occurred because it was hidden is just not true. In fact, at the time on my live budget blog I said,
Oh look, here's the big one. A 2p cut in the basic rate of income tax to 20%. But given he's just scrapped the 10% tax rate altogether he's just off-set it and dragged a ton of people into the 20% tax rate. He's basically just increased income tax whilst making it look like he's cut it.It was there for everyone to see, just like child benefit, the only difference is that no one seemed to notice it at first, possibly because they were falling asleep.
My guess though, on the issue of child benefit, is that the idea will be quietly shelved and/or changed before it comes into force in 2013, probably with the line that "the economy is much better so we don't need to make it as harsh as it was going to be".
For that reason James Forsythe is probably right to say it isn't a 10p tax moment, but his reasoning for getting to that conclusion is wrong.
Note: Then again politics is funny, so who knows what might happen?