8 March 2008

Let’s be clear at the beginning. This is the policy of a Labour government we’re discussing.

Alongside the good news about the modest rise in the minimum wage is some bad news about the taxation of the poor.

From next month, when the income tax provisions of the last budget come in, the lowest paid will pay more income tax; the better-off will pay less. The budget abolished the 10 percent tax band and that’s the cause of the injustice. It means anyone earning less than about £19 000 a year will pay more income tax; people above that pay less.

People are liable for income tax when their work income reaches about £104 a week. People on very low earned incomes indeed will pay more tax.

Labour is rightly trying to reduce child poverty and, although progress is being made, this is proving difficult. The increase in the minimum wage will help. The loss of the 10 percent band and the consequent increase in income tax for those on low and modest incomes will reduce their take-home incomes and will worsen child poverty.

Disproportionate numbers of people in Cornwall earn low wages. This tax policy will make them worse off. The low paid in Cornwall are about to get a kick in the teeth from Labour.

I don’t know what, apart from socially unjust and stupid, you call a policy of taxing the poor more and the better-off less but I doubt it was what Labour voters thought they were voting for.