Who sang "Won't get fooled again..."? That's right, they did. And the headlines the following morning had spotted the con. Near the start of his budget speech the Chancellor had said it was going to be "revenue neutral". In the language ordinary people speak, this means that, overall, he'd raise no extra tax but he'd make no major tax cuts either.
2p off the basic rate of income tax sounds generous. But it's not. First of all it isn't happening until April 2008. Gordon said he didn't want to do a Gladstone and combine the offices of Prime Minister and Chancellor. Yet he gave us much of the substance of a 2008 budget speech. Assuming he's in 10 Downing Street this time next year, all his successor at the Treasury need do on budget day is stand up, say, "I refer you to the speech my right honourable friend gave this time last year," and sit down, job done.
So why isn't a 2p tax cut generous; because it was accompanied by a pair of tax increases. When the cut takes effect we will also lose the 10p lower rate - a tax increase - AND the upper limit on National Insurance contributions has been raised. So by the time your books are balanced, you wont be that much better off and you wont see it for another 12 months yet anyway. Not quite so euphoric now?
Funded largely by the removal of the 10p lower rate of income tax (£8.63bn in 2009-10), that the Chancellor himself actually introduced eight years ago, the cut in basic rate income tax was sold as major help for lower income families. The reality is somewhat different. For many there will be little change in their actual take-home pay.
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