Biggest byelection bribe since the Humber Bridge?

Date published: 13/05/2008

Two months after the proper budget, the government has unveiled what one Tory MP described as the biggest byelection bribe since the Humber Bridge (announced by the Harold Wilson government to help win votes in the Hull North byelection of 1966).

Just eight weeks after Alistair Darling told MPs that there was not enough money to pay for large tax cuts, he has announced a £2.7bn tax cut. Of the 5.3 million people who lost out from the abolition of the 10p starting rate in the last year's budget, a move that cost Labour dearly in the recent local elections and could yet still cost them the previously safe Labour seat of Crewe and Nantwich in the forthcoming byelection.

Rochdale’s Labour Parliamentary Candidate Simon Danczuk has welcomed the Chancellor’s changes to the tax system. He said: “It’s to the credit of Gordon Brown and his Chancellor that they have taken the steps necessary to ensure nobody is worse off as a result of the tax changes in last years budget. Admitting to ones mistakes and putting them right is, I am sure, something we all welcome from people in politics. I had raised my concerns about the impact of getting rid of the 10p tax rate and I’m delighted our Labour Government has done the right thing by increasing the personal allowance by £600 to £6035, benefitting all basic rate taxpayers under 65, backdated to 6 April.”

A local Conservative spokesman took issue with Mr Danczuk's statement saying: "Mr Danczuk says 'nobody is worse off as a result of the tax changes in last years budget', but even this extraordinary byelection bribe still leaves 1.1 million households losing out from the abolition of the 10p rate and these are mainly the poorest earners."

Mr Danczuk added: “This means around 22 million people on low and middle incomes will gain an additional £120 this year, equal to the average loss that households would have incurred. It also means 4.2 million households will receive as much or more than they originally lost. And 600,000 more people on low incomes will be taken out of tax altogether.

Local Conservatives, though welcoming any help for the poorest paid in the borough, echoed the concerns of Shadow Chancellor Geogre Osborne pointing out that this is a one-off measure and there was no annoucenment of any long term plans, the money could very easily be clawed back by the chancellor at the next budget. The spokesman said: "Labour are treating people like fools. Where has the Chancellor suddenly found the money from after saying he could not afford to fund a tax cut? He says he is going to borrow it, but borrowings have to be paid back.

"This announcement should be taken with a large dose of scepticism, after all, it was only a matter of weeks ago Gorden Brown was claiming there were no losers from the 2007 budget - so was he being untruthful when he said there were no losers? Yes he was, so why should we trust him now? Is he as usual hiding a sting in the tail?"