10p or not 10p? – that is the question
After weeks of controversy, the Government has today announced that there will be a compensation package to deal with the effects of the abolition of the 10p tax rate on certain low income groups.The compensation deal will be unveiled in the autumn and backdated to April. As a result, Labour MP Frank Field has withdrawn his amendment – due to be voted upon on Monday – backed by 46 Labour MPs calling for compensation.
The question which I find myself asking is: why were the effects of this tax change not appreciated at the time it was announced a year ago, instead of only after the tax change was actually implemented? Indeed why didn’t the Treasury comprehend the impact before the Chancellor announced the decision? Surely the first thing Treasury officials do when a Minister looks at a tax change is to assess who will gain, who will lose, and by how much. Perhaps officials did advise Ministers and the advice was ignored.
The truth is that Frank Field – whom I first met before he was an MP and when he headed the Child Poverty Action Group – immediately recognised the impact and tried to draw attention to it – but nobody (including the then Chancellor and now Prime Minister and the media) was listening. There’s a lesson for us all here: don’t rubbish a message because you don’t like the message or the messenger; only oppose a message if it is wrong and you are sure it is wrong and, if you’re not sure, check the situation with an open mind..