by Chris McLaughlin
THE U-turn on the 10p tax rate was universally welcomed by MPs and trade union leaders as a sign that the Government is beginning to act on, and not just listen to, the concerns of voters over the thrust of social policy and taxation.
The move was followed by the unveiling by Gordon Brown of a draft Queen’s Speech designed to show that the Government is capable of addressing bread and butter issues such as housing and financial security.
Both initiatives came as the campaign for the Labour seat of Crewe and Nantwich entered its final week, amid Tory claims that the Government was motivated by electoral panic, though there were few signs that the chances of saving the seat have been improved.
After weeks of stating that it was impossible to re-write a Budget, Chancellor Alistair Darling produced an emergency mini-Budget to reverse the effects of the axing of the tax rate for most of the 5.3 million lower earners hit by the change.
But there were concerns that up to one and a quarter million of the very worst off will still be among the losers and Mr Darling is under pressure to ensure that their plight is addressed in the autumn pre-Budget statement.
While the moves took some of the heat off Mr Brown’s leadership troubles, many MPs believe he has to solve deep-seated problems in his style of leadership and presentation. Union leaders who welcomed the emergency Budget also delivered broad hints on the need for a wider re-engagement with the electorate.
Just over 600,000 lower earners will be taken out of taxation and the level at which the 40p rate is paid would be lowered so higher earners would not gain or lose from the change.
Community leader Michael Leahy said: “Increasing the personal tax allowance is the most sensible, straightforward and easy to understand way of making sure that low-paid workers and their families are not worse off as a result of the abolition of the 10p rate.
“It is clear that the Government made a mistake but they have listened and acted. I hope that the Government will now listen more to its friends and supporters and show that it understands the real issues of concern for millions of British families and that it is committed to addressing them.”
Dave Prentis, general secretary of Unison, said: “It shows that the Prime Minister is listening to the concerns of low paid workers.”
Tony Woodley, joint leader of Unite, said: “Reconnecting with Labour’s social conscience in this way is a major step towards reconnecting with voters generally.”
