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Spinning chancellor gets Labour tied in knots

April 24, 2008 12:00 PM
Gordon Brown

Brown's last budget has tied the government in knots

The Chancellor today pledged to help low income families who were made worse off as a result of the doubling of the 10p tax rate - a spinning yarn that has tied the Labour government in knots.

Despite press reports suggesting otherwise, the Chancellor has not promised to ensure that all of the 5.3m people on low incomes who have lost out as a result of the Budget will be fully compensated.

The Liberal Democrats have revealed that if the Chancellor is to ensure that all people are fully compensated from the abolition of the 10p rate, the Exchequer will have to spend up to an additional £1.23bn

o The minimum wage for 16-18 year-olds is currently £3.40 per hour, or £6,630 per year (based on 37.5 hour working week)

o The minimum wage for 18-22 year olds is currently £4.77 per hour, or £9,301 per year (based on 37.5 hour working week)

o The minimum wage for 22 year olds and over is currently £5.52 per hour, or £10, 764 per year (based on 37.5 hour working week)

For all the spin the facts are clear. Those unable to claim tax credits or Pension Credit and earning less £18,500 are now seeing their income tax bill rise. For a Labour government to have a tax policy the penalises the worst off is an absolute disgrace.