Downing Street Says » 10p Tax Rate

Asked if there had been any developments regarding the 10p tax rate, the Prime Minister’s Spokesman (PMS) said that presently he did not have much to say about this subject. As journalists were aware, Yvette Cooper had said on Monday that the Government would extend its programme of work on the next stage of support for low income households with children to include consideration of individuals and households on low income without children, but it was for the Treasury to set out any further detail on the process.

Asked if the Treasury would do that today, the PMS replied that it was a matter for the Treasury and that journalists should check with them.

Asked if there had been a conversation between the Prime Minister and the Chancellor last night about the 10p tax rate, the PMS said that the Prime Minister and the Chancellor talked about all sorts of things everyday, as you would expect.

Asked if it was the case that the Treasury was authorised to clarify the present position but was not authorised to change policy without the prior knowledge of the Prime Minister, the PMS said that what he was saying, quite clearly, was that there could be no question of not going ahead with the abolition of the 10p rate of tax; that was the right thing to do. The 10p rate of tax was introduced as a transitional measure in 1999 and since 1999 tax credits had been extended and become more generous. Therefore, in order to target support directly on low-income households, the 10p tax rate was abolished in the last Budget and that enabled us to reduce the basic rate of tax. For further clarification or detail on the existing position and for any further clarification on the Yvette Cooper announcement on Monday, it was best to go to the Treasury for advice.

Asked what it would require for the Chancellor to increase tax allowances, the PMS said that any statement from the Chancellor of the Exchequer was an agreed position of the Government.

Asked if it was the case that the position had not been agreed, the PMS said that whenever Alistair Darling made any statement about Government policy it was an agreed position.

Asked if the Prime Minister believed that there had to be losers and that that was a natural consequence of the abolition of the 10p tax rate or if he believed that it was unfair to penalise people who were at the bottom end of the pay scale, the PMS replied that this had been discussed during Monday’s lobby briefing but that he could discuss it again if the journalist wished. When undertaking a major tax reform of the type that we saw in the 2007 Budget then of course that would affect different people in different ways. You could not just look at one measure in one Budget in isolation; you had to look at the Budget as a whole, but more importantly, you had to look at what the Government had done over 10 years and what the Government would continue to do in the future.

Put that the Government’s active persuasion did not seem to be working as there were more rebels than there had been yesterday, the PMS replied that we should wait and see how the situation developed over the coming days.

Asked if the Prime Minister had planned any further appeals or meetings with his party over the next few days, the PMS replied that he did not accept the premise of the question but went on to say that the Chancellor had met with MPs yesterday and that the Prime Minister met with MPs all the time.

Asked if the PMS could confirm that the Chancellor was going to make a statement, the PMS replied that he was not in a position to confirm anything until the Treasury made an announcement, as he was not spokesman for the Treasury.

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» Wednesday, April 23, 2008

10p Tax Rate

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