Downing Street Says

Asked for more information about the Government timetable and process for reviewing the impact of the scrapping the 10p tax rate, the Prime Minister’s Spokesman (PMS) replied that there was nothing more that he could say on this at this point.

Asked how the Government would characterise this change, the PMS replied that the Chancellor had said yesterday, and he had said this morning, that the Government wanted to do more to help low income people in future Budget and Pre-Budget reports.

Asked if the Prime Minister had changed his plans today to enable him to address the PLP, the PMS replied that matters relating to the PLP were a matter for his political colleague.

Asked if it was the Prime Minister’s position that defeat on any particular measure would be a motion effectively equivalent to a confidence measure, the PMS replied that he did not know what the exact parliamentary votes were going to be, but a vote on the Budget was an important vote.

Asked if the Prime Minister accepted that Budgets could be rewritten, as they were in 1994, the PMS replied that the Prime Minister accepted that obviously a vote on the Budget was an important vote. But he would also be explaining to his colleagues the strength of the case in support of the Budget 07 measures.

Asked if the Prime Minister was surprised at the level of discontent at the 10p tax rate, and did he think it was justified, the PMS replied that the Prime Minister, as he himself had been saying, thought that whenever significant reforms to the tax system were made, that was always going to raise issues. But we should remember that as a result of this reform we were able to cut the basic rate of tax from 22p to 20p, and we also provided in that Budget £3billion of support for an increase in pension allowances, an increase in the working tax credit, and an increase in the child tax credit. That was followed by another £1billion of support for increases in the Child Tax Credit, as well as increases of Child Benefit in the Budget that has just happened.

Asked that given this, did the Prime Minister acknowledge that perhaps it was just badly explained to Labour backbenchers, the PMS replied that as he had said, whenever reforms of this kind were made, then there were always going to be issues that arise. The Prime Minister and his colleagues were continuing to explain the rationale for last year’s Budget.

Asked if the Government accepted that further tweaking was necessary in light of what had happened, the PMS replied that he did not accept the premise of the question. The Government was always continually looking at ways to support low income families, that was something the Government had done consistently since 1997, and the Government would continue to do. Looking at just one snapshot of one measure in one Budget can give a very misleading impression of the Government’s intention, which was to continue to support low income families.

Put that there was a complaint that people on low incomes with no kids were being affected, and therefore did we accept that further tweaking was necessary in the context of an ongoing economic policy, the PMS replied that the Prime Minister accepted, what the Chancellor said yesterday, that of course the Government wanted to do more to help people on low incomes in future Budgets and in future Pre-Budget Reports.

Asked if the Chancellor and his colleagues should still be explaining what the 2007 Budget was about after 13 months, the PMS replied that if people asked them questions, then they were going to respond to those questions.

Put that the 2007 Budget had been around for over a year, and should the Prime Minister, Chancellor and senior Cabinet colleagues be going around explaining to backbenchers what it was all about, the PMS replied that it was understandable why these issues come back at the time they were being implemented, that was clearly why this had become a live issue again. It had not been a particularly live issue, and people were not raising that many questions, in the period between the Budget and recent weeks. Of course issues would be raised again once policies were implemented.

Put that people’s concerns of having a review were whether the Government and they shared the same analysis of what the problems were, the PMS replied that it was best to wait until a proper announcement had been made. Alistair Darling stated very clearly yesterday that of course we were going to go ahead with the measures set out in the 2007 Budget, of course we were going to go ahead with the reduction in the basic rate from 22p to 20p. But of course we also wanted as a Government to continue to look at what more we could do to help not only low income families, but low income households more generally.

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» Monday, April 21, 2008

Tax

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