10p tax rate debacle

Credibility lost over political blunder

Published:

UNION leaders and backbench MPs were queuing up to congratulate Chancellor Alistair Darling yesterday on his solution to the 10p tax rate debacle. It was a crude but effective move to raise individual personal tax allowances to try to redress the balance lost when Gordon Brown scrapped the lower rate in his last Budget.

Everyone will gain and 4.2million households out of the 5.3million who suffered will receive at least as much as they lost originally. But the back slapping and congratulations are not deserved.

Mr Darling and Mr Brown have together served up one of the biggest political blunders in recent times.

Their only recourse was to risk upsetting the finely-balanced national finances to give back some of their ineptly-gotten gains.

It might put a lid on the story for a while, but Mr Darling and Mr Brown have lost credibility.

Taxpayers may well be happy with the deal, but the true price of the £2.7billion U-turn will not be known until its effect on the economy is clear. Messrs Darling and Brown are not out of the woods yet on this one.