Gordon's Pensioner Tax

In what is being billed as his last budget – unless, of course, he doesn't make it to the top – Grumpy went out with a tuppenny flourish, announcing in his final sentence a 2p cut in the basic rate of tax. Clearly he expected that the press and everyone else would have gone to sleep during the boring bit with all the statistics and pre-announcements of distant changes, and hoped that the papers will be proclaiming him tomorrow morning as a tax cutting Labour Chancellor. There was predictably plenty of whooping from the Labour benches.

Sadly for Gordon, though, everyone seems to have noticed that he has eliminated the 10p tax band, which he himself introduced to ease low earners more gently into the tax system. The effect appears to be that anyone now paying tax and earning less than £18,000 per year will be paying more tax. And anyone now paying only tax in the 10p band – which I think is up to about £7,500, or £9,000 for people over 65 (I stand to be corrected on the precise figures) –  will now pay twice as much tax. That includes many pensioners with modest private or company schemes.

How appropriate that the so-called champion of the poor should make his Pensioners' Tax his 100th increase. What better way to encourage people into work than to increase the tax on them doing so.  And who would have thought that a Labour Chancellor would be increasing the tax on the poor to give more to high earners. Perhaps he's Tony's friend after all, and wants him to be able to hang on to more of his book and speaking deals.