MP Challenges Labour Tax On Low Income Residents

1.00.00pm BST (GMT +0100) Mon 14th Apr 2008

Liberal Democrat MP for Withington, John Leech, has condemned Labour tax changes which will leave thousands of Withington's poorer residents significantly worse off.

"At a time when people are struggling to cope with increases in electricity and gas bills along with soaring food and transport costs, the abolition of the 10p starting rate of income tax means many hard-working people will struggle to make ends meet." John stated.

On April 6th plans set out in Gordon Brown's final budget as Chancellor came into force, doubling the starting rate of income tax from 10p to 20p in the pound.

Under the new tax system 5.3 million people in Britain will be worse off than before, including unmarried young people on a low income and many pensioners aged 60 - 64.

A single person earning less than £18,500 per year, with no children, will be a loser under these changes, by up to £232. As will those who've taken early retirement, and part-time workers ineligible for tax credits.

In contrast, the headline-grabbing 2p cut on the basic rate of income tax, that these changes have funded, will leave those in higher income brackets substantially better off.

Mr Leech pointed out, "That a Labour government, which was elected on principles of fairness and reducing poverty in Britain, can effectively introduce a measure which is taking from the poor to give to the wealthy is a sign of how far its standards have slipped."

Liberal Democrats plan to reduce the tax burden for those on low income by scrapping council tax and replacing it with a local rate based on ability to pay, while cutting the standard rate of income tax by 4p in the pound. This will be paid for by closing tax loopholes used by the wealthy and increasing green taxes on the country's biggest polluters.