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Darling hints at tax cuts 'to help poorer families'
Paul Waugh, Deputy Political Editor31.10.08
CHANCELLOR Alistair Darling hinted at surprise tax cuts to help hard-pressed families today as Labour moved to outflank the Tories on the recession.
Mr Darling vowed that he would not put up taxes and repeatedly stressed that he wanted to put money into "people's pockets".
His words came as it emerged that he is being urged by Labour MPs to use extra borrowing to provide fresh tax relief for low-income workers in next month's Pre-Budget Report.
The tax offensive was part of a concerted attempt to exploit the perceived weakness of shadow chancellor George Osborne, with Labour MPs lined up at Treasury questions in the Commons today.
Last night the Chancellor signalled that borrowing would have to be brought down over the medium term, triggering speculation that taxes may have to rise or spending cut after the general election. When asked directly by GMTV today if he was planning to put up taxes, Mr Darling replied: "No. At a time like this when the economy is slowing down, it's right that the Government supports people, supports businesses. For example we are reducing the amount of tax that basic rate payers are paying, and we have frozen fuel duty this year." He added: "I really do think that at this time what you really do not want to do is to be taking the money out of people's pockets, especially at a time when people are struggling to make ends meet. I want to help people. That's one of the reasons of course why I reduced the amount of tax that basic rate taxpayers pay. It's very, very important."
Labour sources have told the Evening Standard that tax cuts would offer the "perfect" way of outmanoeuvring the Conservatives because the party earlier this year opposed the £2.7 billion rise in borrowing to help reverse the impact of the 10p tax row.
Mr Darling also confirmed that he will use next month's Pre-Budget Report to "reprioritise" some spending projects which will be brought forward to combat the downturn.
He told GMTV that rising incomes would help the public finances once the country started growing again.
He said: "As the economy comes through all this, we need to make sure that the budget comes back into balance. When the economy starts to grow you actually get more taxes coming in because businesses are more profitable, more people are in work and therefore the tax take is greater."
With new figures showing that Shell posted profits of £6.5 billion today, the Chancellor repeated Gordon Brown's call for oil price falls to be passed on at the petrol pumps.
Labour underlined its determination to exploit Mr Osborne's troubles over "Yachtgate" today as he appeared at the despatch box for the first time since the row blew up. MPs lined up in the Commons to quote from a Labour dossier highlighting the shadow chancellor's poor judgment on policy.
It claimed that Mr Osborne had failed properly to cost plans to give NHS patients their own hospital rooms, with new Department of Health figures showing an £8 billion black hole in Tory plans. Mr Osborne is also under fire over his policy on fuel duty, which committed a Tory government to putting up fuel tax when oil prices fell.
Mr Darling signalled last night that he wanted interest rates to fall further. Bank of England monetary policy committee member Danny Blanchflower also called on fellow members of the Bank of England's Monetary Policy Committee to cut interest rates aggressively as the US slashed its main rate to just one per cent. Mr Blanchflower complained that fellow MPC members had "not been sufficiently forward looking" in the past year.
Former Tory Chancellor Lord Lawson warned against tax cuts and said interest rate cuts were a better weapon against recession.
Reader views (15)
Let's get one thing straight, alot of so called "poorer" parents on benefits spend their handouts on booze and fags at expense of their kids, we all see them, let's not ignore it. They will be rubbing their hands at the thought of extra supplies of these and this will just fuel the anti-social behaviour problem in this country. If money is being handed out, only give it to "decent" people who deserve it. Infact anyone living off the state who's family has any record of anti social behaviour should have ALL their benefits stopped and the money re-directed to "proper needy" people. Anyone caught cheating the benefit system should also pay back EVERY single penny stolen off the state and if they haven't got it, sell all their assets. Perhaps if the country took these "proper" lines it might have money to give to "proper" people.
- Kezza, Brighton, UK
Tax cuts to help Labours voting base.
That means middle England will receive a huge tax hike to cover the costs of sponging "Chavs 'R US".
Corrupt sleazy Labour.
- Frank, Home Counties, England
What about the pensioners having to pay 20% income tax when it was 10% changed by this government. We are all poorer except the overpaid bankers who are going to have bonuses paid for by our tax money. Get your house in order.
- Maggie, London
Tax cuts for poorer families?
Oh sure, the boost to the earnings of brewers and tobacco manufacturers will be great, but it isn't going to fix an economy.
Tell me, is there an election coming up?
- George, London
It is not to "help poorer families" it is to bribe the traditional Labour voters into thinking this government cares about them, or indeed anyone other than themselves, and the thickos will think all is rosy and vote for them again.
- Dereck, London, England
We're all poor, Darling. Cut fuel duty for a start to show you mean business.
- Nobby Clark, Perth, Scotland
Sounds about right since Nu Liebour has done so much to create more poor people in the first place.
But I think that this proposal will certainly create more and deeper divisions in UK society. Divisions such as wealth creators or taxpayers ie 'Mugs' vs the state employees/state funded/ state supported mass.
So kudos to Captain Darling - way to ruin a once great country!
- Rusty Shackleford, UK
As Labour queue up to cast doubt on George Osborne's judgement, perhaps we should remind them who implemented the 10p tax rate abolition and hit poorer families when the credit crunch had started; had to do u-turns on 10p tax, company taxation and detention without trial. Labour is of course happy to spend infinite amounts of taxpayer money to prop up financial services as they know its highly likely that the next (non-Labour) government will have to find ways to pay for it.
- Ab, London
This is exactly right, Alistair. Tax cuts for low income workers is probably the best target for fiscal stimulus because they will spend the extra income imnmediately, thus boosting the entire economy from the bottom up. This is not a hand-out. It is simply letting them keep more of what they have earned. They will then spend it on what they need, thus benefiting that part of the economy which is serving their needs. The government will be in a much better position to balance its own books when the threat of a massive recession has lifted and the prospect of a growing economy returns.
- Blackstone Coke, London
Tax cuts for poorer families, what a con!!. The only people who will suffer because of 'tax cuts' will be the poorer section of the community. Fuel duty, green taxes,road tax, prices in the shops and the cost of public transport will all have to rise to meet the so called tax reductions. These essential everyday costs will have a disproportionately negative effect on poorer families
- Pip, Croydon Uk
yipee more money for beer!
- Iris, london
#Delphine.
You are not a good Samaritan then. How on earth are poorer families, which by definition include the majority of pensioners and widows with children, expected to pay for the increased public borrowing. They are the groups who are struggling most at this time. You obviously don't believe in helping those less fortunate than yourself, ergo you are a Tory.
- Val Daniels, Mijas Costa. Spain
Didn't we used to have this already? ... and wasn't it called the 10p tax band?
- Marianne, SW France
This cannot be true - somebody will have to pay for all this. And I tell you one thing - it won't be the "poorer families".
- Delphine, Oxford
Will these tax cuts make up for all the tax rises under Labour (e.g. 10p fiasco)? Or is this just spin?
- Ian, London
