Commenting on this afternoon’s announcement by Alistair Darling MP, Chancellor of the Exchequer, that the Government will increase personal allowances by £600 to offset the impact of the abolishment of the 10p rate on 5.3 million low earners, Michael Leahy, General Secretary of Community, said:
‘Today’s announcement will be welcomed by Labour supporters and the 5.3 million people – including Community members – who stood to lose out as a result of the decision to abolish the 10p tax rate. Increasing the personal tax allowance is the most sensible, straightforward and easy to understand way of making sure that low-paid workers and their families are not worse off as a result of the abolishment of the 10p tax rate.
‘The decision to back-date the changes to April is particularly welcome, since it means that no-one will lose out. Taking 600,000 low-earners out of the taxation system is also a progressive step. The Government should continue to do this so that the lowest-paid do not suffer from high levels of marginal taxation.
‘It is clear that the Government made a mistake, but they have listened and acted. I hope that the Government will now listen more to its friends and supporters and show that it understands the real issues of concern for millions of British families and that it is committed to acting to address them.’