Government spin over help for 10p tax cut

10.00.00pm BST (GMT +0100) Wed 23rd Apr 2008

Andrew Simpson, Liberal Democrat Parliamentary Candidate for Northampton North, has called the Government announcement about helping those affected by the 10p tax rate cut as a case of 'spin over substance'.

"The fact is that to fully compensate those affected by this disastrous policy the Chancellor would have to spend an addition £1.23 billion and yet he has not promised to help all 5.3million people affected." said Andrew Simpson "The Chancellors proposals are at best vague and at worst a case of spin over substance".

"The Chancellor says he will see if those 60-64 year-olds who have lost out can be compensated through the winter fuel allowance. Yet to ensure that all 600,000 people affected receive full compensation, the winter fuel allowance would have to be almost doubled from £250 to £482 at a cost of £120m

"He announced that he would investigate changes to tax credits to compensate people. However, currently people under the age of 25 are not entitled to tax credits. Furthermore, take up of tax credits by eligible people without children (one of the key groups who lose from the doubling of the 10p rate) is just 22%."

"The Chancellor has said that for people currently outside the tax credit system, he will consult the low pay commission on possible changes to the minimum wage:

o The minimum wage for 16-18 year-olds is currently £3.40 per hour, or £6,630 per year (based on 37.5 hour working week)

o The minimum wage for 18-22 year olds is currently £4.77 per hour, or £9,301 per year (based on 37.5 hour working week)

o The minimum wage for 22 year olds and over is currently £5.52 per hour, or £10, 764 per year (based on 37.5 hour working week)

Yet to ensure that all people on the minimum wage would no longer loose out from the 10p rate, the minimum wage would have to be increased for all people to £18,500 per year - or £9.49 per hour."

"Finally nothing seems to be being done until the autumn so people affected will have to deal with a cut their income until then whilst seeing increased costs of fuel, food and housing now"

"Local Labour MP Sally Keeble says people are being consulted over the 10p tax change yet if her Government knew what it was doing it would have realised the impact on people without having to ask them. This is just a way of trying to spin your way out of a crisis."