Uncley Audley lectures on the loss of the 10p tax band

I called in on Uncle Audley on the way home last night and he opened the door sporting a contented smile. He was watching the tail end of the early evening news. “I see the chickens are finally coming home to roost. Labour backbenchers are up in arms about the loss of that 10p tax band. As I understood it Brown introduced the band himself in an effort to get folk back to work and having succeeded then withdraws it in his final budget. That was over a year ago. Now on the day it gets implemented the backbenchers are moaning having taken all this time to do their sums. What a shambles. What have they been doing apart from eating and doing sums on their mortgage interest?

It’s just like that thing with the Northern Rock. Gordon Brown set up his tripartite system with the Government, The Bank of England and The Financial Service Authority and almost immediately it was hailed as a masterstroke and a great success, not least by Mr Modesty himself. It reminds me of when Deng Xiaoping, the Chinese Leader, was once asked whether the French Revolution was a success. Deng replied “It is too soon to tell”. We have had to wait ten years for the first real test of Brown’s new system and it failed. In the old days, Northern Rock’s liquidity problem would have been resolved behind closed doors over the weekend and no-one would have been any the wiser. Unfortunately this tried and trusted approach was not an option under the new system.”

I was about to remove my scarf and coat when Audley continued; “Did he not also do the same with company tax after putting in a £10,000 free of tax band he removes it because it did not achieve the desired effect in attracting companies to the UK but has every corner shop owner incorporating to avoid paying any tax at all. He finally gets the principle right by reducing the main rate of corporation tax to 28% but all small companies have to have their rate of tax increased to 22% to pay for it. Surely that also risks the working man’s business if they don’t come and the smaller company cannot pick up the payment? When will backbenchers realise this point? Or will it be lost on a group that have never worked a day in their lives. No wonder the thought of completing expenses in a responsible and proper manner defeats them!

What has always annoyed me about Mr Brown is the man’s lack of largesse. He claimed the credit for the prosperity of the British economy. Some of us though that Ken Clarke’s sound stewardship of the economy over the previous few years was a factor. We also thought that the situation in the world economy with the IT revolution and a growth in the Chinese economy in fact has been helping to push costs down and keep inflation under control. No, according to Gordon. It was all down to him. We may be due for some proper historical revisionism now. I compare him with Sir Isaac Newton. When asked about his achievements, Sir Isaac responded “If I have achieved anything it is only because I have stood on the shoulders of giants”. Sir Isaac or Gordon? I know which one I would take.”

“Good Evening Uncle Audley”, I said, “is there any chance of a cup of tea?”

Date:8 April 2008