A note on the personal allowance, frozen at £12750 until 2026.
When New Labour came to power, it was £4045 - and STILL only £5225 a decade later. Disgracefully, indefensibly low, and an indictment of Gordon "50p for pensioners/scrap the 10% tax rate" Brown.
When New Labour came to power, it was £4045 - and STILL only £5225 a decade later. Disgracefully, indefensibly low, and an indictment of Gordon "50p for pensioners/scrap the 10% tax rate" Brown.
The only major rise in the personal allowance throughout Labour's time in charge was from £5225 to £6035 when Alastair Darling was Chancellor. Credit to him for that.
Quickly increasing it was, of course, a Lib Dem policy in 2010, which the Tories quickly realised was popular.
Quickly increasing it was, of course, a Lib Dem policy in 2010, which the Tories quickly realised was popular.
So it hit 10K by 2014, a year earlier than even the Lib Dems had planned, and had hit 12.5K by 2019: a remarkable increase over one decade.
A personal allowance of just over 1K a month strikes me as pretty reasonable when inflation remains low.
A personal allowance of just over 1K a month strikes me as pretty reasonable when inflation remains low.
Critics argue that increases in the personal allowance are regressive in that they benefit better off people most. I think that's getting it the wrong way round.
Fundamentally, it's always been the right thing to do - and its level under New Labour was a damn disgrace.
Fundamentally, it's always been the right thing to do - and its level under New Labour was a damn disgrace.
Incidentally, it should say 'frozen at £12570' in the OP.
How do you take the poorest out of having to pay tax? By taking them out of making national insurance contributions - which start at a mindbogglingly low income threshold.
But to do that, you'd have to increase the amount of NI paid by the not particularly well off.
But to do that, you'd have to increase the amount of NI paid by the not particularly well off.
That's going to happen sooner or later given the epic pensions timebomb which will hit in the 2030s.
The 10% tax rate should also be brought back in my view. It's hardly beyond the wit of HMRC systems to do that.
The 10% tax rate should also be brought back in my view. It's hardly beyond the wit of HMRC systems to do that.
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