High tax, low pay

£10K personal allowance

This last week has seen a variety of Tories promoting the idea that the low paid should be relieved from tax, freed from the benefit system and paid more to ensure that there are proper incentives for work.

On Wednesday Maurice Saatchi published his CPS paper “Enemy of the people”. It is presented as a legal indictment of the Labour government.

For me this device is a little tedious but the case he makes is compelling. It is essentially that Labour’s tax and benefit system is a fraud on the poor.

On Thursday it was Mayor Johnson announcing a rise in the London Living Wage to £7.45. Ealing council supported this policy even when it was Ken Livingstone’s, see here. Nowadays council leader Jason Stacey is quoted in the Mayor’s press release:

We support the Mayor’s plan to give hardworking Londoners a living wage. In Ealing we have already introduced a living wage for our dinner ladies and we will be renegotiating other contracts with suppliers when they come up.

This is about making work pay. It is better to see people working and doing something useful and earning a decent wage rather than being dependent on the state through benefits.

Finally, on Friday ConservativeHome was repeating a story from the Express that the Tories will be promising to raise personal allowances to £10,000 at their conference in October.

I wrote a piece advocating a £10,000 personal allowance for ConservativeHome back on March 1st last year.

One reply on “£10K personal allowance”

I certainly agree with raising the tax threshold so that anyone earning less than 10,000 per year pays no tax at all. And the whole Tax Credit system which Gordon Brown introduced is far too complicated to the point of being absurd and should be abolished. Tax should be simple and easily understood and the Tax system should be based on that principle.

But back to the London Living Wage which is an attempt to recognise that the National Minimum Wage is not enough in London so London needs its own version of the Minimum Wage. This Labour Government have complicated the issue even more by abolishing the 10p Tax band so of course people on low wages need to be paid more. None of this would be necessary if people on these sorts of wages didn’t have to pay Tax at all.


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