Pre-Budget Report: Darling's £5bn tax hike will hit low

4.37.00pm GMT Tue 25th Nov 2008

Councillor Robin Lawrence

The Chancellor should have cut income tax to make the tax system permanently fairer, say Wolverhampton South West Liberal Democrats.

Commenting on the Pre-Budget Report, Liberal Democrat Councillor Robin Lawrence said "The Government acknowledges that the UK tax system is inherently unfair, but then announces that it will hit those struggling to make ends meet with yet higher tax bills by increasing National Insurance.

Everyone earning over £19,000 will be hit. The new 45p Income Tax rate is nothing more than a fig leaf to cover a £5bn tax hike which will hit millions of low earners and businesses. The Government has missed a golden opportunity to make the tax system permanently fairer which it could have done by cutting income taxes for those on low and middle incomes, paid for by getting rid of tax loopholes for the wealthy.

Robin added "Instead of increasing investment in sustainable capital projects which benefit the country tomorrow as well as today, the Government has opted for a temporary cut in VAT which will benefit big spenders the most and not give the economy the boost it needs. What I fail to see is how the economy receives a major stimulus from, for example, a £5 cut in the price of a £220 imported flat-screen television or a 50p cut in a £25 restaurant bill. Surely it would be much more sensible to put money directly in the pockets of low-paid workers by cutting their income tax, rather than offering them a pathetic £25 and, if they earn over £20,000 a year, the prospect of tax increases."

Robin concluded "At a time of economic emergency, Gordon Brown has once again failed those who need help the most. Many families in Wolverhampton South West will be worse off under this Pre Budget Report that they were before it, how is that fair?"