Osborne's new dividing line: a 0% tax rate against a 10p tax rate

The Chancellor appears to rule out a 10p tax rate for the Budget and says raising the personal allowance is "a better policy".

Ed Miliband's pledge to reintroduce the 10p tax rate has left the Tories with a dilemma. Having previously hinted that they might adopt the measure, which was first proposed by a Conservative MP, Robert Halfon, do they seek to match Miliband's offer or do they reject it? 

It now looks as if George Osborne has settled on the latter option. In his interview on ITV's The Agenda last night, the Chancellor declared that the coalition had "a better policy" - "a zero per cent tax rate". He pointed out that the increase in the tax-free personal allowance from £6,475 in 2010 to £9,440 (from this April) had already compensated all of those who lost out from Gordon Brown's abolition of the 10p tax rate, adding: "We've taken a million people out of tax altogether so I would say a zero per cent tax rate is going to be a little bit more attractive at an election than a 10% tax rate and that's certainly been our priority."

Coming from the man who remains the Conservatives' chief election strategist, it was a significant statement. The Lib Dems have long made it clear that they will go into the next election promising to raise the personal allowance to £12,500, so that no one on the minimum wage pays any income tax. Osborne's words suggest that the Tories are now more likely to match this offer than are they to cut the starting rate.

It's not an approach that will please all Tory MPs. Halfon is fond of quoting former Conservative chancellor Nigel Lawson, who began his time at the Treasury by raising personal allowances but later reversed direction. He later explained: "I wished to create a large constituency in favour of income-tax reductions. The last thing I wanted to do was to reduce the size of that constituency by taking people out of tax altogether." But the imperative for the Tories to differentiate themselves from Labour now trumps this concern. 

With two years of the parliament remaining, the tax threshold is just £560 from the coalition's target of £10,000 after a larger-than-expected increase in the Autumn Statement. If Osborne chooses to pull a rabbit out of the hat on Budget day (as he usually does), one wonders if it will be to meet this pledge ahead of schedule. Having unambiguously rejected a mansion tax and now cast scorn on the 10p tax rate, the Chancellor has shown that he has no intention of dancing to Labour's tune. 

Chancellor George Osborne leaves 11 Downing Street on January 7, 2013 in London. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Jeremy Corbyn ends 2016 with victory - for Parliamentary Beard of the Year

The award's founder thinks Tom Watson could still beat him, though. 

Jeremy Corbyn may be facing a by-election backlash, but there is one area in which he is the undisputed victor - the Parliamentary Beard of the Year awards.

Corbyn has held onto his title in 2016 thanks to a "beard and eyebrow combo" that left facial-hair lovers watching Prime Minister's Questions stunned. 

The Opposition leader scored a similar victory to his recent leadership election, with more than half the poll. It is his seventh win since 2001. 

Keith Flett, the spokesman for the Beard Liberation Front which awards the prize, praised Corbyn for leading the way in acceptance of unshaven politicians.

He said: "It used to be tough to scrape together a list of 10 MPs. That is no longer a problem.

"I am not sure you hear people saying 'I wouldn't vote for Corbyn because he has a beard', which you would have 20 years ago."

Flett believes many more MPs could have had a shot at victory, if they would only dispense with their razors.

He said: "We always thought that David Cameron would have been vastly improved by having a beard. but there was always some doubt as to whether that was ever possible."

Flett also mourns the demise of Labour deputy leader Tom Watson's beard, which clinched the prize in 2009.

He said: "He had a magnificent beard, which he subsequently shaved off, because he claimed his partner didn't like it, and he has refused all entreaties to regrow it.

"We had a conversation recently where he said the key thing he had in common with Corbyn was they both won Beard of the Year."

 

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.