How Gordon Brown is taxing the lowest paid more

CoinsCommenting on Gordon Brown’s budget, Liberal Democrat Leader Menzies Campbell said:

“The big increase in taxation is a doubling of the starting rate of income tax rate.

“The income tax changes announced in the budget will mean that anyone earning less than around £15,000 will pay more in income tax.

“The 2p cut in the basic rate is welcome, but let us be clear this is an income tax cut for the wealthy dressed up as a tax cut for the poor.

“While the Chancellor has taken some of the key headline policies from the Liberal Democrats, he has got the fundamental point wrong, we need tax cuts for the low and middle income earners now.

“Those on low incomes will now experience even higher rates of taxation and this will do nothing to increase incentives to work.”

In his speech to Parliament Menzies Campbell accused Gordon Brown of not doing enough for the hard working families, young professionals, nurses or police officers struggling with rising living costs. He said:

“The Chancellor had the chance to use this final budget to show that he was listening to the voices of the people of Britain.

“But he has delivered a budget of missed opportunities.

“He had the chance to build a fairer Britain through tax cuts for the low paid – but in fact he has increased income tax for the lowest paid.

“He had the chance to create a greener Britain by taxing pollution – but he shunned it.

“And he had the chance to shape a prudent Britain by saving billions of pounds on government waste – but he avoided it.

“Instead he has spurned all of these opportunities. He has concentrated on his own political succession.”

You can read more about Ming’s budget response and the real impact of Gordon Brown’s plans on the Liberal Democrat website.

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43 Responses to How Gordon Brown is taxing the lowest paid more

  1. Tibber says:

    Your comments would carry more weight with me if the Lib Dems were campaigning for a higher rate of tax on higher incomes and a local income tax to replace council tax

  2. William Ward says:

    I’m afraid Mr brown is a very canny scotsman, he says has reduced tax for low earners but he is telling lies, his get out of jail card is he has increased family tax credit, well that only works for families not single people, but here lies the crafty, most families wont claim this tax credit because for one you have to give up your right to privacy and secondly you are more likely to end up in debt to the revenue when they get it wrong.

  3. Claire Peach says:

    Yet again it is a London centric budget- higher earners get more, people who can get away with public transport win- for those of us who have no alternative but to run bigger cars (I have 3 children, two of whom are disabled) or who need petrol just to get to the shops suffer. Of course, I would drearly love a greener model- but the size of my student debt (and who created that clever idea?) prevents that.

    Those of us who live in the rural or semi-rural areas need to feel included. Right now, I don’t think many of us do.

  4. Philip Neale says:

    Firstly, I would like to take this opportunity to thank Ming for at least speaking up for those of us, who live in the real world and NOT the current fantasy world of Labour and Conservatives alike. Ming, you are quite correct in your statements, that the gap between those most vulnerable in society and those enjoying wealth, have widen more than people truely realise. Futhermore, I would go on to say that, whilst the Government has invested more funds into public services, it has been wasted by way of bad management in pursuit of greed. Those most vulnerable have been ignored and are treated as insignificant, more so such people are being typecast as “Dysfunctional” etc. The Government have and are playing simple math games, look after the majority and that will make the minority insignificant and of course people tent to forget the bad times they may have experienced. Governmetn wants people back to work, which I agree in princepal, but what about poor housing, afforadble housing and those families living in overcrowded housing. What about the poor standards of workmanship offered to council tenants, because of profiteering and racketering from tax payers?

    It’s not a well balanced society at all….

  5. Daniel Hardy says:

    If Gordon Brown has pulled a swift one on poorer families, then he aught to be ashamed, but I have to admit from what I’ve read in the budget itself i’m having a hard time seeing it. Infact, according to the BBC’s budget calculator (, a married man in his 50’s earning 15000 a year could be anywhere from 200 to 300 a year better off. Most of that is tax credits, which are a complete and utter mess. Even so, I still can’t see the evil that’s supposedly lurking between the lines, and so how are the general public going to see it. When Ming makes these claims, there should be hard and fast break downs able to prove it.

  6. Nicola Neale says:

    Shameful, Scandalous, Disgraceful, Despicable to say the very least and what an insult to those of us who are really suffering at the hands of this present ideology of constant GREED for those who already have 1, 2, 3, houses. Those that pay very little towards society funds, in fact most of the taxes come from those working class, because those middle class avoid paying. In all honesty, I think it’s great for those who do well and best of luck to them, but isn’t it about time the tables turned and they starting paying for what they have gained with little effort? Mind you I have to say Thank You Sir Campbell for raising issues of Poverty in the UK. I would just like to say, it would be nice if your local councillors and MP adopted the same attitude as your good self. I would say it would be foolish to miss the opportunity of collecting votes, because so many people are really suffering. I am one of them, in a 2 BOXroom flat with 3 young children and who gives a xxxx, excuse me:( As one of the previous posters said, I am insignificant and have no voice:(

    Ask your councillors and MP to start and stand up, speak out, shout and be pro active not sullen.

  7. Simon Bending says:

    Your analysis of Mr Brown’s final budget is, of course, correct although I suspect the final sentence will form the basis of many of tomorrows headlines.

    I write as a director of a small petrol station company paying corporation tax at the lowest level. We operate a sole service in a rural community which our government claims to be supporting. However this budget will substantially increase our corporation tax burden by raising the rate and curbing some of our capital allowances. Conversely our main supplier, an oil company, which recently announced record profits will benefit from a 2% fall in it’s UK tax burden.

    This chancellor will have lost the support of the small business community.

    Simon Bending

  8. Anthony says:

    The Government is supposed to be from the “Labour” party – and yet Gordon Brown’s changes to the tax system make those on low-medium incomes worse off – by making it so that you pay 20% tax on all your income over the personal allowance (which is only around £5K). You need to be earning around £17K before his other “tax cuts” mean you break even. If you earn less than that £17K you’ll actually be worse off.
    Lib Dem tax plans are to abolish the first tax band (earnings on which you would have paid 10%) and therefore make it so that you don’t pay any tax until you earn enough to take your earnings into the second tax band (% tax on any income over around £8-9K). This would prevent those on lower incomes losing out!

  9. Once again Gordon Brown is using conjuring tricks with his budget, giving with one hand and grabbing with the other one.
    Still the most unfair Tax is the Community Tax, there is no taxation threshold with this diabolical taxation, earnings or not you have to pay just the same.
    Irrespective of any earning or lack of them, unless a pensioner is on income support or benefit, the bill for the whole charge will keep coming through the door.
    In addition unless income support is awarded, the pensioner does not receive as much pension as those who have never paid into the system at all.
    In some instances a married couple with £135 per week total pension can be paying £45 per week in Council Tax with very little benefits for it at all.
    This must be Gordon Browns favorite tax because he can cause it to be increased to fit any occasion, the next one obviously is to charge extra for any improvements or value added to property since initial valuation.
    In addition the adjusting of valuation bands is already well in hand for enforcing as soon as the next election is over, a canny guy this Scot, but why is it presumed that he will inherit Blair’s woeful legacy, surely voters who elected Mr Blair as Prime Minister as well as those who did not, should have a say in who the next Prime Minister should be.

  10. marilyn donnison-morgan says:

    well said to Nicola Neale who is highlighting a problem that most people are ignoring and that is, having a decent roof over your head. The prices of the basic right to shelter are so high now that once again we are making a huge number of people homeless. I haven’t read anywhere in any political manifesto a real committment to affordable housing. Where’s the tax on people who buy-to-let – a practice that should be outlawed. I know that socialism isn’t a word in the dictionary of New Labour so I’m hoping that Lib Dems will pick up the chalice for those of us who are at the mercy of huge rents, sub-standard accommodation or crippling mortgages , to have something that should be an automatic right in the 21st century – namely Shelter.

  11. Eleanor Scott says:

    I just finished talking to a local journalist about the sleight of hand over ‘money for education’. Cities like mine need investment in the infrastructure for the lower paid, such as state schools (by which I mean lowering class sizes, not entering into bizarrely expensive PFI deals for new-build schools run by Burger-Zone-Creationists-R-Us) and employment space. Yet here we have Gordon Brown condemning another generation of the low paid to Tax Credit nightmares where it should be free of tax altogether, and to under-funded state schools where the class sizes should be halved. Personally I suspect that many parents would forego a new language laboratory at their kids’ school if they could just have lessons without twelve out of the twenty-four children screaming their heads off for attention all the time.

  12. The way things are going in this country under Labour in control, I’m surprised Gordon Brown didn’t pledge to provide a tent, a suitcase and a new passport for every citizen – because nobody can afford to live in this country anymore except the richest of rich.

  13. Fair Tax Not More Tax says:

    The Lib Dems want lower income tax for all, not just the rich.
    They have been advocating scrapping the 10p rate for months now, but unlike Labour they would do so by reducing it to zero rather than doubling it, so creating a tax allowance of c.£7,500. This would benefit all taxpayers, but the poor would feel the benefit most.

  14. Anthony says:

    It’s disgusting; Labour’s tax plans are just so that they can generate headlines tomorrow saying they’ve cut tax – their plans are nothing to do with making taxation fairer.

  15. John S. Biggam says:

    Instead of aboloshing the 10% rate of tax the chancellor should have extended it or, if not, increasaed the allowances to compensate so that the poorest earners should at the very least not be worse off. It says a lot about how the Labour Party has changed that it now favours the rich at the expense of the poor, the very reverse of what it used to stand for.

  16. Bill says:

    Could we please stop the myth that public sector workers are badly paid. You say in yoru statement that the budget does nothing to help nurses or police officers who are struggling with rising living costs. As far as I can see most of the increases in investment in the NHS are going straight out of the system in higher wages to staff and hence area having no impact on the quality of patient care. As for the poor policeman – he or she will enjoy one of the most generous pensions available anywhere.

  17. Jenny Barnes says:

    You don’t mention the waste of 9 billion plus on the olympics and 25 – 76 billion on Trident.
    “A billion here, a billion there, pretty soon you’re talking real money”

  18. Brigitte Palmer says:

    This is a scandelous budget! on a personal level this tax cut will really hurt my family, as my husband and I are on a lower wage, under £15k i because i work part-time(in the public service) due to childcare commitments and my husband as a small company. So we will get shafted by the changes in tax and the loss of the 10% starting rate and by the hike in corporation tax. why allow a tax cut for large businesses and a tax increase for small companies who are struggling enough already?
    And as for WFTC ( a real favourite of Laboour but a total nightmare) I dont know anyone who has managed to get any real money out of that if they are working at all, unless its an overpayment in error!! I have had a salary reduction of £15k due to taking a part time job as I was unable to get any flexibility with childcare and hours at my last employer and get no increase in working families tax credit at all, despite being now on well under £15k pa. talk about loose loose.
    Never have I wanted anyone to loose an election so much!!
    Lets ensure a fairer tax system for all, not just the rich and those with large companies.

  19. Barry Crosby says:

    I was hoping that such a “charity minded” Chancellor as Brown would have looked inland to the people working in Britain today. I think it is great he’s promising money to Africa, but has he not seen the price of housing, the basic living conditions of some families and the rising costs of council taxation?

    As a previous labour-voting (many moons ago) Public Sector worker, I feel fortunate that this budget has marginally benefitted me. However, I am desperately trying to get a foothold in somewhere to live and with no mention of tackling the inherent housing crisis for today’s young people, I feel very apathetic about my future.

    The announced Chancellor’s War fund, the recent decision on Trident and the lack of any real policies on climate change make it impossible for me to see a reason to vote for the party I grew up understanding stood for me.

    I trust that the Liberal Democrats will work hard to keep supporters and voters like me from regretting turning our backs.

  20. Claire Wilson says:

    My partner and myself both earn below the £15K mark, we live in Cornwall where the only real solution is to live in rented accommodation or move out of our county because the house prices are already too high for our income. This budget has not taken into any concideration that the majority of workers in Cornwall work on low wages and will therefore be worse off. Meanwhile, the rich will enjoy their effective tax cut, taking up more second and third homes pushing prices up, the water rates and council tax have increased yet again, making it even more unlikely that we will ever be able to afford our own home, let alone even save up for a deposit. Just existing with the high rent prices is enough of a worry as it is.

    Is this a fair tax system? I think not. The sooner Labour are out of government, the better.

  21. Ian Buckland says:

    I am sorry to say that as we are talking about TAXES i feel that the car driver has been yet again shafted. Yes i am a 4×4 driver and i dont want any sympathy but i do think it is totally unfair , this so called green road tax is not only going to effect me but a whole lot of people , yes i understand that some people by these bigger cars as a status image but there are those like myself who dont and we by them for a reason and a purpose , this tax is going to effect those who have bought mpvs , 4x4s , and those who have there pride and joy i.e the mercedes, bmw , porsche , audi etc etc , some have company cars so they wont worry about it but for those who have worked hard for there car what ever it is are not going to be happy and this includes those who have retired, those whom have bought such vehicles have already paid there taxes in extra insurance , running costs i.e fuel , tyres , exhaust systems , i honestly feel that there was no real study case in this what so ever and no thought on how many people that this is going to effect country wide. so i really hope that this is the end for the labour government as they could have looked at air travel and other options and fairer options.

  22. Angie Keen says:

    Hi, I’m new to all this but I’m fuming over this budget, I feel like doing something but I don’t know what. Any suggestions – write my MP? (who’s a labour MP).

  23. Mark P says:

    Ann: you can lobby your MP via – and of course if you like what the Ming and the Liberal Democrats have said about the budget you can join or help the party at

  24. David McAdam says:

    I have to be honest, I don’t find this budget to be any surprise. Mind you, that’s not to say I like it. It comes with the usual assortment of increases in taxes (overall), duties and spending.

    Yet it still irates me to the extreme when we’re throwing money at very unpopular decisions, nuclear related, war related, energy related and 1984 related.

    More money gets thrown at the NHS and apparently it still doesn’t work properly. What I’m curious about though is when there’s fussing about how much doctors and nurses get, when doctors and nurses get laid off to cut costs… what about the management of hospitals etc? Do they get chopped too? Did they get any decent pay rises? Curious…

    Bottom line about this budget is… If you’re planning to call a snap election then you need to please the voters on whom you will rely. I’m not one of them and I’m not impressed by this budget.

  25. Brendan Webster says:

    My wife and I are both 61 and unemployed. My wife gets the Old Age Pension worth about £4,500 pa, I get a very small civil service pension of about £3,000 per year (10 years service then frozen/RPI-linked for 25 years) and we have property income of about £5,000 pa plus a few hundred pounds interest. In effect our expected income tax has doubled. We also have two old cars, not four-wheel drive. The newer of the two has a large engine and has depreciated from about £16,000 two years ago to £10,000 pre budget and with the increased road fund it will depreciate even faster, probably 30% this year instead of 17% (despite doing only a couple of thousand miles per year in it).

    My remaining modest pension fund has performed poorly and with annuity rates very low I feel myself to be a pension-loss victim. In the order of a 15% to 21% pension contributions have been paid in but I do not have a failed company pension scheme and will not therefore benefit from government assistance. There must be millions like me who have private pensions which will deliver well less than half of a reasonable initial expectation. I am delaying drawing it in the hope it will perk up and that I get some paid work.

    We are effectively living off our savings which excludes us from work/pensioner’s tax credit also we have an £175,000 (offset) mortgage offset by equivalent savings which we hope to use to eventually allow us flexibility in cash management to down-size our house. The savings are not ‘real’ but exclude us from tax credit.

    All in all, we expect to be close to £800 tax and £2,000 extra car depreciation and road fund making a total of £2,800 worse off out of an income of only £13,000. I am hoping to get some freelance work this year but have not succeeded yet. I expect the increased business tax and other changes will ensure I lose again.

    Car Tax: The increased in road fund licence for large-engine cars together with increases in car parking charges (some areas – sadly Lib Dem inspired) and have effectively increased the depreciation of these vehicles such that they will end up in the scrap heap by the time they are five to ten years old. The owners of, say, a second-hand four or five year old car are generally not well off and their first or second largest asset is effectively written off.

    Insulation Grants: Up to now, I have never been able to get help with insulation on my house. I expect the help indicated in the budget will be for others but not for me despite my house being a very energy inefficient six bedroom three story semi.

    I feel like a victim.

  26. Alison Smith says:

    I come from a lower middle class family. I worked hard at school and I worked part-time to get myself through an ex-poly University. I left at 20 with a first class degree and £10,000 in debt. When I came to look for my first full-time job, I found the job market so competitive that I had no choice but to enter a low-paid clerical position. Now six years after graduation I am earning less than £15,000 a year. I am using a quarter of my income to pay tuition fees towards a distance learning postgraduate qualification to help my career, which I am studying for as well as working full-time. My partner and I live in a one bed flat. We cannot buy our own flat, cannot get married, cannot have children because there is so little money left after income tax, utility bills, rent and council tax that we are financially crippled. We are as worse off as we would be on benefits, or as we were as students, the only difference being that we both work full-time. Now we hear the basic 10p tax rate for low-earners is to be scrapped, and we will now lose 20p in the pound to the tax man. Now I’m left with only one question. Why do I bother?

  27. Angie K says:

    Mark P: Thanks for the info. I joined the Lib Dems a few years ago but have never really did any more. I’m going to take a good look at the website to get involved a bit more – its time to stop moaning about the state of the country to taxi drivers and get off my backside!

  28. Brendan Webster says:

    I just reread what I wrote (above). The £800 of course includes both increases in income tax and road fund licences on two cars. I also realise that it won’t take effect overnight. The total worsening of our situation including the “green” depreciation of cars remains very severe.

    Bashing current car owners is regressive. I am surprised by Lib Dem policy in this respect. By all means tax fuel but do not tax existing vehicles simply because they exist. All this is being done is to drive them into premature scrap. The very wealthy will be impervious to the tax and will often be able to reclaim the increased cost per mile against tax. The less well-off owners of second-hand 4 and 5 year old group G cars will lose their hard earned money. Why not tax or regulate the production of new vehicles. That would meet the objective of reducing the number of large cars without penalising existing owners. Fuel tax would help reduce everybody’s excessive miles driven.

    By the way, I have joined the Lib Dems and hope to stand for election for the Council this May. One will never find a party that aligns 100% with one’s views but it is better to participate in politics than to moan from the sidelines.

  29. A P says:

    Alison: I’m in almost an identical position to you – I never thought i would say this but sometimes I really regret doing my degree. At least if I had stayed in a dead end job my aspirations for a better standard of living would not have been raised. Instead I have a massive debt and i’m still in a **** job while trying to get funding for a postgraduate qualification because having just a degree gets you nowhere.

  30. E. Gray says:

    Not for the first time for all the synthetic rant from the Tories the Lib dems pointed out that that the Labour have made those who one would have thought would have been their natural supporters worse of by scrapping the 10% Tax Rate.This surely shows that we have two versions of the Tory Party one calling itself New Labour and Dave and his mates on the opposition front bench.I always thought that it was the duty of Opposition to hold the Government to account.I watched the budget yesterday and there was only one person who did that and actually asked pertinant questions and did not deliver the usual rant, that was Ming Campbell.For his pains he did not get a proper awnser so much for our democracy at the moment, but well done Ming.

  31. Migeru says:

    That is a good critique, but sadly I don’t see the press paying attention to what the Liberal Democrats have to say. It’s all about the gloating of the Labour backbenchers and the anger of the Tories.

    More media projection, Mr. Campbell.

  32. cllr john deas says:

    the phrase “indian giver” springs to mind.
    by all means give a 2% cut in income tax, but why take it all back (and more besides)
    by abolishing the 10% starting rate?!?!?!?

  33. Peter says:

    I thought the Cameron reply was the thought of a man who feels he is already in a coaltion with Blair. Good to see that Ming spotted the Brown dodge.

  34. Ben Tyler says:

    Your message promotes strong sympathy for working families struggling with rising living costs and the young couple hit by rising interest rates.
    Isn’t it time that you did the maths and dropped the LIb Dem policy of a local income tax which will cause massive further pain for low income (young) working couples?

    Lets have sensible policies; lets get ourselves elected!

  35. Bernard Ellis says:

    Please Mr Campbell keep up the pressure on the government over this disgraceful
    budget.Millions on low incomes will be worse off and the public needs to be
    reminded of this as often as possible.
    The budget signalled a change of direction for the labour party in respect of
    their treatment of the less well off and this is a weakness that must be exploited
    by the liberals,

    Bernard Ellis

  36. NickisPlight says:

    Hey! I notice so many people are say’in more or less the same thing here, so may I ask why are you not taking any actions?

    I would like to say the Sir Ming Campbell, thank you for highlighting this issue. Of course issues like this have been highlighted recently by UNICEF and dare I say it? even IDM Conservative, but noetheless. Poverty issues are being used as Headliners, attention grabbers and mores the point Poverty is a Political Toy. It is scandalous that so many people are being targeted and branded by this Governments ideology. Merely because they are NOT prepared to address such issues with any seriousness. The current ideology has created a modern day workhouse, by way of people working in large retail outlets. The Government intends forcing people back to work, but they are avoiding important issues, such as Poor Housing, Overcrowded Housing, Affordable Housing, all of which has greatly contributed towards our insecure society.

    I would like to say to one of the posters above “cllr john deas”, their has never been a greater opportunity for the Liberals to gain large amounts of ground. Based upon my own local Liberals fighting a Conservative stronghold, Liberals will lose, because they do NOT have the drive and determination to win, now that’s a shame.

  37. Robert J W Waller says:

    If I’m going to change from Labour, I want to see real change. If they call themselves the 15K party and worry about the standard of living for 15K people getting better and let the old have fun.
    The armed forces are needed bouncing out hostiles and building a public transport system here and what could be greener than that.
    Averages, mean forecasts, median statistics, Retail Price Index, Consumer Price Index, Averege Earnings Index and bullshit never stopped mistakes or started fooling anyone.
    There is a vacuum where no political party exists, one which will champion those on 15K who want their living standards to get better, who want more cash to spend. A party to raise the standard of living for the old and working poor, So do it Ming do it please.

  38. Cllr. Connie Fozzard says:

    A shameful element of the budget,which does not seem to have been addressed by contributors to the site, relates to the effect of the 2p drop in the standard rate of income
    tax on charitable contibutions. An assessment of the loss of income to the charities has been made at £ 2m. The headlines of the budget proposals seem to have been more carefully addressed than consideration of the effects on taxpayers of the loss of the 10p rate and on charities of the drop in the 22p standard rate. Was this effected by design or by negligence on the part of the Chancellor ?

  39. Robert Meredith says:

    I am absolutely furious with this increase, this is going to hit me hard – i am under 25 and therefore ineligable for tax credits, council tax nears a grand a year, food and energy costs are rising; despite working 50 hour weeks on minimum wage I will have nothing. And even if i wanted to go to univeristy and attempt to get a higher wage, i’d be wacked with £3,000 a year tuition fees and a life long debt running into the tens of thousands. Funny how billions of pounds suddenly become available when private banks fail or foreign oil investments look precarious though isn’t it? Kudos, new labour.

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