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25 April 2008
The Rt Hon Alistair Darling MP
Chancellor of the Exchequer
HM Treasury
1 Horseguards Road
London SW1A 2HQ
Dear Alistair
I`d appreciate an urgent response to some of the questions which have arisen in the ten percent tax saga plus a comment on the processes.
(1) I am assuring the constituents who wrote to me that the compensation, which is to be paid along the lines indicated in your letter to the Treasury Committee, will be backdated and cover the full tax year back to 1 April. Can I have your assurance that this is indeed the case. Yvette Cooper on Newsnight appeared to case some doubt on this.
(2) I am asked what provision is being made for compensating Carers who are a particularly hard pressed group. What are we proposing here?
(3) Doubts were raised about the effect of the abolition right from the start, for example by Lynn Jones. Why were these dismissed? Why were Ministers so confident that no-one would lose out? What research was done on losers and gainers and why were none of us prepared for the storm which hit us when people checked their tax? I was personally surprised at the number of letters. The protest appears to have been spontaneous and tells me that people pay a lot of close attention to their returns. But it shouldn`t have taken us by surprise. We shouldn`t have been so blithely assured that all was well.
(4) Why at this late stage can`t we do the obviously necessary thing and raise the allowances so as to take these people, indeed millions of people, out of tax altogether? I`d be interested in a comparison of the costs of the compensation now envisaged as against the costs of, say, a £300 increase in the allowances.
(5) There`s no doubt that this has been a major cock-up. Not your fault, of course. You inherited it and have dealt with it effectively at this late stage. However, when there`s a cock-up on this scale it should be dealt with by an apology. We got it wrong and should say so. Will one be made?
(6) Tax policy, as on Non Doms and Capital Gains, seems to have been formulated more by a desire to dish the Tories than by any concept of social justice. I hope this will now be stopped.
As I said, I`d appreciate an early answer and an honest one, not a fobbing off from a Junior
Minister talking official gobbledygook of the type that got us into this mess in the first place.
Yours sincerely
AUSTIN MITCHELL
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