I'm glad that Frank Field did what he did. The Labour Party needs more people willing to challenge the system like this.

I'm glad they did this, not just messing with tax credits/winter fuel. 

Prbo....

The government made a mistake, it corrected that mistake (with interest) - and we all know why ;)

So please, stop being a troll, your party has peaked far, FAR to early.  

The best we can hope is that this stops the bleeding.  We're increasing borrowing by £2.7 billion (I think) to pay for this, which isn't exactly ideal.  The IFS said that Darling's ability to balance the budget in future years would be dependent on him not getting caught up with a lot of 'one-off payments' to particular interest groups.  He's not doing a great job of it so far.

This on its own will not be enough.  But if we build on the direction of these changes- redistribution to those on low and middle incomes through the personal allowance system rather than via tax credit- in next year's budget, we may start doing better. 

I think this was the minimum necessary but it's far from clear that the issue has been resolved. What would be said if the Tories had:

1. Taken away money from the lowest paid in order to show a "headline grabbing" tax cut.
2. Denied vehemently that there was a problem for months until they were staring defeat in the face.
3. Made a £2.7bn unfunded tax cut to buy themselves out of the problem.

You think it's sorted?  

An additional £2.7 billion of borrowing is to be added to the national debt to try to save face at the upcoming by-election. To paraphrase the late Douglas Adams, is this some strange usage of the term “sorted” that I’ve not come across before?

Grant Thornton say:
Basic rate taxpayers benefit by £120 while low income earners on £7,455 remain £32.40 worse off. Leading business and financial adviser, Grant Thornton, says the Chancellor's announcement to raise personal allowances to offset losses to low income earners by the abolition of the 10p rate will still leave some low income earners worse off, while benefiting all basic rate taxpayers under 65 to the tune of £120.

Francesca Lagerberg, head of Grant Thornton's national tax office, says although it is pleasing to see the government, having blundered on this decision from the outset, moving quickly to clean up the mess created for low income earners. However, she is concerned that raising personal allowances by £600 (to £6,035) is not targeting all those affected.

"While the Chancellor's plan offers a solution to the political problem it does not offer full compensation to those worst hit by the abolition of the 10p rate, as there are still some who will spend the 2008/09 tax year worse off," she says. "Furthermore, and rubbing further salt into the wound of those low income earners who have not been helped by today's announcement, is the fact that a large number of middle income earners will benefit from the raising of the personal allowance by £120 as well*."

"The Chancellor has delivered an essentially unfunded early Christmas present to a large number of UK workers, but failed to undo its mistake for around 1.1 million low income households." Lagerberg says many UK workers will be up-beat about the announcement expecting an additional and unplanned boost to their income, but those earning £7,455 will still be £32.40 in arrears come the end of the 2008/09 tax year.

I suppose the real test of this is in Crewe...;) - I dearly wish to see cameron totally ridiculed for a defeat....especially when the polls say otherwise.

No one really cares what tory trolls think madasafish, but we appreciate the debate. It is an inescapable fact that a tax break for ALL the uk's workers is a welcome development.

Regardless of its intention.... 

Let's not forget about all this, that the expected outcome of today was going to be typical tinkering with an overly complex system, targetting various groups instead of everyone.

I genuinely expected today that it was going to be some pensioner allowance changes, and some tax credit changes. It was going to be complex and wouldn't please anyone.

I don't believe anyone really expected this, and looking at the political analysis, at last Labour have managed to do something genuinely headline grabbing and put the Tories on the back foot.

Yes, we've had to borrow for it, but I don't think anyone dared dream we'd be able to say, at the end of today, that 22 million taxpayers would be better off and 600,000 people taken out of income tax altogether.

That's the bottom line, and yes the 10p fiasco on the whole was messy, drawn out and needlessly damaging on the government, but at last we can draw a line under it and move on.

 
Now what next, oh, ID cards and 42 day detention...great...
 

Having long followed the 10p tax saga - even before it became a national issue - I looked forward to seeing how it would be finally resolved (or not).

Sadly, this latest stunt from the Government is a colossal political blunder which is destined to make matters much much worse. In fairness, the Government were always likely to be damned if they did and damned if they didn't. However they have now left themselves open to being damned across all fronts.

Gone is the mantra of "no more boom or bust", gone is fiscal prudence, gone also is the current PM's sacred Golden Rule and gone forever is any possible attack Labour might have made against so called Tory 'unfunded tax cuts'. Politically, its now officially open season at the hunt and I'm afraid we all know who the rabbits are going to be.

Labour has been forced into a panic measure which can only exponentially embolden the opposition parties. It will further reinforce in the public eye (and critically the voters of Crewe) the message that Labour cannot ever again be trusted to run the economy.

There are also historic parallels with previous failed Labour Governments that people can now readily hang the current troubles: The 'mini-budgets' of the 60's and 70's, that infamous IMF crisis (coincidentally involving a loan of £2.3bn to save Callaghan) and the 12% fall of the Pound - today its fallen almost 20% in the past year. Just the kind of things Labour would prefer to remain forgotten but will now be brought out into the light and placed in front of a new generation of potential voters.

If anyone doubts how badly this is playing then you should check out today's newspaper headlines. Tomorrow, they will be full of expert analysis from economists as they pick apart the measures and highlight in gloomy terms just how much this is going to cost us all. By the end of the week, no one is actually going to feel better off and several groups of people are going to feel positively robbed.

Come the weekend, the Tories, Liberals and Labour back benches are going to be talking very publically about a near future without Brown and Darling.  On Sunday, the polls will demonstrate that this tax measure and Brown's soon to be announced plans for the year have spectacularly missed their targets. And next week, the people of Crewe will deliver their verdict... I don't expect it to be good for Labour.

As if to drive home how much Labour are out of touch with the public feeling, just read the last paragraph in the original post:
"And a cheer for Frank Field, who had the decency to apologise to the PM for any damage that he may have caused."

Shouldn't the first call for an apology be placed upon the PM to apologise for the damage that he has caused the British people? Typically, the inward looking Labour party seems to think everything is swell with the world as long as the leader is happy.

In summary, this has been far from a brilliant resolution. In fact its tactically ineffective and very damaging strategically. Conservative HQ must think all their christmases have come at once.