Putting Right Your Mistakes
The real tests that Governments face are not so unlike the tests that we all face as individuals in our own lives. The test is not that we should never make mistakes. We do. The test is how we go about putting things right when a mistake is made. This is the test that should be applied to Governments.
Like other developed nations, our country faces a number of difficult challenges brought on by the world economic slowdown, the international liquidity crisis and rapidly rising commodity prices including oil and food. This increasing uncertainty is reflected in household budgets, with people feeling the pinch.
The tax changes in the last two budgets were designed to simplify the tax system, to lift 600,000 pensioners out of paying tax altogether, and to give money back to people on low incomes with families. However, there were also losers. This wasn’t the intention. The whole point about Labour politics is to help those people on average or less than average incomes, not to make life harder for them.
In other words, the Government made a mistake. The correct thing to do in these circumstances is to say sorry and to put things right as quickly as possible. That is why the Chancellor of the Exchequer has brought forward an announcement from this autumn’s Pre-Budget Report and raised the basic tax band, effectively giving an extra £120 to basic rate tax payers. He has lowered the upper tax band, meaning there is no change for higher rate payers. The tax reduction is therefore aimed only at income tax payers of ordinary means or less.
I believe that this is the right thing to do, and that the Government did the right thing in admitting the mistake and putting it right.