Apr 2008 23

John Redwood: Labour tries to tackle fuel and child poverty by creating tax poverty10

John_redwood_2_3This government just doesn’t get poverty. Rather, it begets it.

The government thinks there is child poverty and fuel poverty. Today – and next week in Parliament – the pressing issue is tax poverty.

Poverty is a shortage of income for people to pay the necessities and have a decent lifestyle. There are three ways of tackling it.

The political parties all agree the best way is to create a climate in which the economy generates enough well paid jobs, so people can go to work to earn what it takes to afford to keep themselves and their dependents.

They agree that for some, it is necessary to take money from the many to give to the few who cannot find or hold a job.

The third way would be for the state to let people keep more of their money, instead of taking so much from them in tax. If those on lower incomes paid less income tax they could afford the fuel bills and could manage the food and housing bills without requiring a benefit top up.

The government is hoist on its own targets to cut so-called child poverty. It is a curiously misnamed set of targets. Practically all children are poor. We have legislated to make sure they remain so, as we believe we should prevent children under the age of 16 from working for pay to take them out of poverty. (Please note, I support the banning of child labour!) We also usually prevent children from inheriting or receiving larger sums from relatives with property and money  to give them an independent savings income which they control as minors. This government wishes to take this approach further, by preventing 16-18 year olds from entering full time work for pay without an educational component, something I do not support. I want 16-18 year olds to have opportunities for more education if that is what they want, but I do not favour compulsion.

What the government means is it wishes to cut parent poverty. That’s a good thing to want to do. I also want to cut it, along with cutting poverty for childless couples and for single people. The government’s determination to tackle parent poverty has led it into the dangerous political quagmire of abolition of the 10p tax band, offering compensation to some parents through benefits and tax credits, whilst taxing single people and childless couples more. Transferring money from one group of low income earners to another is not what a lot of Labour MPs came into politics to achieve. It is certainly not what I am about. I want to tackle the low net incomes of all.

Today there is a summit on fuel poverty. Yes, the fuel bills are spiralling upwards. No, there is nothing in the short term the government can do about the ever higher oil, gas and coal prices. Yes, the fuel companies have to pass on most of the increased costs of fuel to them. Yes, that will make them unpopular and the objects of political diversionary attacks.

Yet if you buy fuel for your car or van, for your working vehicle or for the delivery vehicle to your home, more than two thirds of the rip off price is tax. The energy companies are great tax collectors, taking money from poor and rich alike for their product, only to hand over lots of it to the government. People could afford even today’s high bills if they kept more of their own income. The government’s removal of the 10p tax band undermines everything and more besides that it is trying to do to alleviate fuel poverty. There would be no fuel poverty for the many if taxes were cut.

I believe the best anti poverty programme you can have is cutting taxes. Under this government, far from playing Robin Hood and taxing the rich to pay the poor, as socialists would like, the government is playing Sheriff of Nottingham. It is taxing the poor to give to the new rich, the Chief Executives of the ever expanding state, to the well paid bureaucrats, to the legal advisers, the management consultants, the spin doctors, pollsters and focus group masters, to the computer contractors and the PFI/PPP providers who cluster attentively around Labour’s great public sector money making machine. Labour even wants to add the political parties to the list of those who deserve more tax cash from the poor to sustain their expensive habits. There are just  not enough multimillionaire footballers and movie stars to take the money off, especially when they can leave the country at the very whiff of higher taxes on their fabulous incomes.

If the government were serious about tackling parental poverty and fuel poverty, if it understood that it needs to tackle single person and childless couple poverty as well as pensioner and parent poverty, it would curb its own insatiable appetite for cash for the grandees of the public sector. It would cancel or seek value from all those consultancy, research, financing and  management contracts that festoon in the profligate public sector. Ministers would curb the Ministerial drinks cupboard and cut back on the air travel.

So come on Labour. Put in place a real anti poverty programme. Understand poverty is a shortage of spending power for anyone who is poor, whether they are young or old, single or married, with or without children. It is bad news for anyone suffering from it. The best and quickest way to get more people out of it is to lower taxes. That means reining in the excesses of the multilayer government and the quango state.

Cross-posted from John Redwood’s Diary

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  • Hardeep_Singh

    It helps illustrate how Labour have abandoned their socilist principles for outright communism. They are no longer effectively serving anyone most certainly not the poor who seem to be paying for the government incompetent failure but at least they’re coming around to realising this now.
    John Redwood once again makes a compelling case for a more ‘lightweight’ tax level and goes on to comment how it would actually help more. How can not having your own money in your own pocket not help you?

  • Robert Tressell

    John Redwood concerned about Poverty eh:Another Tory reborn from the dark days of Thatcher,that well known caring sharing PM,who cared deeply for those in society not fortunate enough to help themselves onto the Capitalist Gravy Train.
    Maybe you should ask Mr Redwood,who obviously cares so much about effective use of Taxpayers money how much he pays his Partner to work for him as his “Researcher”,out of our TAX(See BBC News Today).Don’t be fooled folks,the Tories have no heart or Inclination for Social Justice,just rewards for those at the top.THe sad thing is,before you reply Mr Singh,NEW LABOUR ARE NO BETTER!

  • Robert Tressell

    ..And Mr Redwood introduced the COUNCIL TAX !!!!!!!!(SEE WIKIPEDIA PROFILE)

  • Robert Tressell

    …And he works or has worked for lots of Investment Companies and NM Rothschild Bank etc….Mmm dont bite the hand that feeds you with high taxes eh John.Another Tory Elitist defending those that have too much.

  • Hardeep_Singh

    There’s nothing wrong in having underlying beliefs. Yet it’s even better to update your opinions aginst the challenges of the day.
    What he’s advocating is the manner in which to pursue those social policies and the accompanying management mechanism with which to deliver. However I agree that ultimately all politicians are the same underneath … politicians. Self preservation is the true party cause that they ALL understand and adhere to.

  • Robert Tressell

    Fair Comment

  • Steve Robson

    John Redwood, anti poverty. What a joke. These tories just believe in getting rich at the expense of everyone else and then supporting campaigns like the TPA so that they can be even richer and prevent even a tiny amount of redistribution. What a great wheeze the TPA is though, promoting low tax as something to help the poor. Just like persuading turkeys that Christmas is a good thing and maybe they’d like to commit suicide and it honestly isn’t because we want to eat you, no honest!
    Perhaps TPA could also stand for Turkey Protection Association.

  • Hardeep_Singh

    Clearly Steve you find the comments and beliefs of the TPA not to your liking nor persuasion. You are free to leave but there’s little need for you to exhibit your tantrums here. If you don’t like the message please don’t feel that you’re somehow compelled to engage in discusion ceratinly not on this website.
    There are undoubtedly good and bad on both sides of the spectrum but we need to debate in order to reach a resolution somewhere in the middle. What we most certainly don’t require is this ‘banksy’ style of internet grafitti, it serves little purpose.

  • Steve Robson

    better that than the ungrammatical, moronic and ill-informed comments you make Hardeep. I just feel that if the TPA put out these lies and simplistic statements, someone needs to balance it. And given that they’re libetarians, I’ll post for as long as I like and you should respect that. Even the lookalike clones who work for the TPA recognise my right to do that, like the good libetarians they are.

  • Hardeep_Singh

    You only contribution is name calling, how simplistic is that? If you read my post I was promoting debate and not a ‘closed shop’ nor was I parading myself as some kind of custodian of grammar, my education is average and simple as is the man.
    I was just pointing out that with your discomfort at the commentary found on the TPA your time could be well spent elsewhere. From my previous posts surely you’d get the gist that I’m all for everyone having their say with impedence.