It has been said that two Ed’s are better than one, but not in the case of the Labour Party where both Ed’s are proposing to force 2 million low paid workers who have been lifted out of paying tax altogether to pay tax at 10%.
Labour’s latest wheeze is that they will cut the lower tax threshold back to its pre 2010 level of just over £ 6,000 (it will be £ 10,000 by 2015) and introduce a tax rate of 10% on pay between £ 6,000 and £ 10,000. To pay for this they have adopted Liberal Democrat proposals for a Mansion Tax.
What the Ed’s both failed to say is that the full Lib Dem proposal is to use the Mansion Tax to further raise the lower income tax threshold to equal the national minimum wage, which will in fact make the national minimum wage equal to the national living wage for the first time ever.
It is still Labour’s intention to use the money they save through increasing the tax on the poorest to provide people spending over £ 28,000 on goods attracting VAT at 20% (ie: not food, fuel, baby clothing, books and magazines, unprepared food etc). It still means the poor would pay a heck of a lot more under Labour than they do under the Lib Dems.