Liberal Democrats saw that 10p change meant taxes increase for less well-off

In the current turmoil over the government's removal of the 10p tax threshold, voters have the right to ask: why didn't anybody notice at the time, when the measure was first brought in by Gordon Brown, then Chancellor, in the 2007 Budget.

The Conservatives, who are trying to make such political capital out of the issue now, were very quiet at the time.

Similarly Labour MPs, who, just before the local elections in May the first, have suddenly become very aware of their need to be compassionate to the less well off taxpayers, who would be hit hardest with the abolition of the 10p threshold. At the time they cheered the speech to the rafters.

The truth is the Liberal Democrats saw that the changes meant income taxes would increase "for many" less well-off people on the day of the 2007 Budget, and said so.

"We are asking the poor to subsidise the rich," said the then LibDem leader Sir Menzies Campbell.

This is how the BBC reported the statement by Sir Menzies..

Wednesday, 21 March 2007, 15:10 GMT

(http://news.bbc.co.uk/1/hi/uk_politics/6475445.stm)

Lib Dems slam Budget tax changes

Gordon Brown has "asked the poor to subsidise the rich" by cutting the basic rate of income tax and axing the 10p lower tax rate, the Lib Dems say.

Leader Sir Menzies Campbell said the combination of the changes meant income taxes would increase "for many".

The gulf between rich and poor is wider than under Margaret Thatcher, he said.

Sir Menzies added: "It's a wait and see Budget from a wait-for-me prime minister. He's concentrated... on his own political succession."

This budget was an opportunity to rebalance the tax system in favour of the less wealthy and the chancellor has failed to do that

On the face of it, Mr Brown's plan to cut the basic rate of income tax was a "very welcome" Liberal Democrat proposal.

"But if you look very carefully, the revenue to justify that reduction is obtained by the abolition of the 10p rate," said Sir Menzies.

"What is happening is we're increasing income tax for many tax payers in order to fund a reduction from 22p to 20p. We are asking the poor to subsidise the rich."

"This Budget was an opportunity to rebalance the tax system in favour of the less wealthy and the chancellor has failed to do that," he said.

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Sir Menzies said the public were "entitled to know the effect of this Budget on their own tax bills and the state of the economy".

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