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Income Tax

This is, of course, the 10th emergency statement in the 10 months that the Chancellor has been in office. How humiliating for him to come to the House today with a mini-Budget to clear up the mess made by the Prime Minister in his last Budget as Chancellor. Unlike in the case of the Minister for Housing today, we have not seen an advance copy of the statement. The Chancellor will forgive us if we look at the small print of his Budget announcement—after all, this lot cheered when he announced the last changes, which then unravelled. Let me also make it clear that we will welcome anything that can be done to help the millions of low-paid people hit by the regressive tax rises of this Government. We will support any genuine compensation that is offered. The Prime Minister, muttering to his Chancellor, might remember that he spent months before the last general election arguing against increases in personal tax allowances, saying that they were not a particularly well-targeted measure. Surely the lesson is that this sounded less like a considered statement from a Chancellor and more like a cynical press release in a by-election campaign. First we got the tax con, and now we are getting the compensation con, for it is clear that this help is for one year only. It is a one-off payment—a one-off solution to tax rises that hit every year. The Opposition remember the one-off council tax rebate to pensioners before the last general election. We will look carefully at what the Chancellor promises. We will ask him what the long-term plans are to help people and to compensate them. The Government are treating people like fools. The Chancellor said in his first interview in his job, with the Financial Times, that tax changes should only ever be announced ““at the proper time””—at the Budget or the pre-Budget report. Since then, he has announced U-turns on every single original tax idea that he has had. And here he is, in the middle of May, reopening last year's Budget's changes in income tax and attempting to clear up the mess of the man sitting next to him. It comes on the same day that inflation numbers have soared and his plans to tax foreign profits are unravelling. Surely whatever remaining reputation that the Prime Minister had for economic competence has evaporated today. This is the Prime Minister who, on the plane back from America, said that there were no losers from his Budget, but was then forced to admit that there were millions of losers. He said that he would not rewrite his Budget but he now sits as the man next to him rewrites the Budget that he gave. He said that in-year payments were impossible, but now the Government are making in-year payments. Let no one be fooled—[Interruption.] ... Why do they not save their fury for the internal Labour party rows that are happening? Let no one be fooled about why the Chancellor is making this statement today. It is not because he wanted to, or because of any sense of guilt at hitting the low-paid, or because the Prime Minister thinks that it is the right thing to do. It is because this divided, dithering and disintegrating Government are panicking in the face of the Crewe and Nantwich by-election. The Prime Minister, who once commanded so much respect from friends and foes alike, now looks like the unelected leader who is desperate to save his skin, cowering before every electoral challenge and insulting the intelligence of the very people whom he has hurt. This is a one-off change only, for this year only. The Chancellor serves up a compensation con after a tax con and expects people to believe it. What utter cynicism, what total incompetence—and what a complete humiliation for this Chancellor of the Exchequer.