From the budget report, I’ve attempted to knock up a simple tax graph showing you who will be worse off and who better off under Gordon Brown’s new plans. He’s announced a cut of 2p in the basic rate of tax effective next April, but he’s also abolishing the starting 10% rate of tax, with no concomitant increase in personal thresholds announced. Here’s the basic effect – the blue line is the new tax regime as if applied today, the purple line is the current regime:


There are some caveats: Brown is making working tax credits more generous, so they will continue to a higher level, helping people on the lowest incomes (that’s my attempted interpretation anyway); and the top NI threshold will be raised, increasing slightly the NI paid by the richest.

The upshot, though, as far as I can see, is that if you earn in the £7k-£18k band, you’ll pay more tax despite this headline tax cut. The biggest beneficiaries appear, from the graph, to be those earning around £36k a year.

This is all rather back of the envelope so corrections welcome…

Update: Ryan’s worked out that £18,605 is the salary figure when you switch from loss to gain.

BBC News 24 was reporting this morning that there will be a row over tax at this conference, and that Ming Campbell has denied the vote would of confidence in the leadership. He is right.

Much as this week is a nice holiday by the sea, we come down to debate real policy issues. The complaint levelled, fairly, against Labour and the Tories is that there is no real debate at their party conferences and the patry memberships only have a limited say. The Liberal Democrats are not like that – we’re a democratic party and we make policy together. Is it any wonder, though, that the other parties don’t risk this when substantive policy debate is repeatedly characterised as being about the media’s favourite subject, personalities.

When we debate the 50p tax rate amendment (which is an addition to, not a replacement for, Ming’s tax plan), we will deal with the substantive issue. Of course there will be disagreements: there is no absolute right or wrong on this. We will agree a position democratically, arguing which case is best for the party and, more importantly, for the country. Talk of the debate being a referendum on the leadership isn’t helpful and isn’t true.

If we always agreed on policy, there would be little point having a party conference.