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Clause 3 — Abolition of starting and savings rates and creation of starting rate for savings

Part of Orders of the Day – in the House of Commons at 8:45 pm on 28th April 2008.

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Photo of Jeremy Browne Jeremy Browne Shadow Minister (Treasury) 8:45 pm, 28th April 2008

I am grateful to my hon. Friend, who has made an extremely attractive proposition. We already know the parameters of the debate at the next general election: the Labour party is committed to its tax and spend proposals and the Conservative party is committed to matching them entirely. The Liberal Democrats belong to the only party with the freedom of manoeuvre to consider exactly the sort of progressive and attractive tax policies mentioned by my hon. Friend. However, let us not get too diverted.

We have talked about some of the unanswered questions, such as who will get the backdated proposals and those about the issue of cash flow, and we have not yet heard an answer, although we hope that we will later. Furthermore, we have not heard about how long the compensation packages will last. Will they apply for one year only, as some Government measures do? For the people affected, losing the 10p rate is not just for Christmas, but for life.

Not only low earners are involved. Many in the London media commentating classes make the mistake of thinking that anybody who earns £14,000 to £17,000 a year is a low earner. For many constituents of mine, that is a typical wage. People who work as hotel receptionists or on farms or who have secretarial jobs do not regard themselves as low earners or as people who need to be beneficiaries of the largesse of the state. They want to get on with paying a reasonable proportion of their salaries in tax to fund public services, but they also want to be able to provide for themselves and their households. The issue affects millions of people—including, but not exclusively, the poorest.

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