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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 8:30 pm on 28th April 2008.

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Photo of Philip Hammond Philip Hammond Shadow Chief Secretary to the Treasury 8:30 pm, 28th April 2008

No, I am going to make some progress. The hon. Gentleman has already had one go.

Let us remember that this is the Prime Minister who was going to restore trust in politics. Well, promising anything to buy off a rebellion four days before an election and then failing to deliver on those promises is not the way to restore trust in politics in this country. Nor is it the way for the Prime Minister to dig himself out of the hole he has dug himself into.

So the amendment that we have tabled is designed to underpin the deal that was done last week, not to undermine it. It should be as acceptable to those who are convinced of the Prime Minister's sincerity as to those who doubt it, and as acceptable to those who wish to live in hope as to those who prefer to learn from experience.

The amendment would introduce a sunset provision for the changes made by clause 3—principally, the abolition of the 10p rate. It would give the Government the rest of this year to take action and come back to Parliament and report on the measures that they have taken to mitigate the effects of this clause on those who will pay more income tax as a result of the combined effects of clauses 3 and 1—the clause reducing the basic rate of tax. When they had done so, it would require a simple resolution of the House that it is satisfied with the statement made to lift the threat of the sunset provision.

The amendment is deliberately not prescriptive. It does not seek to tell the Government how they must address this problem; whom they must compensate and to what extent, or by what means. The requirement for approval of the statement by a resolution of the House is intended to ensure that the package the Government deliver addresses the reasonable concerns that have been expressed in the House.

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