New Labour's Tax Scandal


Tom Penman

CWU member and Call Centre Worker Dundee


Gordon Brown and New Labour are carrying out daylight robbery against the lowest paid workers. From the end of this month our wages will be taxed at 20%, following the abolition of the 10p-starting rate of tax. That means a doubling of the tax burden and a wage cut for millions of especially young workers. The rise in income tax will affect the living standards of many young workers who will suddenly find themselves out of pocket. The minimum wage at its full rate or 'development rate' is already a poverty wage without the government stealing more of it off us. In work places that pay above the minimum wage or where gains have been made the tax increase will be come as a bitter blow. In my call centre the union has won a 3% pay increase from management but because of the increase in tax we are worse off now than before the pay increase. We say that instead of increasing taxes on the lowest paid the government should reverse the 5% cuts in corporation tax it has made over the last decade and close the taper tax loop holes which allows the super rich to claim £4.5 billion in tax relief each year.


The government tries to defend the tax increases by saying that tax credits will cover the increase and some families may be slightly better off. But working tax credits cannot be claimed by under 25's unless you have children meaning that many young workers will be worse off. Even when someone does qualify the process of claiming the credits is so tortuous it puts people off. Less than 20% of people who are eligible for working tax credits claim them. The government can create all the figures it wants showing how some families will be better off once credits are included, safe in the knowledge that most will never claim them.


Mean spiritedness and greed is at the centre of this government. They have carried through a policy of cuts and privatisation in the public sector, looking at schools, hospitals and job centres with an eye to see what can be sold off or rented out to increase the profits of the private sector.


We desperately need change! The parties in Westminster and Holyrood represent the interests of big business and the rich. With the coming recession they can only promise us that things will get harder. If we want better wages, public services or working conditions we'll need to fight for them ourselves. This includes organising and unionising our work places but it also means organising politically to fight for a world free of the anarchy of the free market and the poverty it creates - a socialist society where the worlds resources are used democratically to provide a decent standard of living for everyone.