BILL GLEESON: It all comes down to LibDems best of a bad bunch

Apr 30 2008 by Bill Gleeson, Liverpool Daily Post

EMBATTLED Gordon Brown had to make a humiliating U-turn to avoid defeat in the House of Commons this week.

He was forced to introduce a huge compensation package to assist low-income people who lost out most when he abolished the 10p tax rate in his last Budget as Chancellor of Exchequer.

It was particularly galling that Mr Brown tried to disguise the measure by introducing a 2p cut in the basic rate of tax at the same time. He was hoping it would divert attention from the hit to the poor.

Either that, or he hadn’t calculated the impact on the disposable incomes of low paid workers, but that would be stupid, and Mr Brown certainly is not stupid.

It remains a mystery, though, why Frank Field and the other Labour MPs who threatened rebellion about the issue during this week’s vote took so long to voice their opposition. After all, Mr Brown’s last Budget was more than a year ago. Maybe they’re not so bright either.

Measures to appease the rebels include forcing employers to shoulder the burden to compensate the low paid for the loss of the 10p rate by increasing the National Minimum Wage.

The move is likely to compel smaller businesses to put up their prices, and could lead to greater unemployment and inflation.

In the words of the Forum for Private Business: “This is not even a stealth tax; it is a blatant attempt to retain revenues generated by the removal of the 10p personal taxation rate by forcing businesses to bear the financial burden through increases in the minimum wage. We cannot quite believe that it is being put forward as a serious solution.”

It’s not that the abolition of the 10p rate was only ever a ruse to justify raising the minimum wage, as that would be far too clever, and I wouldn’t say that Mr Brown was that clever.

The minimum wage is here to stay, but if it rises too high it would be profoundly harmful to business. Perhaps Labour don’t mind that too much these days, after all Gordon Brown’s Labour is a different animal to Tony Blair’s, a fact that needs to be taken into account during tomorrow’s local elections.

Labour is not so business-friendly any more. It possibly never was.

Yet when it comes to Liverpool council, the performance of the Liberal Democrat administration in the past year or so hardly recommends them either. Budget shortfalls, cancelled festivals, Local Government Standards Authority investigations, party splits and executive departures are hardly a recipe for good governance.

Yet you may as well vote Monster Raving Looney Party as vote Tory in this city. So where does that leave us?

The fact is the Lib-Dems, for all their faults, are probably the best of a bad bunch when it comes to choosing what is best for business. Certainly over the years, the party has presided over a relative reduction in local taxation and at least has talked the talk about improving relations with business.

IT’S good to see investment taking place at Pilkington.

A £40m investment in new production lines should secure the future of the affected operation for some years to come.

The glass maker has been some rough times in recent years, and it’s nice to see that its owner, Japan’s Nippon Sheet Glass, is making positive steps.

St Helens has seen many jobs disappear from the glass firm. The old industrial town needs some good news.

Hopefully, further investment in Pilkington’s other glass plants in the town will follow shortly.