Thousands of Residents in Merthyr Suffer Labour Tax Grab

12.00.00am BST (GMT +0100) Sun 6th Apr 2008

In the run-up to the local elections on May 1st, Liberal Democrats in Merthyr have launched a stinging attack on the Labour Government for bringing in tax changes that have increased income tax bills for tens of thousands of families in the Valleys.

The 10p tax abolition will hit local people hard

On 6th April, Labour doubled the starting rate of income tax from 10p to 20p in the pound. Previously, a 10p rate was paid on the first £2230 of taxable income. As a result, instead of taking £223 in income tax on this portion of people's wages, Gordon Brown's government is taking £446.

Though the standard rate of income tax has been cut from 22p to 20p in the pound, a single person with no children would have to be earning over £18,500 to be better off under the tax changes.

"Things have gone seriously wrong when Labour has pushed up taxes on people on low incomes to pay for tax cuts for the better off," said Amy Kitcher, Parliamentary Spokesperson for Merthyr Tydfil and Rhymney. "This is a case of Labour robbing taxpayer Peter to pay taxpayer Paul.

"Thousands of residents on lower incomes across Merthyr and the Valleys are now receiving sharply increased tax demands at the same time as the council tax bills are arriving. And many are facing big increases in bills for gas, electricity and transport.

"Gordon Brown announced his tax grab a year ago. But in that time Labour has done nothing to reduce the impact of their tax demands. It seems Labour has totally lost touch with the reality of ordinary people's lives. Labour no longer appears to be on the side of ordinary people."

Those worst hit by the tax changes include:

> A single person with no children earning less than £18,500 will be a net loser, by up to £232 a year.

> People taking early retirement with a taxable income of less than £8,000 will lose, by up to £232 a year.

Liberal Democrat plans to cut the tax burden for those on low income include scrapping council tax and replacing it with a local tax based on ability to pay, and cutting the standard rate of national income tax by 4p in the pound, paid for by closing tax loopholes used by the wealthy and by increasing green taxes, such as the duties paid by the most polluting vehicles and those who travel in the most polluting aircraft.