Labour’s 10p tax rate dismissed as ‘gimmick’

Director of Institute for Fiscal Studies claims coalition's move to cut the tax-free personal allowance achieves a similar outcome for low-paid workers

The director of the Institute for Fiscal Studies thinktank has rubbished one of Labour's key policies for tackling in-work poverty, the 10p starting rate of income tax, describing it as "pointless" and a "gimmick". Speaking in a debate about the parties' manifesto pledges at City accountancy firm Moore Stephens, Paul Johnson said Labour should have "learned their lesson" after introducing a 10p rate and subsequently abolishing it during Tony Blair's premiership.

He said the coalition's tax-cutting policy - an increase in the tax-free personal allowance - achieved a very similar outcome for low earners "without introducing unnecessary complexity".