Is Britain's Labour Government Waking Up?

Posted by: Stanley Reed on April 29

Amazing! Britain’s Chancellor of the Exchequer Alistair Darling is assembling a panel, including representatives from industry, to review the country’s tax regime. It is tempting to say that he should have done this months ago. If so, Darling and his boss, Gordon Brown, might have avoided the series of tax pratfalls they have committed since Brown took over from Tony Blair as Prime Minister last year.

Their latest: Slapping higher taxes on Britain’s lowest paid workers by abolishing the 10% bracket. A rebellion by Labour Party MPs forced them to agree to compensate those affected—with much loss of face for the Labour brass.

Darling also has hit expats with tax hikes and bungled a change in Britain’s capital gains regime. Now, following the announcement that two companies, Swire, a pharma outfit, and publisher United Business Media, would move their headquarters to Ireland for tax reasons, Darling is suddenly worried.

It seems to have dawned at last on Darling and Brown that tax hikes and other meddling might not be wise in the face of what may well be a credit crunch induced recession. Labour Party leaders are scrambling because they face the prospect of big losses in local elections being held across the country, including in London on Thursday. A major defeat this week will be seen as a precursor to an end to Labour’s three-term hold on parliament in the next national elections.