Mr. Sebastian Barnes:

The council's stance is one of explaining the options available. One option available, that of keeping the income tax system as it is, would involve making these kinds of adjustments to the bands and people paying the same as a share of income. An alternative would be to keep the bands where they are. That would mean a real tax increase for people whose incomes fall under the band. That would generate additional resources that could be used for something else, such as for childcare or to compensate people for the higher cost of living. That is a political choice. Those are two different ways that it could be organised. As we noted earlier, one of the concerns with the Government's spending rule is that it does not allow for an offset on the tax side. With the European spending rule, there is a certain amount that you can spend but you can increase that amount by having an offsetting tax increase, a revenue increase. The spending rules that the Government has specified do not allow that to happen. That is a weakness of the rules for several reasons, one of which is that it does not give the option to the Government to raise taxes to create more space for higher spending.