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April 3, 2012 - Bill Esterson's Westminster Diary

Bill Esterson


The government told people to stock up on petrol and diesel and to store it at home. It’s been bad enough facing long queues for fuel but sadly a few people followed the advice and have been badly hurt in fires which have resulted. 

And just where were people supposed to store the fuel is not clear. Some people have garages and the fire service advice is that would be dangerous, something many people understood only too well. But for many people, there is no garage anyway. 
Where were they supposed to put their can of petrol? So just why did the government tell people to stock up on fuel? 
Tory MPs have admitted that they were told to stir up a crisis, panic at petrol stations. The Tories hoped to blame the unions but then it turned out there was no immediate prospect of a strike by tanker drivers. 
By law, the UNITE union was not allowed to hold the strike before Easter and union leaders made clear there would be no strike just yet as they wanted talks with the oil companies. 
So, we have a government which caused a panic at the pumps and told people to break the law by storing petrol at home as well being incredibly dangerous. All of this for political reasons. Maybe they were trying to take attention away from the rising price of fuel. In my view, the government should be cutting VAT to help motorists and businesses. 
Cutting 3p off a litre of fuel would help the economy as well and it could be done straight away if the government wanted to. Instead, the government chose to give millionaires a tax cut and created a granny tax to pay for it. The Tory and Lib Dem priorities are to help millionaires at the expense of small businesses, families and pensioners and they are doing nothing to help young people find work. 
The American economy is growing strongly, so are the French and German economies. In Britain we may be heading back into recession. The government has the wrong priorities and the vast majority of people in this country are paying a very high price for the mistakes being made by this government.

Buried in the small print of the Budget, is that the chancellor, George Osborne has hit pensions with a £3 billion granny tax.

George Osborne’s announcement means that the personal allowance for over 65s is being frozen in cash terms, so that the increases in the Personal Allowance for everyone else catches up until they are the same. There are 4.77 million over 65s at the moment paying income tax who will lose out in real terms.

The freeze in the personal allowance for pensioners will see 4.4million pensioners who pay income tax losing an average of £83 per year next April. And people turning 65 next year will lose most – up to £322.

This Budget should have put jobs and growth first, but it will do nothing to get our stalled economy moving or get people back to work. In fact George Osborne’s is set to borrow £150 billion more than he planned in his spending review – because his failed economic policies have delivered slower growth and higher unemployment. Trying to raise taxes and cut spending too far and too fast has backfired.

Of course there have to be tough decisions on tax, spending and pay. But we won’t get the deficit down unless we have a plan for jobs and growth to get our economy moving again and get people off the dole and into work.

What we needed in this Budget was real help for families on middle and low incomes and a real plan for jobs, like Labour’s five point plan which includes a tax on bank bonuses to fund 100,000 jobs for young people and a tax break for small firms taking on extra workers.

We also called for a fair tax cut to help families and pensioners and jump-start the economy. A temporary VAT cut is the quickest and fairest way to do this, because it will help pensioners and those on lower incomes who won’t gain a penny from an increase in the income tax personal allowance.

This is a Budget where millions are asked to pay more, so millionaires can pay less:
  •    14,000 people earning £1 million or more are getting a tax cut of over £40,000 each year.
  •    A family with children earning just £20,000 loses £253 a year from this April. This is on top of the VAT rise which is costing a family an average of £450 per year.
  •    And of course there is the granny tax.

The Government promised change, but things have become worse not better. Their policies have failed on jobs, growth and the deficit:

  •    One million young people are unemployed.
  •    Our economy has stalled. The OBR is predicting just 0.8% growth in 2012 compared to 2.5% forecast in last year’s Budget. And the UK is growing at half the rate of the United States.
  •    The government is set to borrow £150 billion more than planned because of slower growth and higher unemployment. 

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