Millions of pensioners are paying to make millionaires better off. The Tory-Lib Dem government took over two years ago and told us that we are all in it together. Well, pensioners are certainly all in it together. They are worse off because of the granny tax, as the Daily Telegraph called it.
And millionaires are all in it together as well – better off by £40,000 a year each.
The trouble is that the pensioners are in a different 'it' from millionaires. In fact whether you are a pensioner or on a low or middle income and in work, you are likely to be worse off. So 99% of the population are in it together. It’s just the very rich, who are better off. By the way, the government has over 20 millionaires so the budget was a big help to them.
So what did the chancellor do in the budget?
The £1 billion raised from cutting the 50p top rate of tax (in the first year) is being given to the richest 1% of earners, whilst middle and low income families are being squeezed with high fuel prices and cuts to tax credits and child benefits.
The Chancellor claimed this was a “Budget which rewards work.” The only people being rewarded are the high earners, whilst the majority of the country is funding their lifestyle.
The government’s own review of the 50p top rate was carried out by HM Revenue and Customs. They tell us that £3 billion is being given to the richest earners by cutting their taxes.
Labour will show its spending commitments once we see the effects of this Tory-Lib Dem budget, but if this was a Labour Budget we would not be cutting the top rate of tax for people earning over £150,000. This is the wrong priority when family budgets are being squeezed.
The personal allowance for over 65s is being frozen, so that the increases in the Personal Allowance for everyone else catches up until they are the same. 4.77 million over 65s will lose out in real terms her- another clear sign of where this governments priorities lie.
The chancellor’s promises on refuelling the economy have failed. The economy has stalled, unemployment is growing and the Tory-Lib Dem government is borrowing £150 billion more than planned. Remember how they said their absolute priority was to cut the deficit. In fact they have made it worse, much worse because the economy has not grown and because so many people have lost jobs, businesses and homes since the coalition took over.
This budget does nothing to help the unemployed back into work. There are tough decisions on tax, spending and pay but the deficit won’t decrease without a plan for jobs and growth, to reboot the economy. And those tough decisions should be made in a fair way, so that those with the broadest shoulders pay the most and those least able to pay have to make the smallest contribution.
Labour’s five point plan includes a tax on bank bonuses to fund 100,000 jobs for young people, a tax break for small firms taking on extra workers, as well as a fair tax cut to help families and pensioners and jump-start the economy.
The Lib Dems have made much of the increase in personal allowance. But this increase is outweighed by the VAT rise, tax credits cuts and rising petrol prices. A family earning just £20,000 loses £253 annually, as well as paying roughly £450 in VAT.
Stamp duty has been increased on very expensive houses. The government claimed the increase in stamp duty was to make the wealthy pay more. But the change will only affect 4,000 houses in the UK, therefore not touching the vast majority of the high earners in the country. Again, this government is making its priorities very clear indeed.
A one earner family on £55,000 would lose much of their child benefit, while a couple on as much as £99,000 could keep it all.
We have a government which is helping the wealthy and hurting the rest. We have a government which is destroying the NHS (speak to anyone who works in the NHS if you don’t believe me). We have a government which is cutting the number of front line police. We have a government which is privatising the roads.
I am sorry to be so gloomy but after the budget I really am very worried for the future of our country and for many thousands of hard working families, for pensioners and for young people looking for work. There is a better way and Labour will be putting forward its alternatives over the coming months and years.