Socialist Worker

George Osborne steals £2k a year from workers

by Tom Walker
Issue No. 2233

The Tories are set to make 2011 a year of pain for millions.

The government’s VAT rise, combined with soaring prices, will cost the average working class household more than £2,000 this year alone.

The tax rise comes on top of big increases in food and energy bills, petrol prices and rail fares, as well as a predicted rise in interest rates.

VAT, a tax that hits the poorest the hardest, went up by 2.5 percent on Tuesday. It now stands at a record 20 percent.

The rise will see everyday essentials cost an extra £400 a year on average.

It also means the price of a packet of cigarettes has risen by around 15p, and beer by 6p a pint. Together that could cost an average £150 in the year.

The VAT hike together with oil price rises means petrol will cost £100 more a year.

The extra tax will even be slapped on energy bills. Regulator Ofgem already predicts gas and electricity bills will go up by £150 as firms profit from energy price rises.

VAT is not charged on most food—but the average food bill is anyway set to rise by more than £200 this year thanks to prices being pushed up.

The start of the year sees other price rises kick in too. In the south east, an average annual rail ticket has gone up by up to £500, while in London a single cash bus journey can now cost £2.20 and a tube day travelcard £8.

All of this will force up inflation, further eroding the living standards of workers facing pay cuts and freezes.

And inflation will lead to pressure for more interest rate rises.

People with a mortgage could pay over £500 more this year if interest rates rise as predicted—and rents are already at record levels.

Bankruptcy experts say they expect a record 140,000 people to go bust this year.

Yet while the price of everything shoots up, the government and the bosses are trying to push through another year of pay freezes for millions, sackings for thousands—but billions in bonanza bonuses for the bankers.


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News
Tue 4 Jan 2011, 17:30 GMT
Issue No. 2233
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