Huge corporations who make billions in profits will pay the same tax rate as the people who clean their offices.
That was what bungling baron George Osborne announced today, Wednesday, in his budget.
He cut corporation tax—tax on profits—by 1 percent taking it to 20 percent. As Osborne gloated, it is “the lowest business tax of any major economy in the world.
The same tax on profits was 52 percent under Margaret Thatcher.
That measure alone costs £900 million and it will come from extra cuts.
It’s only the tip of the cuts iceberg. The Tories want £11.5 billion in cuts. That’s £1.5 billion more than they previously said. And Osborne claimed he’s managed to cut £11 million more than he had planned last year.
Osborne’s claims and sums for the economy are a mess. He claimed that, “record number of people in work”. But unemployment went up by 7,000 according to official statistics announced today.
He said the office for made up statistics, or the Office of Budget Responsibility (OBR) as it prefers to be called, “have today sharply revised down their future growth forecast for the eurozone, and expect it will remain in recession throughout this year.”
As it happens, this is based on a yet another revision of its previous predictions. In the year to December 2012 the deficit was £103 billion—£12 billion higher than it was for previous 12 months. Each time he stands up to announce cuts he claims at some point in the future the economy will improve, and each time he is wrong.
So the official forecast for growth in the UK economy this year has been halved. The reality is far worse.
Osborne pronounced, “Britain is open for business.”
He claimed his budget was fiscally neutral. What that means is that every tax cut for the rich is paid for with spending cuts for us.
He also cut National Insurance payments for employers with an increased £2,000 allowance. Some 450,000 companies won’t pay any national insurance contributions at all. Workers will pay more national insurance from 2016.
He cut a range of tax relief for the bosses including tax break for fracking. He said, “Shale gas is part of the future and we will make it happen.”
The bosses were happy. Simon Walker, director-general of the Institute of Directors said, "We applaud this Budget. The chancellor has stuck to his guns and held his nerve—which is exactly what we wanted to see”
In stark contrast, he added another year of 1 percent pay cap for public sector workers.
Teachers, NHS workers, and civil servants currently get pay rises along a sliding scale for their pay grade, so long as they meet career appraisals.
This is to be replaced. The Treasury is also pushing for any grade increase rises to be included in his 1 percent pay cap.
Even those proposals that are supposed to benefit workers benefit the richest more. So the changing of the tax free income allowance to £10,000 will mean just £2 a week from 2014 for most people.
The cuts are hurting millions of working class people and the message from the chancellor is they will get worse. But they will make sure their millionaire mates still get more cash.
David Cameron left after the speech to sit down to subsidised roast beef dinner washed down with a glass of good claret. But even in Westminster there is resistance, as at least three of the restaurants that provide for politicians are closed by the PCS strike.
We need much more resistance to stop the Tory toffs riding roughshod over the rest of us.