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Budget brought more for the rich and cuts for us

George Osborne used the budget last week to push through further attacks on ordinary people. Simon Basketter looks at the facts and figures

Issue No. 2396

Who lost out in the budget

Who lost out in the budget


Tory chancellor George Osborne presented his budget last week, declaring, “You’ve earned it, you’ve saved it. This government is on your side”.

That’s true if you are well off.

But if you don’t earn enough to save up to £15,000 a year, if you can’t afford a private pension, if you struggle to find work or to afford childcare so you can work, then Osborne finds you irrelevant.

The Tories have capped total welfare spending. That means they will argue there have to be even more cuts to benefits.

The amount spent on welfare, as a percentage of national output, is set to fall steadily over the next five years.

Osborne set a cap on overall annual welfare spending of £119.5 billion for the first year of the next parliament.

He has already said he wants to see £12 billion more sliced off the ­welfare bill—currently £112.5 billion—in the two years following the May 2015 general election. Labour has said it will vote for the cap.

He made a series of pension changes that mostly affect people with private pensions. They will be able to cash in their pensions on retirement and will pay some tax on it.

In contrast according to the Treasury’s own figures the poorest 20 percent of people will be £817 worse off because of changes brought in by George Osborne’s budgets.

The poorest 30 percent of people are all directly worse off because of this budget. Across Britain an average worker earns £2,000 less in real terms than they did in 2010.

The real value of average earnings is down 13.8 percent since 2008.

The Tories’ tame Office of Budget Responsibility has said wages won’t get back to 2008 levels until at least the end of 2017—later than they had previously predicted.

Osborne’s talk of helping manufacturing in reality was tax breaks to bosses.

The announced clampdown on tax avoidance simply involves making people pay tax for disputed schemes—and if they are ruled OK they get a rebate.

The chancellor told MPs, “None of these decisions are easy, but they are the right thing to ensure Britain lives within her means.”

The cuts are hurting millions of working class people and the message is that it will get worse.


'Green crap' cut for the bosses

On the current figures there are another £25 billion of public sector cuts to come after the next election. 

According to government plans, spending on services will be reduced to their lowest share of GDP since 1948.  

Importantly only a third of the cuts have been implemented so far. 

In contrast to the cuts Osborne announced more tax breaks for bosses. 

Money to help bosses who export goods will be doubled to £3 billion. Other business-friendly moves included a doubling of the annual investment allowance which helps firms buy new machinery, and changes to research and development tax credits.

Osborne also announced a tax on private jets to prove the government is not just for the rich.

But he then cut taxes on Caribbean holidays.

He also slashed environmental taxes on businesses—or “green crap” as Cameron called them.


No tax break for the poor

On the current figures there are another £25 billion of public sector cuts to come after the next election. 

According to government plans, spending on services will be reduced to their lowest share of GDP since 1948.  

Importantly only a third of the cuts have been implemented so far. 

In contrast to the cuts Osborne announced more tax breaks for bosses. 

Money to help bosses who export goods will be doubled to £3 billion. Other business-friendly moves included a doubling of the annual investment allowance which helps firms buy new machinery, and changes to research and development tax credits.

Osborne also announced a tax on private jets to prove the government is not just for the rich.

But he then cut taxes on Caribbean holidays.

He also slashed environmental taxes on businesses—or “green crap” as Cameron called them.


Tories' 600,000 lost families

The complicated way people can get tax rebates on childcare costs were changed to another complicated scheme.

 The “subsidy” will benefit most the better off with both parents on incomes of up to £150,000 each.  

And here is the secret: the actual spending on childcare of £750 million won’t rise. The Treasury has cut its estimate of the number of families eligible from 2.5 million to 1.9 million.


No mansion tax for firefighters

Emergency service workers are excluded from inheritance tax. Which sounds nice but very few emergency service workers pay inheritance tax because the inheritance has to be worth £325,000. 

And Osborne announced the building of a new town at Ebbsfleet. But the Tories announced it two years ago and it still isn’t built.

 


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Article information

Background Check
Tue 25 Mar 2014, 17:43 GMT
Issue No. 2396
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