While resignations and scandal swirled round them, the Tories wallowed in their plans for more attacks on workers.
Minister after minister spoke at the Tory party conference in Birmingham this week.
Iain Duncan Smith gleefully proposed restricting people on benefits to prepaid cards. Theresa May
proposed banning people from the airwaves who didn’t back democracy.
But it was Chancellor George Osborne who laid out the scale of the economic assault on Monday.
He promised a two-year freeze on benefits. With the rise in living costs, that’s a real-terms cut of £3.2 billion.
More than ten million households are directly affected by the latest attack, which hits five million working households and five million unemployed households.
More than five million working households will have their tax credits and child benefit payments cut for two years under the Tories’ plan to “finish the job”. The average amount a family will lose is £500 a year.
A single parent with two children, earning £25,000, will lose £75 in child benefit and £440 in tax credits.
A family with one earner on £25,000 and two children will be £495 a year worse off, while a couple earning £13,000 each with one child will lose almost £355 a year.
Millionaire wallpaper Baron Osborne also pledged to freeze
housing benefit, income support, job seekers’ allowance and other working age welfare payments for two years.
The Institute for Fiscal Studies (IFS) said that the benefits freeze would hit “largely working-age families in the bottom half of the income distribution”.
It estimates that by the time of the general election the number of children in relative poverty will have increased by 400,000 and the number in absolute poverty by 800,000 since the Tories came to office.
The IFS also calculated that the number in relative poverty will rise by 900,000 by 2020-21 and the number in absolute poverty by 1.4 million.
That is the reality of the Tory cuts and they are proposing to make it worse.
Osborne said he was humbled by the scale of future cuts. Everyone else should be outraged.
The Tories want another £25 billion of public spending cuts by 2017. Osborne had said that the bulk of this—£12 billion—would come from cutting the welfare budget.
Osborne has set a cap on overall annual welfare spending of £119.5 billion for the first year of the next parliament.
Labour has agreed to that and is also planning to freeze child benefit.
Cuts combined with vague proposals to tax Google and pension breaks for the rich (see below) may please the Tory faithful. But for the rest of us it should be a reason to get rid of the Tories as quickly as we can.
In contrast to the attacks on the poor Osborne announced a pension tax scam for the rich.
A higher rate taxpayer can now achieve a pension value of £1.5 million through a net cost of only £900,000, thanks to higher rate pension tax relief.
That’s quite a loophole.
They can then push up to £1.5 million in a pension pot outside of their estate and away from any inheritance tax.
Until now, the government put in place a special one-off tax charge if the cash was left to a relative.
That reduced the £1.5 million pension pot back to the level it would have been before tax relief was granted. The rich still avoided inheritance tax on the rest.
Osborne abolished that tax this week.
That means that the full value of a super-rich pension will now pass to their dependants tax free. That includes the higher rate tax relief—around a third of the pension’s value.
What’s more, if the money is used carefully they can avoid paying any tax on it at all.
So what Osborne means by fairness in pensions in fact means handing millions in tax breaks to the rich.
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