In 2011, the year that followed his first pronouncements, there were major riots. Research using data collected over the course of the last century has shown that riots in Europe have been more common whenever there have been cuts of this kind.
A budget, an autumn statement and another budget further on, and on 5 December 2012, 41 year old George delivered his third autumn statement. If anything he had hardened his attitudes with a little aging.
In December 2012 Osborne announced that for people on benefits – people he described in his autumn statement speak as “staying in bed” while “others went out to work” – there would be real cuts in their incomes with below inflation increases.
This would “save” £3.7 billion by 2015/16 – a very small amount for the exchequer, a huge amount for those already on the lowest incomes suffering the highest proportionate cuts. He then had the temerity to claim that we were “all in it together” as higher rate taxpayers would see the threshold at which they started to pay the high rate increase by “only” 1 percent.
Because Osborne had not raised the high tax rate threshold by the rate of inflation, that slightest of progressive moves in taxation would net him £1 billion extra tax, although each individual higher rate taxpayer would hardly notice the difference. This was, in general, the model of the 2012 autumn statement. People at the bottom suffered most, but for every £3.70 they lost higher earners lost £1. However, those at the very top gained.
Corporation tax was slashed again, to fall even further than promised before to be just 21 percent by April 2014 – one of the lowest rates to be found among all rich countries. Firms are being taxed less and less on their profits, so more of those profits go to the tiny number of people who own most of those firms.
Repeatedly we were told that this was all to “ensure that Britain wins the global race”.
Presumably this is a race to the bottom, to attract the most unscrupulous firms in, to encourage those with more of a sense of civic pride to leave the country, a race to have some of the lowest of all welfare payments in Western Europe, a race to unravel as much of the state as quickly and potentially permanently as possible, a race to promote the arms trade (Osborne said “aerospace” would get more money), a race to provide even more tax loopholes to business.
Empty property tax relief, on houses that could be homes, would be increased for property speculators, small business tax relief would be increased “tenfold” on investments and the money to do this would come from cutting Income Support, Job seeker’s Allowance, Tax Credits, Child Tax Credits, Working Family Tax Credits, and Child Benefit.
Osborne announced with pride that the “rich will pay a greater amount of income tax” in every year of his government as compared to the last government. Of course they would, because they were being allowed and encouraged to pay themselves more and more, so they paid a little more tax too. At the same time most people’s incomes were not rising, so their tax contributions could not rise.
Only about 7 percent of people ever pay inheritance tax. Despite this the inheritance tax threshold was raised from £325,000 to become £329,000 by 2015/16, so that those with property worth a third of a million and more would not be taxed on a further £4,000 upon their deaths. This was a specific measure to target monies to the offspring of some of the richest people in Britain.
Similarly, those investing in fracking shale gas were to get incentives to increase carbon pollution, and the proposed increase in fuel duty was to be abolished. This would redistribute monies from those who do not drive, or who use the bus, towards car drivers and, again, would encourage individual pollution.
At the same time, often in almost the same breath, variable salaries were to be brought in for teachers, to get them to compete against each other, not just for work, but now for their wages. A billion pounds was found to set up 100 new “free schools” that parents could then fight to get their kids into.
If there was one overall theme to the 2012 autumn statement it was that if a policy further divided rich from poor and increased other divisions in society, that was a policy that George Osborne favoured.
If a tax could be changed to increase environmental harm, then the change was made.
Just over 70 years to the day that the Beveridge report was released, and with a smirk on his face throughout almost the entire proceedings, and flanked by Danny Alexander and Nick Clegg to his left and right, Mr Osborne stuck the knife in again and again to the welfare state and the ideal of social solidarity.
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