My response to the Budget
It is clear that we are not “all in it together” as the Government claims. Buried in the small print of the Budget is that George Osborne has hit pensioners with a “granny tax”, with £3 billion being taken away from pensioners over the next three years. In real terms, they will lose on average £83 per year. People who are turning 65 next year will lose out the most – losing up to £322 per year.
Furthermore, the Government’s cuts to child benefit are extremely unfair on families in the middle already feeling the squeeze. Under the Government’s plans, a two-earner family each earning £49,000, a total of £98,000, would keep all their child benefit, but a single-earner family on £50,000 would lose it all at a stroke. A family in York earning £20,000 per year, that has children, will lose £253 a year from this April. This is on top of the VAT rise which is costing a family an average of £450 per year. Changes to the eligibility rules for working tax credits are also due to come into force in just a few weeks’ time which means that couples earning less than around £17,700, who have children, will need to increase the number of hours they work from a minimum of 16 to 24 hours per week or they will lose all their working tax credit of £3,870 per year. This change is set to affect 212,000 households, including 470,000 children. The Government has admitted that some families with children, earning minimum wage, could end up being £728 per year better off out of work as a result of these changes.
Meanwhile, top earners will pay less tax. The richest 300,000 taxpayers (out of 20 million taxpayers) will gain on average £10,000 and the very highest earners, those who earn over £1 million per year, will receive a tax cut of £40,000 per year. These tax cuts will lose the government £3 billion a year.
The Government’s economic policies are simply not working. They are reducing growth. This means that more people are out of work, claiming benefits and not paying taxes; therefore increasing the cost of welfare. One million young people are unemployed, including 2,654 in my constituency and 171,924 across the region. When Labour left office in 2010, the national debt stood at £760 billion. Under the Coalition it has already risen to £1044bn – the highest debt ever – and is set to exceed £1515 billion by 2016/17. The Government tells us that times are hard. Times are hard but they are being made a lot harder by the Government’s policies. If there has to be pain, the pain should be shared by everyone – the wealthiest few should not be spared at the expense of ordinary families.