ARE WE really all in it together – in this so-called age of austerity, when the government is cutting spending programmes, cutting or capping welfare payments – but cutting income tax for the rich too?
Earlier this week there was a vote in the House of Commons to approve the capping of some (but not all) welfare benefits to a one per cent rise over the next three years. Not surprisingly there were howls of anguish as opposition politicians decided this was unacceptable and that those on benefits should be entitled to at least inflationary rises.
Personally I found the stench of hypocrisy from the critics more unpalatable than that of the evil, two-headed, blood-drinking, knuckle-draggers – or whatever else some might want to call the Tories (though let us remember the Liberal Democrats have officially agreed to it to).
Across Scotland and the rest of the UK, people working in the public sector have, over the last few years, been made to take a pay freeze and are only now being able to look forward to a future pay rise of one per cent. Surely it cannot be right to expect those in work, often in low pay, to bear the burden of austerity while those not able to contribute can see their benefits improve at a greater rate?
If we need to make sure that it is always more attractive to work than not – so that as many people as possible contribute towards the benefits that they enjoy as a public good (such as policing, healthcare and defence) or as a personal benefit (such as a pension, a free school meal or a buss pass) – then we cannot make living on welfare a lifestyle choice rather than a safety net.
To hear the likes of the SNP’s John Swinney attack Westminster and suggest an independent Scotland would be different is simply laughable. A separate Scotland would have to stand on its own and, like any nation, face its own hard choices. The case of Ireland springs to mind – a sovereign land where politicians beyond the influence of London have really hit the austerity button. Pay cuts of ten per cent have been forced on public servants and the welfare budget trimmed ruthlessly. And it’s working! Ireland is showing signs of economic recovery of which other nations are envious.
It should also be remembered that we are already living way beyond our means. We don’t actually have the money to pay for everything the state does in our name. We fund this gap, known as the deficit, by borrowing money that our children and their children will have to pay for when they become adults. Voting for greater public spending, and especially welfare, is voting to live off the backs of children not yet born who have no say in the matter. I cannot think of a more morally repugnant policy.
And it gets worse, for that deficit is added to the running total that we call the national debt and this incurs a borrowing charge, or interest, that is now greater than what we spend on defence or education. Imagine what more we could do if we did not have that interest to pay?
Our Members of Parliament have a moral duty to ensure that there is restraint in the public sector and the welfare budget. Given that welfare payments have risen by 20 per cent over the last then years and earnings have only risen by 12 per cent we need to bring the two into line.
But wait, what about those tax cuts for the rich? Why are they getting off with it when the rest of us are paying?
Well, it’s a lie – they’re not.
In April the thresholds for paying tax will rise for everyone by £220 – that change will make a bigger difference to someone on £18,000 than on £180,000 – and the plans are to keep raising the starting threshold more and more.
Secondly, the tax cut from the 50p top rate of tax to 45p will, and I know this seems perverse, result in the wealthiest paying more tax as it becomes marginally more attractive to be in Britain as a taxpayer and to work harder and take more pay home. Having fallen by £7 billion after the tax rise, revenues from the rich will now increase.
In fact, HM Customs & Revenue calculations show that the tax changes (including all other taxes) will see someone on £10,000 better of by 27 per cent, on £15,000 by 16 per cent and on £30,000 by four per cent. Anyone on £100,000 will be worse off by five per cent, on £200,000 by 17 per cent and on £1 million by 24 per cent.
So the rich are making a bigger contribution and yes we are in it all together, though it may be no consolation to those seeing their benefits capped. For politicians like Miliband, who calls for a One Nation Society, to set rich and poor against each other shows the depths to which he will stoop to con the British public. He must have learnt his trade at the feet of Tony Blair.