Wednesday, 8 July 2015
My Reaction to the Budget: 8th May 2015
There is a mixture of good and bad in Osborne's first post election budget. Mostly bad. However in the interests of balance I'll start with the good:
New national living wage will be introduced for all workers aged over 25, starting at £7.20 an hour from April 2016 and set to reach £9 by 2020 - giving an estimated 2.5 million people an average £5,000 rise over five years.
Fine. A step in the right direction. However many would now question whether £7.20 an hour really is a living wage when rents are rising and in-work benefits cut.
Personal allowance, at which people start paying tax, to rise to £11,000 next year. The government says the personal allowance will rise to £12,500 by 2020, so that people working 30 hours a week on the minimum wage do not pay income tax.
Tax credits and Universal Credit to be restricted to two children, affecting those born after April 2017.
Yes. This needs doing. We must stop paying people to have children. However it should not affect people who already have more than two children. Also it doesn't go far enough. Wealthy people who have more than two children should face tax increases.
Permanent non-dom status to be abolished - from April 2017, anyone who has lived in the UK for 15 of the past 20 years will pay same level of tax as other UK citizens, raising an estimated £1.5bn.
A good idea.
NOW FOR THE BAD.......
There are so many that I will just highlight the main ones:
Working-age benefits to be frozen for four years - including tax credits and local housing allowance, but maternity pay and disability benefits exempted.
The annual household benefit cap will be reduced to £23,000 in London and to £20,000 in the rest of Britain.
Basically an all round attack on the poor. Most people who claim benefits are in work.
18-21-year-olds will not be entitled to claim housing benefit automatically, with a new "earn to learn" obligation.
Or in other words, the under 21s will be prevented from getting Housing Benefits via the introduction of a load of hoops to jump through. More young homeless on the streets.
Student maintenance grants to be replaced with loans from 2016-17, to be paid back once people earn more than £21,000 a year.
Driving students into more and more debt. A stealth tax on those who work hard at school and try to get on while those with rich parents get hand-outs from mummy and daddy.
A consultation will take place on changing Sunday trading laws.
Thus damaging family life, creating a 7 day working week and eroding the rights of people to leisure time.
£7.2bn to be raised from clampdown on tax avoidance and tax evasion with HMRC budget increased by £750m.
WHAT? When there is an estimated £120 billion lost in tax evasion and tax avoidance? Nowhere near enough.
Rents in social housing sector will be reduced by 1% a year for the next four years.
Good grief, WHAT ABOUT THOSE IN PRIVATE RENTAL ACCOMODATION!
Inheritance tax threshold to increase to £1m, phased in from 2017, underpinned by a new £325,000 family home allowance.
And they say its a time of austerity. That we are all in it together. A massive tax break for the wealthy.