The Coalition’s changes to taxes and benefits have hit low-income, working-age households the hardest – costing the most hard-up (those with children in the lowest 10 per cent of earners) a massive £1,223 per year.
A report by the Institute for Fiscal Studies also states that the richest 10 per cent of households with children lost £5,350 a year, on average. This means that those in the lowest income decile have lost the most, in both real-money terms and as a percentage of their income.
Hang on! Hasn’t the Coalition been saying that top-earners have been hit the hardest by their ‘reforms’? Have ministers been lying to the nation yet again?
We may as well answer that straight away: Yes.
It is only when changes introduced by the previous, Labour, government are included in calculations that those in the highest-income group are shown to be feeling the pinch more than the poorest in society.
Let’s think about that for a second. Doesn’t this show that the last Labour government had its heart in the right place, was doing what it could to protect low-earners and was aiming its version of austerity where such policies belonged – at the rich?
We may as well answer that straight away, as well: Yes. Yes it does.
And Labour has moved to capitalise on this. Shadow treasury minister Cathy Jamieson said: “For all the government’s claims, this report shows that they have raised tax by over £13.5 billion a year. And for millions of working people the rise in VAT and cuts to things like tax credits have more than offset changes to the personal allowance.
“Families with children have been hit hardest of all by David Cameron’s choices – a clear betrayal of his promise to lead the most family-friendly government ever.
“The Tories are now promising to cut tax credits again for millions of working families and refusing to rule out another VAT rise to pay for their unfunded promises. It’s clear working people can’t afford five more years of this government.”
She said Labour’s plan “will ensure we earn our way to rising living standard for all”, reversing the Coalition’s “£3 billion a year” tax cut for the top one per cent of earners and helping 24 million working people by restoring the popular 10p starting rate of tax.
Before we start ringing the victory bells for Labour, though, the IFS report also states the following: “Middle-income working-age households without children have gained the most from the Coalition’s changes. They have gained significantly from the Coalition’s large increases in the income tax personal allowance and are much less affected by benefit cuts.”
It follows that those on middle incomes – that’s not the average income; it means incomes in the middle of a range that continues into the stratosphere, due to rises in executive pay levels – are likely to support the Tories, along with pensioners who have also been largely unaffected (so far – it’s future pensioners who have been hit hard).
The question is, will these groups be happy to sit in their own, insulated little world, selfishly ignoring the collapse of the country all around them – the deliberate underfunding-to-destruction of the NHS, the institutionalised torture of benefit claimants, moves that deny the justice system to those who can’t pay for it, plans to end human rights in the UK, plans to allow fracking under their homes, an economic policy that relies on them going into debt by almost twice as much as they earn (enough to have them legally declared bankrupt if they have trouble paying it back)… the list is endless…
Are middle-earners and pensioners so selfish that they will vote the Tories back into power just because, in a country that is collapsing around them, as the saying goes:, they’re “all right, Jack”?
Follow me on Twitter: @MidWalesMike
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