Tag Archives: tax credits

Coronavirus: DWP adds insult to injury over tax credit and Universal Credit claims

It seems the Department for Work and Pensions has found a new way to humiliate benefit claimants during the coronavirus crisis.

The government department that handles the benefit system is using tax credit records to check the identities of people claiming Universal Credit.

But it is then cancelling the tax credit claims – regardless of whether the UC claim is allowed – because UK citizens are not permitted to receive tax credits after claiming UC.

It seems it does not matter if the claim is successful.

The government refuses to provide guidance on whether a person is better-off claiming tax credits or Universal Credit.

It seems this, as part of 20 new measures brought in to speed up the assessment of two million UC claims since the coronavirus lockdown started, has made it possible to get nine payments out of every 10 to the claimant on time.

I wonder how many claims have been successful, though – and how many tax credit claims have been cancelled, leaving the claimant with nothing?

Apparently the DWP’s Universal Credit supremo, Neil Couling, reckons many of the measures will be retained after the crisis is over – but the requirement to seek work will return.

No surprises there, then! Forcing people not only to look for jobs but to seek more hours and better pay – despite the fact that employers offer the exact opposite – is the contradiction at the heart of Universal Credit.

And Mr Couling says nothing to suggest the government will push employers to provide better offers.

Source: New Universal Credit measures to remain after lockdown eased | Express & Star

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Tories tell DWP to strip families of tax credits if they make Universal Credit claim

It would have been nice to be told this in advance.

Apparently more than two million people have claimed Universal Credit after losing income because of the coronavirus crisis.

If any of them were claiming tax credits before applying for the benefit, they have been cancelled.

And the government has refused to give advice on whether a person is better-off claiming tax credits or Universal Credit.

Add it all up and if it looks like a trap, then that’s what it is.

The guide published by the DWP explains that “not all tax credit recipients will be eligible to receive universal credit. If you claim universal credit, your tax credit claim will be closed, even if you aren’t eligible to receive universal credit.”

The UK government has also refused to give guidance on which benefit people should be claiming, stating: “DWP and HMRC cannot advise whether claiming universal credit or tax credits will be better for you.”

SNP MSP Bob Doris said… “This guidance appears reckless and spiteful. Now, more than ever, we need a welfare system which is easy to use, so that people don’t fall foul of the complexities of applying for benefits and end up with no support whatsoever.”

There is a welfare system which is easy to use – they’re using it in Spain right now. It’s called Universal Basic Income.

The UK’s Tory government passed on that. It preferred the complicated way.

We see now that this is because it would cause the maximum harm to the greatest number of people.

And every day they tell you they’re doing their best to protect you. And every day millions of people believe them.

If you’re on lockdown and looking for something useful to do, here’s a thought:

Why don’t you tell people what’s really going on?

Source: ‘Reckless and spiteful’ DWP stripping families of tax credits after an unsuccesful universal credit claim – Welfare Weekly

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Five things George Osborne doesn’t want you to mention about his spending review


Let’s mention them:

Tory backbenchers cheered, but plenty of people will be hit. As experts look for the devil in the detail, here are five changes already causing alarm.

1. Grants abolished for nurses

Student nurses are to have their grants cut and will instead have to take out loans to pay for their tuition fees. A saving of up to £800m a year for the Government, some would-be nurses have already been put off. Katie, who planned to enrol on a postgraduate diploma in adult nursing next year, told HuffPost UK: “The NHS are crying out for nurses, more so those who have a bit of life experience behind them. But these cuts look to have more than out priced many of us.”

2. Tax credits protected – for now

The reversal of cuts to tax credits will avoid almost all the immediate losses next April, on average a £1,300 hit per family on the top-up benefit for workers. But as the Chancellor said: “Tax credits are being phased out anyway as we introduce Universal Credit.” So the Universal Credit – all welfare payments rolled into one – is likely to contain the cut when implemented in 2020. The Resolution Foundation says that by 2020 more than 3 million households are still set to lose an average of £1,000 from the £3.5bn cut. “Pain tomorrow is better than pain today – but it is still pain,” said Torsten Bell, director of the Resolution Foundation.

3. Free childcare limited

A flagship pledge of 30 hours of free childcare for three and four year olds has been scaled-back, meaning it will only available to parents working more than 16 hours a week when it launches in 2017. It will also no longer apply to families with incomes of more than £100,000. The biggest victims? Single parents working part-time. The Family and Childcare Trust warned of a “new barrier to work for those parents”. “We urge the Government to re-examine these criteria so that all working families can benefit from this generous offer,” said chief executive Julia Margo.

4. Housing benefit crackdown

A cap on housing benefit for new tenants in the social rented sector was announced. The reform will mean that housing benefit will “no longer fully subsidise families to live in social houses that many working families cannot afford”, official documents said as it bring rules in line with the private sector. The disability charity Mencap warned: “This could seriously impact on people with a learning disability living in social housing and specialist supported housing, jeopardising their ability to live independently in their communities.”

5. “£56 added to the tank”
Tucked away in the Autumn Statement “scorecard” is a saving of around a quarter of a billion pounds every year by retaining the diesel supplement in the company car tax until 2021, when new cars will have to be cleaner. This will cost the average BMW 3 Series driver in a company car £182 if they are the basic rate taxpayer, and £365 for higher rate taxpayers. Treasury sources said that £126 would be deducted by employers via National Insurance – but that is still a fuel tax hike of £56. Not a great message to send “hard-working families”.

Source: 5 Things George Osborne Doesn’t Want You To Mention About His Spending Review

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Russell Howard tells it like it is about tax credits and tampons (STRONG LANGUAGE)

Russell's opinion of Philip Davies after the Shipley filibusterer talked out a proposed law to help carers park at hospitals.

Russell’s opinion of Philip Davies after the Shipley filibusterer talked out a proposed law to help carers park at hospitals.

This Blog has been waiting more than a week to put up this clip of Russell Howard taking the Tories to task over their plan to cut tax credits and their refusal to end the tampon tax.

Here it is, but be warned – the language is spicy!

Russell is originally from Bristol, just like This Writer. He has been dishing it out to our dish-faced prime muppet since his new serious began on BBC2 a few weeks ago. It airs at 10pm every Thursday – last time round he gave Philip Davies a trouncing for talking out the Bill to end hospital parking charges for carers.

As a carer myself, I could not agree with Russell more.

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‘Evasive’ Osborne must rethink tax credit reforms, MPs warn

Swallow your pride, George: Osborne must accept that his plan to impoverish working people is not going to be accepted.

Swallow your pride, George: Osborne must accept that his plan to impoverish working people is not going to be accepted.

A damning report on George Osborne’s plans for tax credits has demanded that he must rethink the cuts, saying they run against the government’s stated objective of “making work pay”.

The Commons Work and Pensions select committee told Osborne to get his act together in its report, A reconsideration of tax credit cuts, published on November 9.

It stated: “The proposed changes to tax credits in April 2016 will result in very substantial cuts to the incomes of working families, including many with children. There is now general agreement that it would be right for the Chancellor to rethink reforms that went too far and too fast and may have most impact on those in work and striving to succeed.

“Furthermore, by increasing the rate of withdrawal in taxes and benefits to as much as 93 per cent of additional income, the cuts run against the Government’s objective of making work pay.”

That’s an effective tax rate of 93 per cent on extra money earned. Isn’t Osborne the Chancellor who said a 50 per cent tax on high earners was too much?

The committee warned that Osborne was being disingenuous in his claim that in increase in the income tax personal allowance, the gradual introduction of a higher minimum wage and an expansion of free childcare would mitigate the tax credit cuts – make them less harsh.

“These measures are welcome,” the report stated. “However… they benefit very different parts of the working population. The majority of working families affected by the proposed cuts would still be worse off in 2020-21 as a consequence of the Budget package. We therefore welcome the Chancellor’s commitment to additional measures to lessen the impact of the tax credit cuts.”

But there was a warning that any more tinkering with separate policies would be frowned upon, if they were announced in the autumn statement: “In the same way that the increase in the personal allowance and minimum wage announced in the Budget do not offer targeted respite from the tax credit cuts, further such changes are not the Chancellor’s answer.

“The gains are to individuals rather than households and are too diffuse to efficiently compensate families facing tax credit cuts.

“The way to focus on those households is to use the tax credits system. The answer to tax credits is tax credits.”

There was a stinging rebuke for Osborne and the Treasury over its failure to provide information about the effect the proposed changes would have on people in different income groups.

“The Treasury has been unacceptably evasive,” the report stated. “The Government ought… to have been more forthcoming with statistics about flows on and off tax credits. Their obfuscation is not consistent w

ith effective scrutiny; nor is it consistent with effective policy-making.

The conclusion was clear: Osborne must swallow his pride and accept that he can still achieve a balanced budget by 2019-20, without imposing cuts of £1,100 per household in a single stroke.

“There is no magic bullet within the tax credit system,” the report stated. “One of three things has to give: the impact on poverty, work incentives or the cost. If one accepts both that the proposed cuts to some families are too great and that the limits of damage to incentives to work have been reached with deduction rates of up to 93 per cent, then a reduction in fiscal savings is inevitable.

“The Government’s commitments, both to cut working-age welfare expenditure and to achieve overall fiscal balance, are to be achieved by the end of the current Parliament. Their achievement would not be compromised by the phasing-in of the tax credit cuts.”

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Why does George Osborne have it in for the workers?

Matters have come to a pretty pass for the Conservative Party – and so soon after the election! – if arch-Tory Fraser Nelson is prepared to shoot them down.

Not only that, but the target is potential prime ministerial candidate George Osborne. What are his hopes worth now, when he’s busily turning his entire party into a gang of hypocritical exploiters of the poor, just to save his own face?

The Chancellor has run out of good options. He must now either abandon his plans to find £12 billion of savings by targeting the working poor – or stick to his guns, and destroy the Conservatives’ claim to being the new “workers’ party”.

Like all of the worst political messes, it was created by a pile-up of accidents. Its origins were during the election campaign, when Mr Osborne said he’d find £12 billion of welfare cuts and, as a result, run a budget surplus.

The Chancellor never said where he would find such extraordinary savings, because he didn’t know. It was a ruse, a figure designed to be bargained down by Liberal Democrats in coalition talks that, then, seemed inevitable.

Osborne ended up as Chancellor in a majority Tory government, saddled with a pledge that even he had never really taken seriously. But to admit as much, he calculated, would be too embarrassing – so he got to work on the tax credit budget which subsidises low salaries. In other words, the “workers’ party” would be coming after the workers.

Taking money away from millions of working families already on the breadline has proved politically horrific. These are the people doing everything the Tories have asked of them, and can’t now understand why they are being penalised.

No moral thread runs through his plans for working tax credit cuts. For most who claim them, the £9 an hour living wage will not repair the damage. Not only does it punish the strivers, but it’s not even needed to balance the books.

He is proposing to come after those claiming Universal Credit, the Government’s flagship welfare-to-work scheme.

It was designed so no low-waged worker would pay a higher tax rate than 55 per cent. It’s a rather high rate, but as the Prime Minister put it, the beauty of Universal Credit is that this rate could be cut in future Budgets. His Chancellor, however, disagrees. The Treasury demanded that the first workers on Universal Credit would face an eye-watering effective tax rate of 65 per cent. And now, to pay for a partial retreat on tax credits, the Chancellor is planning to take this to 75 per cent – and perhaps even higher.

Such a high rate, of course, destroys the whole point of Universal Credit. The low-waged would be swapping one welfare trap for another.

How will a Tory Chancellor, with ambitions to be a Tory Prime Minister, explain why he is raising taxes on poorest workers – especially after lowering taxes for the richest?

Yet again, we can see the Chancellor’s biggest political weakness – he is so clever that he’s downright stupid.

The thrust of his reforms flies in the face of everything the Conservatives purport to stand for.

Source: Why does George Osborne have it in for the workers? – Telegraph

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After the defeat, the threats: Osborne bites back over tax credits

Humiliated: George Osborne tried argument and threats but the Lords ignored him [Image: Corbis].

Humiliated: George Osborne tried argument and threats but the Lords ignored him [Image: Corbis].

First, the climbdown: After suffering a humiliating defeat at the hands of the Lords, George Osborne has told us all that he meant it when he said he would listen, and now he’s going to offer help to people who will suffer from the loss of income represented by his tax credit cuts.

That’s right, he reckons he can achieve the savings he wants, and offer help to his victims. He’ll set out the ways and means in his Autumn Statement in December. Why didn’t he offer this in the first place?

Then, the counterattack: Osborne also said that the government’s defeat by the Lords means a constitutional issue has arisen, and he will address that alongside David Cameron. What he means is: He didn’t have his way, this has got him all upset, so now he wants the people who upset him to be upset too.

Presumably, this is exactly what people mean when they talk about the “politics of the playground”.

He left the threat hanging – no specifics – but already commentators are suggesting that any minor Tories who thought they might get a chance to wear ermine are set for disappointment.

Here’s Osborne’s comment: “Tonight unelected Labour and Liberal lords have defeated a financial matter passed by the elected House of Commons and David Cameron and I are clear that this raises constitutional issues that need to be dealt with.

“However, it has happened and now we must address the consequences of that. I said I would listen and that is precisely what I intend to do. I believe we can achieve the same goal of reforming tax credits, saving the money we need to save to secure our economy, while at the same time helping in the transition. That is what I intend to do at the autumn statement. I’m determined to deliver that lower welfare, higher wage economy that we were elected to deliver and that the British people want to see.”

It’s handy that he raises a point about the election there…

The Conservative Government was elected after David Cameron twice promised – on television – that tax credits would not be cut. While it is certainly true, as Baroness Stowell stated, that social security cuts totalling £12 billion were mooted prior to the election, the Conservative Party was careful never to admit where they planned to wield the axe. No mention was made of tax credit cuts in the Conservative manifesto.

So the Lords rejected a measure the government had no mandate to pursue, about which the Prime Minister had, intentionally and with malice aforethought, deceived the public.

Isn’t it the Conservative Government that has acted unconstitutionally?

Going into it all a bit deeper, Osborne’s claims fall flat. The Lords votes might have been questionable if they had been blocking a manifesto commitment, but they weren’t; if they did not normally block secondary legislation, but they have; or if they were amending a budget measure, but they weren’t. The government could have put tax credits into their Finance Bill but chose not to.

There is, however, reason for the Lords to be ashamed.

All this fuss over a tax credit cut of £1,300 for three million families, and the action that the Lords have taken, serves as another slap in the face to people on long-term sickness or disability benefits who have been subjected to cuts in the amount of benefit they receive, changes to the assessment system in an attempt to claim that they are “malingerers” who are “faking it”, sanctions and unfair decisions that have led to far greater loss of income and even – in more cases than have yet been mentioned – loss of life.

Where was all the outrage when changes to their benefits were passing through the House of Lords?

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Showdown between the Lords and the Tories over tax credits

Baroness Meacher: Her motion that the Lords should “decline to consider” the plan to cut tax credits will be considered “fatal” by the Conservative Government.

Today’s the day the Lords decide whether to defy the Conservative Government and delay – or even kill – plans to cut tax credits and plunge millions of UK families further into poverty.

They will debate no less than five motions on the Tax Credits (Income Thresholds and Determination of Rates)(Amendment) Regulations 2015 – including two declining to consider the statutory instrument, one declining to accept it and one “motion to regret”.

The Conservative Government has said it regards all four as “fatal motions”.

In politics, a fatal motion means only one thing: the death of a proposed new law, pushed off its legislative mortal coil by the votes of MPs and peers in the division lobbies of Parliament.

And that is the fate that some peers are threatening to inflict on the government’s plans to cut more than four billion pounds of tax credits.

The government wants to introduce the cuts not though the traditional route of a Finance Bill but via so-called secondary legislation. This is how most laws are made – technical changes pushed quickly through Parliament within the framework of existing Acts.

Peers will have several possible options.

They could vote to kill the cuts outright by supporting a so-called “fatal motion” tabled by the Lib Dems. This would simply “decline to approve” the government’s plans.

Or they could vote for a motion tabled by the crossbench peer, Lady Meacher. This would delay the tax credit cuts until the government has taken into account an impact analysis by the Institute for Fiscal Studies “and considered possible mitigating action”.

Or peers could vote for a Labour motion tabled by Lady Hollis. This would delay the cuts while the government introduced transitional measures to protect claimants affected by the changes.

The Tories say that any motion that does not approve the secondary legislation is a fatal motion.

Labour dispute this analysis.

The officials and clerks in the House of Lords… are rather caught in the middle.

They are clear that all the options open to peers on Monday are legitimate from a constitutional point of view. But they equally admit that all the options would have substantial political consequences.

Source: Could ‘fatal’ Lords motion kill tax credit cuts? – BBC News

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Corbyn forces Cameron to ‘clarify’ EU in-out negotiations

131105europe

When David Cameron woke up this morning (Tuesday), it may have been to the realisation that he said too much in response to a grilling by Jeremy Corbyn over Europe yesterday.

Cameron had been to a meeting of the Council of Europe, the regional intergovernmental organisation with 47 member states best know for its operation of the European Court of Human Rights. One of the subjects he discussed there was the UK’s attempts to renegotiate the conditions of its membership in the European Union. He said:

“On the UK’s renegotiation, I set out the four things that we need to achieve. The first is sovereignty and subsidiarity, where Britain must not be part of an “ever closer union” and where we want a greater role for national Parliaments.

“Secondly, we must ensure that the EU adds to our competitiveness, rather than detracts from it, by signing new trade deals, cutting regulation and completing the single market. We have already made considerable progress. There has been an 80 per cent reduction in new legislative proposals under the new European Commission, and we have reached important agreements on a capital markets union, on liberalising services, and on completing the digital single market. Last week the Commission published a new trade strategy that reflects the agenda that Britain has been championing for years, including vital trade deals with America, China and Japan. But more needs to be done in that area.

“Thirdly, we need to ensure that the EU works for those outside the single currency and protects the integrity of the single market, and that we face neither discrimination nor additional costs from the integration of the Eurozone.

“Fourthly, on social security, free movement and immigration, we need to tackle abuses of the right to free movement, and deliver changes that ensure that our welfare system is not an artificial draw for people to come to Britain.”

Mr Corbyn instantly drew attention to matters that the PR Prime Minister had failed to mention. Noting that full discussion of the UK’s in/out referendum had been deferred to the December European Council meeting, he said:

“I think that all of us across the House and people across the country would echo the words of Chancellor Angela Merkel when she asked the UK to ‘clarify the substance of what it is envisaging’. There have been indications from Government advisers that the Prime Minister is trying to diminish the rights of UK workers through opt-out or dilution of the social chapter and the working time directive. However, other sources say the Prime Minister has retreated on those proposals.

“Working people in Britain are losing trust in a Government who attack their trade union rights and cut their tax credits, while giving tax breaks to millionaires.

“Will the Prime Minister confirm that Britain will remain signed up to the European convention on human rights and will not repeal the Human Rights Act 1998? The lack of clarity and openness from the Prime Minister means we do not know on what basis he is negotiating. Too often, we have been guided by anonymous press briefings from his inner court.

“Does he agree with Angela Merkel, as we on the Labour Benches do, that ‘there are achievements of European integration that cannot be haggled over, for example the principle of free movement and the principle of non-discrimination’? Again, clarity from the Prime Minister on that would be welcomed not just, I suspect, by his own backbenchers but by millions of people across the country.

“We believe we need stronger transnational co-operation on environmental and climate change issues, on workers’ rights, on corporate regulation and on tax avoidance.

“We will continue the European reform agenda. Labour is for staying in a Europe that works for the people of the UK and for all the people of Europe. We will not achieve that if all we are doing is shouting from the sidelines.

“On the referendum, will the Prime Minister confirm that the Government will now accept votes at 16 for the referendum, as per the amendment in the House of Lords?”

He also told Cameron that Labour will be “on his side” to support the proposed “red card” mechanism to give national Parliaments greater powers of influence over European legislation: “In fact, it is such a good thing that it was in Labour’s manifesto at the general election.”

Now on the back foot, Cameron had to work hard to regain the initiative. He started by claiming that the discussion of the referendum had not been deferred, but that the meeting in October had always been intended as an update, with a full discussion in December.

But he went on to contradict himself on “what we were delivering for working people in Europe”. Cameron said: “We are delivering two million jobs here in Britain for working people, with tax cuts for 29 million working people. I have set out in this statement again the reforms that we are pressing for in Europe.”

But later he added: “We do need to reform free movement; it should not be free movement for criminals or for people who are benefit shopping, for example, and we are already taking steps to ensure that that is not the case.”

So, he has delivered more jobs alongside tax cuts – making the UK a more attractive location for EU residents looking to immigrate in – but he wants to bar the entrance. This looks like a lie, to make it seem that Cameron has achieved something worthwhile.

The facts are that the jobs are low-paid and the tax cuts do not make up for the amount of income that working people have lost over the last five years of Tory rule. With the forthcoming tax credits cuts, millions of working people will no longer have enough money to make ends meet. That is the shame of the Conservatives and it is understandable that Cameron would want to hide it.

His dilemma is that it is his own rhetoric about his (imagined) achievements that is making the UK attractive to EU immigrants. We know the jobs are awful and the tax system has been skewed to benefit the rich, and we also know that the social security system has been sabotaged by Iain Duncan Smith – but that is because we live here. Citizens of other EU states are not so lucky. If Cameron was honest about the mess he has made of this country, his immigration problems would evaporate. His own public relations skills have betrayed him.

And worse was to come: “Our plans for a British Bill of Rights are unchanged. We want to get rid of the Human Rights Act and replace it with a British Bill of Rights.

“We voted in this House of Commons on votes at 16, and we voted against them, so I think we should stick to that position.” This will not please the Scots, where the voting age was lowered for their own referendum on whether to remain in the United Kingdom, and where democracy enjoyed a huge resurgence in popularity as a result.

Finally, there’s the elephant in the room. It is unfortunate that Mr Corbyn did not raise the Transatlantic Trade and Investment Partnership, one of the “vital trade deals” that Cameron mentioned. In its current form, this would mean control of workers’ rights, working conditions and the quality of products would be transferred from elected parliaments to faceless international corporations. It is the biggest threat to democracy facing us.

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Turn again, Tories! Will your policy today be your policy tomorrow?

[Image: Left Futures.]

[Image: Left Futures.]


We all know the answer to that question: It will if it harms people on middle or low incomes, and benefit claimants. The rich will be safe.

So David Cameron’s promise not to cut tax credits was a lie that will harm the hard-working people of the UK, even as the Public Relations Prime Minister works so hard to convince them that they’re better-off under him.

“The Conservatives are the party of the workers” – what utter nonsense!

Meanwhile, George Osborne has U-turned over ‘fiscal responsibility’ laws. Here’s what he had to say about them in 2010:

That was in response to a Labour law that the Conservative-led Coalition government repealed in 2011.

Now he has a ‘fiscal responsibility’ law of his own. What does he have to say about it?

“After all that Britain has been through, it is remarkable that the proposition in this Charter for Budget Responsibility should even be contentious. It states that now the economy is growing we should be reducing our exorbitant debts, and that we should do that each year by reducing the deficit until we eliminate it altogether and run a surplus. Once we have achieved that surplus, in normal times we should continue to raise more than we spend and set aside money for when the rainy days come.”

A child’s economics.

If a government is raising more than it spends, then it is taking money out of the economy; making the economy smaller.

If the economy was growing at a substantial rate – for example, due to the style of investment that Labour is advocating – then it would be possible for a government to achieve this without causing substantial harm. But the economy isn’t doing that. Tory austerity policies have limited the economic recovery since 2010.

Actually, no. Let’s not call them austerity policies any more. Let’s use the term a Vox Political reader rightly chose to describe them: Subjugation.

Subjugation, because the Tories are using their time in office to further enrich the privileged few with tax cuts, taking money from the poor to pay for them.

Subjugation, because the Tories hold themselves unaccountable, refusing to consider any challenges against their policies.

Subjugation, because the Tories intend to use their ‘fiscal charter’ – something George Osborne ridiculed before he took office – to inflict bitter poverty on the hard-working people of the world’s fifth-largest economy.

So let’s learn our lesson – and the lesson is this:

The only Tory promises you can believe are promises made to the rich.

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