This was supposed to hide another policy tweak that is nakedly for the benefit of the rich — the raising of the threshold at which inheritance tax is paid, so that £1m houses can now be handed on to children without the state taking a penny, an increase from £650,000. Even the Daily Telegraph had trouble justifying that.
“Today’s emergency Budget has brought huge inheritance tax savings for people with expensive properties,” an article explained.
It was also supposed to divert us from noticing a cut in corporation tax, and while a clampdown on non-doms was promised, the non-doms’ lawyers will no doubt ensure that their wealthy clients yet again worm their way out of paying their share of the UK’s tax burden.
At the poorer end of society, Osborne cut maintenance grants for poorer students, and, with huge repercussions, reduced the benefit cap he previously introduced from £26,000 to £23,000 in London and £20,000 elsewhere, all under the pretence — backed, I’m sad to say, by a dim and malicious electorate — that most of that money goes to the benefit claimant rather than his or her landlord. As the Guardian explained in an editorial on the eve of the budget, the benefit cap is “a disgraceful policy that’s about to get worse,” and a scheme “cooked up out of slogans, which arbitrarily punishes children for being born into big families.”
It did not start out with the hunt for a solution to any policy problem, but with the hunt for a slogan for Mr Osborne’s 2010 conference speech. “Nobody on benefits should be allowed to earn more than the average wage” sounds like a winning line. The difficulty is that the comparison is dishonest, as even Iain Duncan Smith was reported as objecting at the time. Median pay might have been £26,000 a year, but this was gross pre-tax earnings for an individual, as opposed to the disposable income of a whole family, which for working and workless alike has always also depended on child benefits and help with the rent. The result of this deliberate confusion is to arbitrarily punish children born into big families paying high rents. Experts calculated that, even in unfashionable parts of London, some youngsters would end up being raised on as little as 62p a day.
Tough choices are often required, but what marks this move out as nasty is the lack of any defensible principle. If the aim is, say, saving on housing benefit, that should be capped directly; likewise targeted cuts can always be made to any other benefit. Instead, in order to swell an inflammatory headline figure about maximal sponging, all the payments to a household are lumped together before this cap is applied. The effect is to sever the connection, which has existed since the workhouse, between the number of mouths to feed and the support provided. No wonder the supreme court ruled that the cap breached the UN convention on the rights of the child.
Overall, as the Guardian explained in another editorial yesterday, the cuts in George Osborne’s budget “are savage cuts, which will greatly impoverish many low-paid workers and disabled people, and most particularly poor children.” As for the supposed living wage, it is, in reality, nothing more than a moderate rise in the minimum wage — but only for those over 25. Those under 25 will continue to be treated as second-class beings.
In addition, as the Guardian explained, “this isn’t a living wage in the real sense of a pay rate carefully calculated in line with what workers need to live on. Mr. Osborne’s proposal is instead for a rebranded minimum wage, starting at £7.20 an hour next year, less than the real living wage of £9.65 in London and £7.85 elsewhere. Crucially, these numbers are calculated on the assumption that families can access the very tax credits that were being butchered while all attention was on Mr Osborne’s ‘living wage’. Before the budget, the Resolution Foundation had warned that deep cuts in tax credits would push the London living wage up to well above £11.”
The Guardian added that, for most low-paid workers, “cuts to benefits and tax credits will overwhelm the gain”, in some cases by thousands of pounds a year. The Guardian also explained, “For all the talk of rewarding hard work, the government is going to start snatching tax credits back at lower levels of earnings than presently, and will also snatch them away faster too, deepening the poverty trap.”
It was also noted, “Workers who fall sufficiently sick to satisfy an increasingly harsh bureaucracy that it simply isn’t feasible to class them as jobseekers are facing a benefit cut of around 30%, the sort of retrenchment more often associated with Greece. And where China once operated a one-child policy, Mr Osborne is now imposing a two-child rule on the poor. Tax credits will no longer be paid for third and fourth children, dismissing them as a luxury indulgence on the part of the parents, as opposed to young human beings with their own material needs and their own rights.”
I have other, more personal complaints — about George Osborne’s plan to charge market rents to those in social housing who have managed to nudge their heads above the UK median income, and are portrayed by the Tories and by lazy journalists — yet again — as “high earners,” but these can wait for a follow-up article.
For now, it will be sufficient, I hope, to sign off by encouraging my fellow citizens, who are awake and who understand what is going on, to oppose the Tories’ plans with every fibre of their being. Labour — with the exception of Jeremy Corbyn — seems to have no idea how to establish a coherent opposition to the Tories’ obsession with implementing endless austerity, a version of what the Troika of the European Commission, the European Central Bank and the International Monetary Fund has subjected Greece to, resulting in a strangled economy that can barely function, let alone pay off monstrous, unpayable debts. Here the mantra that the deficit must be reduced at all costs indicates an inflexible malaise at the heart of British politics, but also an ideological obsession on the part of the Tories with privatisation and low taxes for the rich that blinds them to the Greek-style reality that a mass of people strangled so violently that they have no money left over after working all week cannot support a fully functioning economy.
Note: For further analysis of the Bullingdon Club photo, see the following articles in the Daily Mail and the Guardian. Also see this Daily Mail article for a Bullingdon Club photo of an unbearably smug David Cameron in 1987, and an analysis of it here.
Andy Worthington is a freelance investigative journalist, activist, author, photographer, film-maker and singer-songwriter (the lead singer and main songwriter for the London-based band The Four Fathers, whose debut album, ‘Love and War,’ was released in July 2015). He is the co-founder of the Close Guantánamo campaign, the co-director of We Stand With Shaker, calling for the immediate release from Guantánamo of Shaker Aamer, the last British resident in the prison, and the author of The Guantánamo Files: The Stories of the 774 Detainees in America’s Illegal Prison (published by Pluto Press, distributed by the University of Chicago Press in the US, and available from Amazon, including a Kindle edition — click on the following for the US and the UK) and of two other books: Stonehenge: Celebration and Subversion and The Battle of the Beanfield. He is also the co-director (with Polly Nash) of the documentary film, “Outside the Law: Stories from Guantánamo” (available on DVD here — or here for the US).
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