The Tory government is considering lowering the top rate of tax for Britain’s super-rich, it has been reported.
The move would see the top rate of tax being lowered from 45p to 40p in the pound (£), while hammering low-income families with £12bn in welfare cuts.
Former Tory Chancellor, Lord Lawson, has urged George Osborne to reduce the tax burden on top-rate tax payers in the ’emergency budget’ next month (July).
George Osborne has indicated during Treasury meetings that he may go ahead with the plan. It would encourage more businesses to invest in the UK, says Lord Lawson.
More than half of North East families will be affected by planned tax credit cuts, making us one of the hardest hit region’s in the country, it has been claimed.
The Government is set to carry out £12bn worth of benefits cuts which it will detail at its next Budget. Tax credits is predicted to be one of the areas where the axe will fall heaviest.
It is reportedly being considered that they will be cut back to the 2003 level, which the Institute for Fiscal Studies has calculated would reduce entitlements for about 3.7m low-income families with children by an average of £1,400 a year, reducing spending by about £5bn.
Labour says that 148,000 North East families – or 56% of the total – benefit from tax credits.
House of Commons figures also show that 70% per cent of those claiming them in the region are in work.
Ian Lavery, Labour MP for Wansbeck said:
“David Cameron and George Osborne must come clean about their proposals to cut tax credits. Their plans clearly put over half of the families with children in the region in the firing line.
“Many families have suffered greatly under the first five years of the Tories, with their incomes falling and bills rising, making life a real struggle already.
“Time after time, during the election campaign and in the first month of this government, they have ducked and weaved to avoid revealing the true nature of their plans. It’s not fair and it’s causing great distress for many. It’s time for the Prime Minister to spell out just what he has in store for families across the region and let the public decide whether his cuts are fair.”
According to campaign groups and charities, the welfare cuts will see the already high level of child poverty in the North East spread even to some affluent areas.
About £15.7m is likely to be slashed from funding to help people in the North East lose weight and quit smoking, according to the Northern Echo.
The Government is poised to cut each local council’s public health budget by 7.8 per cent immediately, in the first round of George Osborne’s post-election cuts.
The move will swipe cash for services such as smoking cessation classes, obesity clinics, school nurses and drug and alcohol treatments.
And it will go ahead despite warnings of an obesity epidemic and evidence that tackling the stubborn causes of ill-health can cut the long-term cost to the health service.
The Chancellor announced a £200m “in-year” cut to public health budgets earlier this month, but did not set out where the pain would fall.
Now The Northern Echo has been told that three options will be set out, possibly as early as this week:
* A 7.8 per cent cut “across-the-board”.
* Steeper cuts for councils deemed to be historically overfunded.
* Taking the entire £200m from local authorities yet to spend the money and with reserves.
No reporter expects a warm welcome from politicians on the prowl for votes.
Especially not during this election, when the polls are so close that the phrase “squeaky bum time” doesn’t come close to describing the anxiety gnawing away at the heart of most candidates.
That said, the control exerted over the regional press during this time has been alarming.
The North East isn’t exactly the eye of the storm. It is home to some of Labour’s safest seats and that isn’t likely to change after tomorrow’s election.
The party machines calculate, perhaps understandably, it is only worth sending their high-profile folk to marginal constituencies, like Berwick Upon Tweed and Stockton South, where showing a well-known face could make a difference.
It is a state of affairs which has seen not one party leader venture into Tyne and Wear or County Durham since the dissolution of Parliament, bar Ed Miliband reportedly jumping off a train for a quick coffee in Newcastle Central Station.
But here’s an example of what it is like to cover the visit of a big hitter when they do grace us with their presence. On Tuesday, Baileys Cafe, in Alnwick, hosted one George Osborne for tea and cake as the senior Tory sought to drum up support for Berwick candidate Anne-Marie Trevelyan.
A press officer asked me what questions I want to ask. I said I didn’t know (a white lie, told after an experience with the Prime Minister’s PR, which I’ll come to later).
Mr Osborne arrived to the sound of cameras furiously clicking, ordered food and spent 20 minutes dining with a select group of local businessmen, all of whom appeared to be Conservative supporters. I don’t know this for certain, mind, but deduced as much from snippets of the conversation, which included “hopefully with Anne-Marie in Parliament” and lots of warm smiles.
Journalists were invited take pictures of Mr Osborne’s supposedly impromptu encountering of the public, after which he would take our questions.
The Chancellor disappeared for a huddle with his press team while myself and two other local journalists were told to wait at a table – a bit like being sat outside the headmaster’s office when you are caught chewing gum.
When Mr Osborne re-emerged, his press officer barked: “One question each.”
I was last in the go-round so pushed my luck by asking a second question, as did one other reporter, much to the annoyance of his press officer.
Note that these are questions without a follow-up, so in reality you are afforded nothing but the stock party line and little opportunity to get under the skin of what information you get. If I wanted to read a manifesto, I would have stayed in the office and used Google.
Disappointing, to say the least. The press officer said she understood, jotted down her email and told me to send her additional questions, a phone interview having been ruled out, for some reason. This email was not acknowledged until 11.35pm, almost 12 hours after the interview and well past our newspapers’ deadlines.
Another example, in April, David Cameron visited the Icon Plastics factory, in Eaglescliffe, to support Stockton South Tory James Wharton. I was asked to email six questions the night before, then on the day was put in a pool of six reporters and given just two questions. No follow-ups.
I was, again, told to email additional questions. Press officers assured me a week later they were “still trying” to get answers. I gave up.
All parties are guilty of this kind of behaviour, though it has to be said Labour’s Ed Balls and the Lib Dems’ Tim Farron found time to give us a phone interview when they visited.
This treatment of the press isn’t unfair on journalists. We’re used to no-one liking us all that much.
It is unfair on the people who read and watch our content; the same people, incidentally, whose vote decides whether or not these rather evasive politicians have this kind of power.
Source – Newcastle Evening Chronicle, 06 May 2015
Liberal Democrat leader Nick Clegg privately wanted to give councils powers to impose new taxes including road-pricing, workplace parking taxes and local beer and cigarette taxes, it has emerged.
In his role as Deputy Prime Minister he also said councils should be free to impose a tourism tax, such as taxes on visitors staying in hotels, and to scrap existing council tax discounts including the 20% discount for people who live alone.
The proposals were set out in a letter from Mr Clegg to Eric Pickles, the Conservative Local Government Secretary, in 2011 – but were rejected by Mr Pickles.
The latest revelation about the behind-the-scenes debates within the Coalition government comes as Tories and Lib Dems fight a series of pitched battles in marginal seats such as Berwick-upon-Tweed.
While Conservative leader David Cameron and Labour leader Ed Miliband are the only politicians with a chance of becoming Prime Minister after the general election, many of the seats the Conservatives have a realistic chance of gaining on May 7 are held by their Lib Dem Coalition partners.
Mr Clegg wanted councils to have “a much wider range of taxation and charging powers” which they would be free to use.
The aim would have been to ensure councils were “self-funding” rather than depending on funding from central government for most of their income, as they do now.
Specific proposals in the letter to Mr Pickles included giving councils “complete freedom over discounts rather than mandating them to offer specific discounts to single people, empty homes, second homes etc”.
The letter continued:
“There is a set of further tax powers that could warrant further consideration, including, but not limited to: fuel taxes; sales taxes; landfill taxes; workplace parking levies; utility taxes; ‘tourism taxes’; local airport levies; duties on alcohol, tobacco and other substances; and stamp duty”.
> He left out a Fresh Air tax. Pay-to-breathe…
And the Government should consider give councils charging powers covering “parking charges; speeding fines; waste collection; road pricing” and more, the letter said.
Mr Clegg told his Cabinet colleague:
“We should drive to ensure that local authorities have the greatest range of revenue raising powers at their disposal and are as unencumbered from central government restraints as possible.”
The letter was written as the Department for Communities and Local Government considered plans to allow councils to retain some of the business rates they collect.
But it has emerged now as the battle between the Conservatives and Liberal Democrats in marginal seats becomes increasingly bitter, with the two Coalition parties lifting the lid on internal Government discussions from the past five years in an attempt to embarrass each other.
Lib Dems are defending a majority of 2,690 in Berwick.
Both parties have accused the other of secretly backing plans to impose regional pay – which would mean public sector workers such as nurses or teachers were paid less in the north east than those in the south east.
And Danny Alexander, the Liberal Democrat Chief Secretary to the Treasury, has said that in 2012 the Conservative Work and Pensions Secretary, Iain Duncan Smith, distributed ideas for cutting the welfare bill which included limiting child benefit and child tax credit payments to two children – cutting up to £3,500 from a family with three children – and means testing child benefit, which would cut payments by £1,750 for a middle-income family with two children.
Mr Duncan Smith also wanted to remove child benefit from 16 to 19 year olds, a cut of over £1,000 for parents of a single child, according to the Lib Dems.
George Osborne, the Conservative Chancellor, retaliated by claiming the proposals were contained in a policy document “that was commissioned by the Chief Secretary himself”.
In a statement responding to the letter’s publication now, a Liberal Democrat spokesperson said:
“This Tory spin shows their true colours.
“They simply don’t trust local people and want to govern every aspect of people’s lives from Westminster.
“The proposals in this letter could give local authorities the power to LOWER these taxes in response to the wishes of local people.
“Liberal Democrats believe the best decisions are taken by those closest to the people those decisions effect.
Source – Newcastle Evening Chronicle, 30 Apr 2015
The UKIP manifesto published today contains policies which will appeal to many claimants, but also fully endorses George Osborne’s economic plans for the next parliament, which include £12 billion in cuts to benefits.
UKIP’s manifesto includes a number of pro-claimant policies, such as pledges to:
- scrap the bedroom tax
- end ‘unfair ATOS-style Work Capability Assessments and return assessments to GPs or appropriate specialist consultants’
- increase carer’s allowance from £62.10 a week £73.10 a week, in line with JSA
- continue to pay housing benefit to young people under the age of 25
However, the manifesto also supports ‘a lower cap on benefits’ and ‘limiting child benefit to two children for new claimants’.
Most alarmingly of all , the manifesto says very clearly that UKIP supports George Osborne’s fiscal plans:
“While this current Treasury plan is a reasonable target, there is little public faith it will be achieved, coming as is [sic] does in the wake of previous failure. UKIP MPs in the next parliament will make sure the Treasury sticks to this latest plan, with no backsliding.”
So, at this point, as far as sick and disabled claimants are concerned, a vote for UKIP looks like being a vote for £12 billion in Tory benefits cuts, likely to include taxing DLA and PIP , axeing contribution-based JSA and ESA, reducing the work-related activity component of ESA to 50p and cutting the numbers receiving carer’s allowance by 40%.
Source – Benefits & Work, 15 Apr 2015
George Osborne has refused to categorically rule out rolling child benefit into Universal Credit (UC) to help contribute towards Conservative plans to save £12 billion from the welfare budget.
The Chancellor was asked repeatedly to rule it out and did not, but said that if the Tories had wanted to include child benefit in the new welfare system, they would have done so when it was created.
The independent Institute for Fiscal Studies (IFS) has said that scrapping child benefit and increasing UC for eligible families could save £4.8 billion a year.
But such a measure would mean that 4.3 million families who receive child benefit at the moment but would not be entitled to UC in the future would lose more than £1,000 a year, the IFS said.
At a Westminster briefing, Mr Osborne was asked to rule out rolling child benefit into UC.
The Chancellor replied:
“If you judge us on our approach in this parliament and if we wanted to put child benefit into Universal Credit, we would have done it when we set up Universal Credit.
“We have got a track record, we have got a plan that’s based on clear principles about making work pay and sharpening work incentives…”
Asked again to rule it out, Mr Osborne replied:
“I’ve just given you an answer. If we wanted to do it we would have done it when we created Universal Credit.”
Asked again, Mr Osborne said:
“I’ve given a very clear answer and you have to be a contortionist to think I’m not giving a pretty clear answer to that.”
The Conservatives’ plans for the next parliament involve saving £30 billion to contribute to deficit reduction, with £12 billion set to be cut from the welfare budget.
But the party has faced criticism from the IFS and Labour for failing to set out how it would achieve the majority – around £10 billion – of those welfare cuts.
The Chancellor said:
“If you look at our track record, the £21 billion we’ve saved in this parliament, you can look at principles we will apply to future such savings.
“We want to go on creating a welfare system which rewards work and the aspirations of families and protect the most vulnerable.”
Universal Credit is the coalition Government’s flagship welfare reform and simplifies the system by rolling a string of benefits and tax credits into one payment.
It is being rolled out in stages after being hit by delays and IT problems but will eventually take in jobseeker’s allowance, income-related employment and support allowance, income support, child tax credit, working tax credit and housing benefit.
Shadow chief secretary to the Treasury Chris Leslie said Mr Osborne had put middle income families in the firing line.
The Labour frontbencher said:
“The Tories won’t admit where their £12 billion of welfare cuts will come from, but after this press conference it’s now clear middle income families are in the firing line.
“George Osborne repeatedly refused to rule out rolling child benefit into universal credit. This would mean 4.3 million families losing over £1,000 a year, according to the independent Institute for Fiscal Studies.”
Treasury Minister Priti Patel said rolling child benefit into UC was not Conservative policy.
She told BBC News:
“We’re very clear as well, we have made it clear and we’ve said that we need to find £12 billion of welfare savings but it’s not our policy, that suggestion, and that there are other ways in which we can find those savings.”
But Ms Patel would not be drawn on whether the Tories will pay child benefit only for the first two or three children.
Asked if it was a possibility, she said:
“I’m not going to come here and start talking the ins and outs of the spending review because that will all be for the next government.”
Liberal Democrat leader Nick Clegg said he was not surprised by Mr Osborne’s failure to rule out the move as he insisted the change would not feature in his own party’s manifesto.
Speaking in Newtown, Mid Wales, he said:
“It’s no surprise to me that the Conservatives are considering pretty dramatic changes like taking child benefit away from lots of families because they have committed to taking £12 billion away from some of the most vulnerable families in this country.
> And we’ve been helping them for the last five years…
“They have committed to taking the equivalent of £1,500 away from eight million of the poorest families in this country to balance the books; they are not asking the very wealthy, those with the broadest shoulders, to make a single contribution through the tax system in balancing the books.
“Even if they did what is now being floated by George Osborne, they would still have £8 billion or £9 billion to fund. Who are they going to affect next, those with disabilities?
“Which other vulnerable groups will be affected by this unfair plan from the Conservatives?”
Asked whether the Lib Dems would rule out the move, Mr Clegg said:
“Child benefit rolled into the Universal Credit will not be in our manifesto because we are not planning the very, very extensive reductions in support given to the most vulnerable in our society that the Conservatives are.”
> But if anyone’s interested we’ll sell our souls again. Cheaply.
Pressed on whether it would be a measure he would block in coalition as a red line issue, Mr Clegg said:
“There’s no way the Liberal Democrats would ever endorse, of course not, in government or in opposition an approach which takes £1,500 away from eight million of the most vulnerable families in Britain.”
Source – Northern Echo, o7 Apr 2015
The Institute for Fiscal Studies (IFS) is warning that cutting the benefits bill by £12 billion will lead to “radical changes” to housing benefits and “big cuts to disability benefits”, amongst others. They have challenged chancellor George Osborne to explain where the cuts will be made.
In an interview for the BBC today, Paul Johnston of the IFS pointed out that:
“The chancellor has been saying for nearly two years now that he wants to find £12 billion of welfare cuts by 2017.
“He’s told us maybe where he’ll find £2 billion of that £12 billion. If he really wants us to take seriously the idea that other spending will be protected, he needs to tell us something about where the additional £10 billion of welfare cuts will come from.
“They will not be easy to find.”
Johnston explained that a freeze on working age benefits, which would itself cause increasing hardship for working age claimants, would go nowhere near saving enough cash.
“He has told us he wants to freeze working age benefits. That will save up to about £2 billion. That’s something he has told us. It’s the other £10 billion we know nothing about.
“It’s of course possible to cut benefits by £10 billion or £12 billion, if that’s what you really want to do.
“But you need to recognise especially if you’re protecting pensioners which the conservatives have said they want to do, this will involve radical changes to, for example, the housing benefit system, big cuts to child benefit, big cuts to disability benefits.
“These are the big benefits. If you want to save £10 billion you have to find radical things to do to those big parts of the benefits system.”
For claimants, especially those who are sick and disabled, the result of the next election could well have a dramatic effect on the quality of their lives for decades to come.
Source – Benefits & Work, 20 Mar 2015
George Osborne has confirmed that there will be further massive cuts in the benefits budget, but refuses to say where they will fall, leaving working age claimants the likely target for the worst excesses.
In his budget speech yesterday Osborne confirmed there will be a further cut of £12bn in benefits spending, but gave no further details. Given that pensioners are largely protected, that leaves unemployed, sick and disabled claimants as the only realistic target for big savings.
This morning Osborne told the Today programme:
‘I’m proposing the same pace of cuts as over the last five years.”
“We’ve saved £21 billion in this Parliament and we need £12bn in the next. People can judge me by my track record”.
We know that there are plans to reduce the household benefit cap further and to stop housing benefit for some under 25 year olds. But these measures will be nowhere near enough to meet the proposed level of savings.
This is especially so when you consider that, with out-of-control rents, the housing benefit bill is set to continue to expand.
It certainly is possible to judge Osborne and his fellow ministers by their track record.
Over the last five years we have seen the introduction of the bedroom tax, the replacement of DLA with PIP, the time limiting of ESA, massive increases in sanctions and the destruction of the social fund, to name but a few.
None of these measures were in the Conservative party manifesto. And none of them, it seems, have come close to being harsh enough in Osborne’s view.
Where is there left now to make cuts in the benefits budgets? Where do you think the axe will fall?
Source – Benefits & Work, 19 Mar 2015
Spending on buses is going up in urban areas while it dips in rural parts of the North East, figures reveal.
Data released by the Campaign for Better Transport showed spending on subsidised bus services has risen by 14.3% since 2010 in Tyne and Wear.
Meanwhile, in County Durham and Northumberland councils are spending 29.8% and 15.3% less, respectively.
Martin Abrams, from CBT, said elderly and disabled people are those that suffer.
“Every single local authority is in a difficult financial position.
“This report isn’t about beating up local authorities – we want to highlight the fact that councils are really, really suffering from the funding cuts imposed on them by central government – but some councils are finding ways of funding services.
“We are concerned for elderly people in rural areas as this will have an impact on them, especially.
“A lot of elderly people take the bus to the shops and they meet their mates. If you take that away then people will be left in isolation and it will have an impact on the social fabric of the country.
“It is the big rural counties rather than urban areas that are making big cuts and it is very worrying.”
Councillor Nick Forbes, leader of Newcastle City Council and transport lead on the North East Combined Authority, said Nexus, which manages transport in the Tyne and Wear area, is dipping into reserves to avoid the funding cuts seen in other areas.
The combined authority has voted to operate a Quality Contract Scheme (CQS) which would see councils take control of fares and services.
“About 10% of local bus services in Tyne and Wear are paid for by local authorities through Nexus, and that includes all our school buses and special routes for early-morning shiftworkers, as well as many journeys in the evening and at weekends.
“Tyne and Wear has been able to avoid the severe cuts to local bus routes seen in many parts of the country thanks to good planning by local councils and Nexus up to now, but the fact is Nexus is spending the last of its financial reserves to keep these vital services on the road.
“This cannot go on much longer and that is why the North East Combined Authority is pushing ahead with a planned Quality Contracts Scheme, in which some of the large profits made by bus companies in the region are re-invested to protect and improve all local services.
“This will not only protect routes but mean lower fares for passengers, a universal smart ticket like Oyster in London and savings for the local taxpayer.
“Without a Quality Contracts Scheme local people should be under no illusion that local buses face cuts due to the enormous pressure on council spending.”
Simon Henig, leader of Durham County Council, said cutting the bus budget in County Durham had been unavoidable in the backdrop of severe cuts to local authorities.
He said following a consultation in 2011 funding for evening and weekend services had been scaled back to protect those operated during the day.
He added further cuts would make it harder to protect services.
Councils in other parts of the region, such as Darlington and Stockon, have cut funding for subsidised bus routes altogether.
“There has not been much of a reduction over the last few years, however, as with everything else, given the cuts that are being made by George Osborne that will become more and more difficult.”
Source – Newcastle Evening Chronicle, 13 Jan 2015