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Budget Is A Well Crafted Con Trick

Wednesday, July 8, 2015

Osborne Budget Is Well Crafted Con Trick Which Does Not Guarantee Workers Will Be Better Off

Working families hit by cuts in tax credits should join a union to fight for better pay from employers who can well afford it as Osborne confirms says GMB.

GMB commented on the Budget delivered today (8th July 2015) by Chancellor of the Exchequer George Osborne. See notes to editors for main points from Press Association.

Paul Kenny, GMB General Secretary, said “This is a beautifully crafted con trick by Osborne.

On the one hand he offers a vision of a living wage which is welcome. He confirms what GMB has being saying for some time – the vast majority of employers can afford pay rises and no amount of howling from CBI will alter that fact.  On the other hand he is taking away money from working families without any guarantee that they will be better off.

For the huge numbers of working families that will be hit by cuts in tax credits the answer is simple – they should join a union to fight for better pay from employers who can well afford it as Osborne confirms.

George Osborne is big in attacking working families and young workers but he has yet to take action on the billions of public money flowing out of the country into tax havens because of the abuse of housing benefits income by private landlords."

End

Contact: Kamaljeet Jandu 07956 237178 or Lisa Johnson 07900392 228 or Martin Smith 07974 251722 or Mick Rix 07971268 343 or GMB Press Office 07921 28988 or 07974 251 823

Notes to editors

Main points in the July 2015 budget – as reported by PA.

Chancellor of the Exchequer George Osborne rose to deliver the Budget at 12.33pm.

Mr Osborne said it will be "a Budget that puts security first ... a Budget for working people".

The Budget will take Britain "from a low wage, high tax, high welfare economy, to the higher wage, lower tax, lower welfare country we intend to create".

Mr Osborne said: "Britain still spends too much, borrows too much and our weak productivity shows we don't train enough or build enough or invest enough."

The Office for Budget Responsibility forecasts growth for 2015 at 2.4%, then 2.3% in 2016, then revised up to 2.4% in 2017, and for rest of decade.

Business investment is 31.9% higher than in 2010 and revised up again this year.

OBR forecasts almost 1 million new jobs over the next five years, but Mr Osborne says the Government's ambition is to "go further and create 2 million more jobs".

The deficit should be cut during this Parliament "at the same pace as we did in the last Parliament", said the Chancellor.

Mr Osborne said his plans will leave the national debt lower as a share of GDP in every future year than was predicted in March and will avoid a "rollercoaster ride" in public spending.

Banks including RBS to be returned to private sector faster than expected, with sale of Government assets delivering record privatisation proceeds this year.

Budget surplus to be achieved a year later than planned in 2019/20, but the national debt will be lower and the surplus larger than expected.

Deficit to fall to 3.7% of national income this year, then 2.2% in 2016/17, 1.2% in 2017/18 and 0.3% in 2018/19, before moving into surplus of 0.4% in 2019/20 and 0.5% in 2020/21.

Borrowing revised down to £69.5 billion this year, then revised up to £43.1 billion and £24.3 billion the following two years and to reach £6.4 billion in 2018/19.

Surplus forecast of £10 billion in 2019/20 and £11.6 billion in 2020/21.

National debt forecast to be 80.3% this year, then 79.1%, 77.2%, 74.7% and 71.5% in subsequent years before reaching 68.5% in 2020/21.

Chancellor publishes a new Fiscal Charter committing the country to running an overall budget surplus in normal economic times.

After 2019/20, deficit to be allowed only when the OBR judges real GDP growth is lower than 1% a year.

The fiscal plan requires £37 billion of further consolidation over five years, including £12 billion from welfare and £5 billion from tackling tax evasion to be announced today, and the rest from departmental cuts to be announced in the autumn.

Rises in public sector pay restricted to 1% per year for the next four years.

NHS to receive a further £8 billion by 2020, on top of £2 billion already committed.

HM Revenue and Customs to receive extra £750 million to go after tax fraud and evasion, with the aim of raising £7.2 billion in extra tax.

Non-dom status abolished for people born in the UK to parents domiciled here. Permanent non-dom tax status to be abolished with anyone resident in the UK for more than 15 years of the past 20 years to pay full UK tax from April 2017, raising £1.5 billion.

Bank levy rate to be gradually reduced over the next six years, while a new 8% surcharge on bank profits will be introduced from January 2016.

Cap on charges imposed by claims management companies, and an increase in insurance premium tax to 9.5%, effective from November 2015.

Funding from banking fines for services charities, with a quadrupling in annuities for Victoria Cross and George Cross holders. Government to fund memorial to victims of terrorism overseas.

Renovation of RAF group fighter command centre in West London, where the Battle of Britain was directed from, to be funded.

Plan for Productivity to be unveiled on Friday.

New bands for vehicle excise duty for brand new cars from 2017 - with most cars paying £140 standard charge. No change to VED for existing cars.

All cash raised from VED in England from the end of this decade to go into a new Roads Fund to pay for investment.

Fuel duty to remain frozen this year.

New apprenticeship levy on all large firms.

University maintenance grants to be replaced by loans for new students from 2016/17 academic year to be paid back once they earn more than £21,000. Maximum loan increased to £8,200.

University tuition fee cap to be linked to inflation for institutions offering high-quality teaching.

Agreement reached with 10 councils in Greater Manchester to devolve further powers to the city.

Government "working towards" deals with Sheffield, Liverpool and West Yorkshire regions on "far-reaching devolution of power in return for the creation of directly-elected mayors".

Regius professorships to be created in universities across the country to mark the Queen's 90th birthday.

Counties and elected mayors to gain power to set Sunday trading hours in their areas.

Mortgage interest relief on residential property to be restricted to the basic rate of income tax, phased in over four years from April 2017.

Tax relief for homeowners who rent out a room to be increased from £4,250 to £7,500 from next year.

New inheritance tax allowance of £175,000 on homes left to children or grandchildren from 2017, allowing £1 million to be passed on tax-free. Reforms will ensure that those who downsize do not lose any of the allowance.

Pensions tax annual allowance to be tapered away to a minimum of £10,000 from next year.

Green paper published on proposals for "a radical change" to pension saving system.

Annual Investment Allowance for small and medium-sized businesses to be set at £200,000 from this year.

Climate Change Levy exemption for renewable electricity to be removed.

Dividend tax credit to be replaced with a new tax-free allowance of £5,000 on dividend

Corporation tax to be cut from 20% to 19% in 2017 and 18% by 2020.

Disability benefits will not be taxed or means-tested, and funding for domestic abuse victims and women's refuges will be increased.

Abolition of automatic entitlement to housing benefit for 18 to 21 year olds, who will have a new Youth Obligation requiring them to earn or learn. Exemptions for vulnerable people.

Rate of Employment and Support Allowance paid to those deemed able to work to be aligned with Jobseekers' Allowance for new claimants.

Working-age benefits to be frozen for four years - including tax credits and local housing allowance, but excluding maternity pay and disability benefits.

Rents in the social housing sector to be reduced by 1% a year for the next four years.

Income threshold for tax credits to be reduced from £6,420 to £3,850, with similar reductions for Universal Credit work allowances, which will no longer be awarded to non-disabled claimants without children.

The rate at which a household's tax credit is reduced as it earns more is to be increased to 48%, and the income rise disregard reduced from £5,000 to £2,500.

Benefits cap to be reduced from £26,000 per household to £23,000 in London and £20,000 in the rest of the country. Social housing tenants earning more than £40,000 in London and £30,000 elsewhere to pay rent at market rates.

Support for children through tax credits and universal credits to be limited to two children, affecting children born after April 2017.

Changes to tax credits bring spending on the benefit back to 2007/08 level in real terms.

Welfare reforms announced by the Chancellor will save £12 billion by 2019/20 and will be legislated for over the coming year.

Tax-free personal allowance for income tax to be raised from £10,600 to £11,000 next year. Rates of income tax remain unchanged.

Higher rate income tax threshold to rise from £42,385 to £43,000 from next year, lifting 130,000 people out of the higher rate.

Real terms increase in the defence budget guaranteed every year, and a new joint security fund of £1.5 billion a year to be created by 2020.

Commitment for the UK to meet the Nato pledge of spending 2% of national income on defence every year of this decade.

Introduction of a new compulsory National Living Wage for working people aged 25 and over, starting in April 2016 at £7.20 an hour and reaching £9 an hour by 2020.

Low Pay Commission to recommend future rises in National Living Wage to reach 60% of median earnings by 2020.

OBR estimates National Living Wage will cost business 1% of corporate profits and result in 60,000 fewer jobs by 2020, but that by that time almost 1 million more will have been created.

National Insurance employment allowance for small firms to be increased by 50% to £3,000 from 2016.

Changes will mean a direct pay rise for 2.5 million with those on the minimum wage seeing pay increase by more than one third over the Parliament - or more than £5,000 for a full-time worker. A total of 6 million people expected to see their pay increase overall.

Mr Osborne completed his statement at 1.39pm.

 

 

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