It is has recently been quite widely reported that the government is struggling to meet its deficit reduction targets while keeping the pledges that won them the majority in May 2015. Osborne is currently trying to find the money to raise the amount of earnings at which people start to pay 40p tax for every £1 they earn to £50,000 from the current £43,000. It is an eye catching policy, one which I’m sure convinced voters to put their ‘x’ next to their local conservative candidate. It is also a policy that is needed. Since 2009 on, average wages have risen approximately 14% according to ONS but the cost living in cultural services such as going to the cinema has risen 21.2% and eating out has risen 22.7%. The bottom line to this is that the middle class is becoming increasingly poor and this could have a knock on effect for local restaurants and the economy as whole unless they gain a boost to the income they have left after tax and essentials.
However despite praising this policy, I woke up to the news that, after searching down the back of the sofa had failed to produce the necessary funds for the increased tax allowance, the government has resorted to making it harder to claim disability benefits. The move is expected to save £1.2 billion per year by 2020. Disability benefit has always had somewhat of a reputation that it attracts skivers and benefit cheats but I believe in this case the government is basing its policy on the loveable rouge Frank Gallagher from the hit British TV series Shameless. So where is the money saved coming from? Well this is the shocking part, it is being saved by making it harder for those who need help going to the toilet or getting dressed. Now if I was going to commit benefit fraud, I could probably muster up a good fake limp but I think shitting myself is a bit too far to go for an extra couple of quid a week. Being able to go to the toilet and get dressed are basic human rights.
So how did Justin Tomlinson, the minister for disabled people, justify these cuts? He said and I quote ‘Many people are eligible for a weekly award despite having minimal to no extra costs’. Of course they don’t have extra costs, care for this kind of disability is generally provided by family who unsurprisingly do it for free. There is no monetary transaction but that does not mean there isn’t a cost. People who are caring for loved ones could be out working, seeing friends, volunteering at the local museum. ‘Oh yes’ you say but couldn’t they also be out robbing a bank, vandalising public property or terrorising the local population? I’m sure that the person came up with this policy has some farfetched, elaborate justification like the one I have just given you but the reality is by cutting this funding, not only do we strip away a disabled persons dignity, we create the very thing that the conservatives use to justify not increasing taxes on wealthier individuals, disincentives to work and improve for both the carer and person with the disability.
If the government want to higher tax allowance then they should look into raising the top rate of tax. A government report found that when the top rate of tax was risen to 50% it was supposed to yield a return of £3 billion instead yielding £1 billion. The reason for this was that incomes were generally falling due to the recession, so less people were paying the top rate and people moved towards greater tax avoidance. Although my calculation is very much ‘back of a fag packet’, in the light of improved economic conditions an increase of around 2% in the top rate to 47% (which should also cause less tax avoidance than a full shift to 50%) could offer roughly the cash needed to cover the increased personal allowance.
The bottom line is that the government needs to realise that tax is not the only disincentive to work and their own policies, while decreasing the disincentives to work for the more wealthy of this country, are creating disincentives to work for the less well off and disabled there by increasing the benefit culture and dependence.