Give middle classes a break, Mr Hammond
When Theresa may told the nation austerity was almost over, we naturally assumed the hard-working families of middle Britain would be among the first to benefit.
But if the ominous rumblings from the Treasury are to be believed, the very opposite may be true.
Having borne much of the brunt of austerity for eight years, it seems the longsuffering middle classes are to be rewarded with even higher taxes and a fresh assault on their pensions.
From the ‘fiscal drag’ that pulled an extra 1.5million people into the higher-rate tax bracket, through the means-testing of child benefit, to the slashing of lifetime pension allowances, middle earners have seen their incomes and savings relentlessly eroded in the name of deficit reduction.
There was a time when a Tory government would have recognised their sacrifice – but not today. Speaking in the tropical idyll of Bali yesterday, Philip Hammond actually sounded as if he wanted to punish them.
He berated savers for paying into pension schemes, saying the tax relief they received was ‘eye-wateringly expensive’.
and he hinted that promised increases in the personal income tax allowance would be frozen, to pay for the shambles over the roll-out of universal Credit.
This is a particular blow in Scotland where Derek mackay has already saddled us with the uK’s highest tax rates.
With the Green Party tail wagging the SnP dog, he ‘progressively’ set the 40p rate in Scotland at £43,000, meaning the likes of senior policemen, medics and promoted teachers all pay more than their equivalents south of the Border. and this while running an underspend!
It is one thing for a left-wing amateur such as mr mackay to operate in this fashion, but is it any way for a Tory Chancellor to behave?
With our rapidly ageing population, the Government should encourage people to provide for their own retirement – thereby removing a huge burden from the state.
They already pay income tax when they take their pensions, so why on earth should they be forced to pay it twice?
Yes, more funds should be injected into universal Credit – a scheme founded on the sound Conservative principle that the welfare system should never discourage people from working. It’s in danger of failing because mr Hammond’s predecessor, George Osborne, tried to implement it on the cheap, and must be saved.
equally, mrs may’s £20billion boost for the nHS, which will have knock-on benefits for Scotland, has to be paid for. But fleecing middle earners is not the way – and certainly not the Tory way.
Taxes are already at their highest since the slump of the early 1980s. and history tells us – though it’s news to mr mackay – that high taxes are counter-productive, eventually bringing lower returns.
For example, the land and Buildings Transaction Tax – the Scottish replacement for Stamp Duty – has been subject to rejigs but delivered less than predicted to Holyrood’s coffers.
meanwhile, the reduction in the uK’s top rate of income tax from 50p to 45p in 2013-14 saw an £8billion rise in payments.
The truth is Britain is currently engaged in a war of ideologies.
On one side stands labour, with its marxist high taxes and ruinous borrowing to fund an orgy of public spending, and the tax-and-spend SnP, whose fiscal illiteracy has been a constant thorn in the side of hard-working Scottish families.
On the other are the Tories, who should be providing a radical alternative – extolling the virtues of a small state, low-tax economy, rewarding self-reliance and thrift. Right now, they’re making a spectacularly poor job of it.