So, there you have it. A month later than usual, and after nearly 40 promises not to raise taxes, the Chancellor of the Exchequer and Prime Minster Keir Starmer, have hiked your taxes. But only if you work. Or are a pensioner.
This week’s budget hits the strivers, the works and the savers, and benefits those out of work. An example.
Two households next door to each other. One a couple with three children, next door to a house with a single mum, and with three kids. One of the working couple works 40 hours a week on minimum wage, the other cares for the kids. That household brings in, after tax, £21,807 a year. Before this week’s budget, the single mum received, in benefits, £20,978. Now, she gets £24, 491. And for each extra child she has she will get £292.81per month, plus £17.25 means tested child benefit. You can see where this example goes from here.
Meanwhile, those putting money aside for a rainy day in a cash ISA will be restricted. With the cap on cash ISAs slashed to £12,000 from £20,000, that means more tax on income for savers. Most people don’t put aside that amount of cash a year, so it will not affect many. Until you learn that building societies rely on these savings to fund mortgages. Around 40% of building society mortgages are funded from cash ISAs. The government wants to build 1.5 million new homes, but it is cutting your chance of being able to buy one by tightening the supply of money that helps you fund your new home.
And on it goes. It’s more difficult to save for a pension. And if you are a pensioner on the state pension, you now have to pay income tax, now that tax thresholds have been frozen.
Even the Resolution Foundation, a left wing think tank who’s former chief executive is now the Chancellor’s favoured advisor, thinks this budget will do more harm than good.
And why have most of us been targeted? Two reasons.
The first is the utterly appalling mishandling of the economy by this government. Taxing businesses £46 billion in the last budget has caused a slowdown. Slower economy, more taxes. The doom loop we all fear.
The second? The government’s left wing back benchers. With talk being not if, but when they chuck out the useless chancellor and prime minister, Reeves is trying to save her job. She will fail, but in the meantime, so will our country.
