{"id":4748,"date":"2015-07-10T14:21:27","date_gmt":"2015-07-10T13:21:27","guid":{"rendered":"http:\/\/unitelive.org\/?p=4748"},"modified":"2015-07-10T14:21:27","modified_gmt":"2015-07-10T13:21:27","slug":"contradictory-tangle","status":"publish","type":"post","link":"https:\/\/unitelive.test.igniteamt.com\/?p=4748","title":{"rendered":"Contradictory tangle"},"content":{"rendered":"
<\/div>\n

George Osborne\u00e2\u20ac\u2122s emergency summer Budget was released with much fanfare on Wednesday (July 8), with the announcement of a compulsory \u00e2\u20ac\u015bLiving Wage\u00e2\u20ac\u0165 being hailed as the chancellor\u00e2\u20ac\u2122s \u00e2\u20ac\u015bmaster stroke\u00e2\u20ac\u0165.<\/p>\n

 <\/p>\n

But after the dust settled a day later, an analysis by the Institute of Fiscal Studies (IFS) has shown that the Tories\u00e2\u20ac\u2122 Budget pledges are a contradictory tangle of inconsistencies which will hit the working poor the hardest.<\/p>\n

 <\/p>\n

The introduction of a national living wage, in which employers must pay over-25s at least \u00c2\u01417.20 per hour starting in 2016 and rising to \u00c2\u01419 per hour, proves to be a slight of hand that obscures just how much millions of families will lose out on after the slashing of tax credits and the freezing of working-age benefits.<\/p>\n

 <\/p>\n

According to the IFS<\/a>, 3m households will be \u00c2\u01411,000 worse off every year as a result of cuts in tax credits, while 13m households will lose \u00c2\u0141260 a year after taking into account the freeze in benefits and local housing allowance over the next five years.<\/p>\n

 <\/p>\n

\u00e2\u20ac\u015bThe key fact is that the increase in the minimum wage simply cannot provide full compensation for the majority of losses that will be experienced by tax credit recipients,\u00e2\u20ac\u0165 IFS director Paul Johnson said.<\/p>\n

 <\/p>\n

The think tank highlighted that many individuals on the national minimum wage are in families with higher annual incomes \u00e2\u20ac\u201c one partner on the minimum wage is a second earner, while the primary earning partner will be working a higher paid job. In this case, the household may not be eligible for tax credits.<\/p>\n

 <\/p>\n

On the other hand, tax credits are targeted to support those on low overall family incomes, meaning that a higher National Minimum Wage will do nothing to help these families.<\/p>\n

 <\/p>\n

The Office for Budget Responsibility agreed with this in its own analysis<\/a>, estimating that a whopping half of the cash gains in household income made by Osborne\u00e2\u20ac\u2122s hike in the National Minimum Wage will go to the top half of the household income distribution.<\/p>\n

 <\/p>\n

Gift for the rich <\/em><\/strong><\/p>\n

\u00c2\u00a0<\/em><\/strong>\u00c2\u00a0What appears to be a leg-up for the poorest is, in reality, yet another gift for the rich.<\/p>\n

 <\/p>\n

And gifts for the rich in the latest Budget are plentiful \u00e2\u20ac\u201c a cut in the corporation tax; doing away with the bank levy, which taxed all revenue, in favour of a tax only affecting profits; and a cut in the inheritance tax that will allow those owning \u00c2\u01411m homes to pass them on to their children tax free.<\/p>\n

 <\/p>\n

As the Budget helping the already wealthy disguises itself as a win for the \u00e2\u20ac\u015baspirational\u00e2\u20ac\u0165 poor, it is actually this very group \u00e2\u20ac\u201c working households in poverty \u00e2\u20ac\u201c who stand to lose the most over the next five years.<\/p>\n

 <\/p>\n

An IFS distributional analysis<\/a> found that those hardest hit by the new budget measures planned for the next five years will be those in the 2nd<\/sup> poorest decile \u00e2\u20ac\u201c or those on incomes between \u00c2\u014111,000 and \u00c2\u014113,000 a year.<\/p>\n

 <\/p>\n

\"ifs<\/a><\/p>\n

 <\/p>\n

Tax expert Richard Murphy emphasised this fact<\/a> on his blog, highlighting how the Budget will fail to deliver for the hardest working and lowest paid.<\/p>\n

 <\/p>\n

\u00e2\u20ac\u015bGeorge Osborne imposed a 10 per cent net pay cut on some of the hardest up people in the country in this budget,\u00e2\u20ac\u0165 he said, adding that this amounts to seeing five weeks\u00e2\u20ac\u2122 worth of income disappear overnight.<\/p>\n

 <\/p>\n

\u00e2\u20ac\u015bCould you live with losing five weeks income when you were already at your financial limits? I doubt it,\u00e2\u20ac\u0165 Murphy noted.\u00c2\u00a0 \u00e2\u20ac\u015bSo why do we expect this whole group to do so?\u00e2\u20ac\u0165<\/p>\n

 <\/p>\n

Unite general secretary Len McCluskey condemned the latest budget, asserting that it was yet another swing at the nation\u00e2\u20ac\u2122s poorest, who have already suffered so much under the previous coalition government and a financial crash wrought by the ultra-rich.<\/p>\n

 <\/p>\n

\u00e2\u20ac\u015bCutting help with low incomes and high housing costs will punish millions of households who have already seen their incomes fall by \u00c2\u014140 per week since the financial crash,\u00e2\u20ac\u0165 he said.<\/p>\n

 <\/p>\n

\u00e2\u20ac\u015bThe slower pace to the pain of austerity will be no comfort to people just about surviving. The last Tory government left us a less equal, divided country. I fear once again we have a Tory party ready to take this nation backwards.\u00e2\u20ac\u0165<\/p>\n","protected":false},"excerpt":{"rendered":"

George Osborne\u00e2\u20ac\u2122s emergency summer Budget was released with much fanfare on Wednesday (July 8), with the announcement of a compulsory \u00e2\u20ac\u015bLiving Wage\u00e2\u20ac\u0165 being hailed as the chancellor\u00e2\u20ac\u2122s \u00e2\u20ac\u015bmaster stroke\u00e2\u20ac\u0165.   But after the dust settled a day later, an analysis by the Institute of Fiscal Studies (IFS) has shown that the Tories\u00e2\u20ac\u2122 Budget pledges are […]<\/p>\n","protected":false},"author":1,"featured_media":3539,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[17],"tags":[177],"wps_subtitle":"IFS shows how Budget hits poor hardest","_links":{"self":[{"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/posts\/4748"}],"collection":[{"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=4748"}],"version-history":[{"count":3,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/posts\/4748\/revisions"}],"predecessor-version":[{"id":4753,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/posts\/4748\/revisions\/4753"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/media\/3539"}],"wp:attachment":[{"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=4748"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=4748"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=4748"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}