Labour will call a Commons vote on the ‘granny tax’ – my Sun article

The Sun has rightly been warning its readers how hard they will be hit by Chancellor George Osborne’s Budget.

His Budget did nothing to give Britain the jobs and growth we desperately need now and nothing to support families and pensioners on modest and middle incomes. Instead, it did the opposite.

And millions of Sun readers will start to find out this weekend just what this Government’s decisions will mean for their own family budgets.

According to the independent experts, the changes coming into effect this week will leave a family with children worse off by an average of £511 a year.

Worst of all, thousands of working parents will lose all their tax credits, leaving them up to £73 a week worse off — and in many cases they’ll now be better off quitting work and living on benefits.

That’s not just unfair, it makes no economic sense.

But there are two Budget decisions that aren’t too late to stop. The £3billion tax rises on pensioners — the so called granny tax — which George Osborne announced last month does not kick in until next year.

Nor does the £3billion handout which he announced for people earning over £150,000, when he cut the 50p top rate of income tax. That’s a tax cut of over £40,000 for 14,000 millionaires.

How out of touch are David Cameron and George Osborne if they think millions of pensioners who’ve worked hard all their life should have to pay more tax next year so that millionaires can pay less?

It’s no wonder the Chancellor has stopped using his catchphrase: We’re all in this together.

Ministers boast that the state pension is increasing — but it’s only keeping up with high inflation.

Next year, the granny tax will leave nearly 4.5million pensioners £83 worse off on average. And it will hit people just about to become pensioners harder still. In fact, people turning 65 after 6 April 2013 will lose £285 a year.

It’s not right and it’s not fair. That is why Labour will hold a vote in the House of Commons on Thursday 19 April to try to defeat the granny tax. And we’ll ask MPs from every party to join us.

That’s not all. We’ll also vote to stop the £3 billion tax cut for the richest.

We’ll call for a tax on bank bonuses to fund a guaranteed job for every young person out of work for more than 12 months — a job they would have to take up.

And we’ll demand that the Government thinks again on its daft plan to slap 20 per cent VAT on pasties, sausage rolls and even hot cross buns — and other things which have traditionally been VAT-free, including caravans and building work on churches.

After the global recession, of course there need to be tough decisions on tax, spending and pay to get the deficit down.

It’s why we introduced the 50p top rate of tax on the richest in the first place. And it’s why in government we set out difficult cuts to police, education and welfare budgets.

But by raising taxes and cutting spending too far and too fast, this Tory-led Government has choked off the economic recovery in Britain and put hundreds of thousands more people out of work.

America had the same deficit problem as Britain after the worldwide slump. But President Barack Obama stuck to the same plan that Labour was pursuing in government — supporting the economy until the recovery was secure.

The US is now starting to grow quickly and unemployment is falling — the opposite of what’s happening in Britain.

And because we’ve got no growth and so many more people are out of work — claiming the dole instead of paying taxes — George Osborne’s deficit reduction plan isn’t working either. In fact, the Government is set to borrow an extra £150billion to pay for this economic failure.

As long as the Chancellor keeps making mistakes with the economy there will be tougher times ahead and tougher decisions needed.

That’s why I have said — and many in my own party and in the trade unions didn’t like this — that Labour cannot oppose public sector pay restraint at a time when people are losing their jobs.

But in tough times it’s even more important to do things in a fair way — we should freeze wages for the top paid public sector workers to fund bigger pay rises for those on the lowest incomes.

Ministers haven’t listened, but that’s no surprise. As Tory MP David Davis wrote on this page last week, the Government seems more and more out of touch with people on modest and middle incomes with every passing day.

And they’re not just out of touch, they’re also increasingly incompetent. Just look at the panic they caused at the petrol pumps.

The Government’s economic policies are failing. From this week working families are paying the price. And next year pensioners will be hit hard as millions are asked to pay more, so that millionaires can pay less.

Tory and Lib Dem MPs who are still in touch with what life is like for their constituents should admit Cameron and Osborne have got it wrong this time.

They should vote with us to stop the granny tax before it’s too late.

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Posted April 8th, 2012 by Ed