Striving working families pay the price for Tory economic failure – my article for The Sun

It always takes a few days for the full details of Budgets to come out. And it often takes many months before people feel the full impact in their purses and wallets.

Sun readers will remember that in the Budget in March we had the tax rise on pensioners – the so called ‘granny tax’. We had hidden taxes on pasties, caravans, churches and charities too. The Chancellor George Osborne didn’t mention any of them his speech, but the truth eventually came out.

The same has happened over the last few days since this week’s mini-budget, when George Osborne had to announce that his economic plan had been completely derailed.

Far from securing the recovery, our economy is expected to shrink this year. And for all the Chancellor’s complacent bluster, the squeeze will continue. Prices are set to carry on rising faster than wages next year. Almost 1 million young people are now out of work. Business confidence is down and on Friday we learned that manufacturing output was down again too.

And when the economy isn’t doing well and more people are out of work for longer, the government gets in less money from tax revenues and has to pay more out in benefits.

That is the reason why David Cameron and George Osborne are now failing even on the one test they set themselves – to balance the books and get the debt down by 2015.

And who is paying the price for this economic failure? In his speech to the House of Commons on Wednesday George Osborne suggested it would be the work-shy and benefit scroungers.

But it’s now clear this is just not true. Six in ten households affected are actually in work, according to independent experts who looked at the figures. Millions of working people on modest and middle incomes, who are already struggling to get by, are being hit.

That’s because the government is pushing through three years of real terms cuts in everything from tax credits for working families to child benefit.

Even maternity pay for parents taking time off work to be with their newborn baby is being cut – a move that has now been branded the ‘mummy tax’.

A one-earner family on £20,000 with two children will lose £279 a year from all the government’s changes next April – on top of the cost of higher VAT – according to the independent House of Commons Library. No wonder some have already said this is effectively a tax on striving families.

And they are also cutting jobseekers allowance for people like nurses, soldiers and shop workers who have lost their jobs and are desperately trying to find new work.

All this is happening on the very same day that the Tories and Lib Dems are giving a £3 billion handout only to the richest people in the country. It’s a tax cut worth an average of £107,000 for 8,000 millionaires.

How unfair can you get? David Cameron and George Osborne can no longer say “we are all in this together” – or at least not without laughing or smirking – when it is working people, striving to do their best for their families, who are being singled out.

Of course after the global financial crisis, every country had to put in place a plan to get the economy back on track and the deficit down. That would have meant difficult decisions on spending cuts, tax rises and pay restraint under a Labour government too

Yet instead of trying to get the deficit down in a steady and balanced way – giving the economy some breathing space to grow – the government went recklessly fast and choked off the recovery.

It’s completely backfired because the government is now set to borrow £212 billion more than they planned to pay for the cost of economic failure. That’s billions more than the plan they inherited and condemned at the time. And the benefits bill is rising under this government because long-term unemployment is up.

This is not what people were promised. And it isn’t good enough.

We need to get the benefits bill down. But the way to do that is to get the economy growing again and get people back into work.

I am clear that those who can work should work – no ifs or buts. That means requiring people who are out of work to take a job – or face losing benefits – and making sure there are jobs for them to take. Because Labour is the party of work and working people – as our name suggests.

This is the One Nation approach Labour will take. Government will show its responsibility by supporting people back into work and people will have to show theirs by taking up the jobs on offer.

We would use a tax on bank bonuses to fund a job for every young person out of work for more than 12 months – a job they would have to take up.

We would use the unspent money in one of the government’s failed schemes to give every small business taking on extra workers a one year national insurance holiday.

We wouldn’t be giving the richest people in the country a £3 billion tax cut, when millions of families and pensioners are paying more. And we wouldn’t be wasting £3 billion on a reckless reorganisation of the NHS.

This government’s economic plan is not working. But instead of changing course they’ve decided to carry on with more of the same failing policies.

David Cameron and George Osborne may think it is funny and all a clever political game. But millions of struggling working families, striving to do the right thing, are paying the price for their failure. And they certainly aren’t laughing.

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Posted December 9th, 2012 by Ed