So the Tories are able to tell us that Labour plans to cut the deficit (which they have never seen) will increase costs by precisely £3,028 per household, a figure now definitively rubbished by the Institute of Fiscal Studies and which the Tory party chairman has now admitted is mere “guesswork”. Yet they can’t tell us how their much-trumpeted £12bn welfare cuts will be funded or who the (big time) losers will be. Surprising, that. Either they’ve never worked out how to achieve a further colossal £12bn cutback in welfare benefits or, much more likely, they know that to reveal what it’s going to cost the victims would be exceptionally damaging just 5 weeks away from the election.
But the key point is that they’ve not backed away from the figure, and they clearly have every intention of carrying it through. So much for Cameron pretending the worst of the cuts was over. So much for Osborne saying living standards are now rising and will continue to rise each year. The truth is, living standards will be flat for the rest of this decade and the Tories are deliberately targeting the very poorest and most helpless in our society to pay for the bankers’ criminal recklessness.
The Tories have already indicated that they will extend the freeze on working-age welfare benefits for another 2 years. This will hit those in work more than those out of work because of the 13 million persons in the UK officially identified as being in poverty (i.e. with a household income less than 60% of the median wage), 6.5 million are employed compared with 6.3 million who are not. The Tories have also said they will reduce the cap on household claims from £26,000 a year to £23,000. That’s bad enough, but it only accounts for about a quarter of the £12bn Tory cuts. So where will the rest come from?
Leaks to the BBC show what else they have in mind. These include restricting child benefit to just the first two children, scrapping industrial injuries benefit by passing the costs to firms (and if companies don’t have an insurance policy, workers will be put into a default scheme and made to pay a levy to fund it), as well as imposing a regional benefits cap, taxing disability benefits, and reducing eligibility for the carer’s allowance. Some of these would remove essential bottom-line protections for people in great need. Even then it would still only achieve a cut collectively of around £5bn.
Why are cuts like this necessary at all? There are 180,000 potential taxpayers with very high incomes who claim non-domiciled status in order to pay no tax. Abolish this anachronistic hand-out to the very rich, and tax receipts could be boosted by £10-15bn a year. Revalue property from 1991 values, introduce more Council Tax bands at the top end, and there is an additional £10-12bn in the coffers. Why gratuitously hurt the poor?