George Osbourne’s new “annual tax statement” to households, purporting to show how our taxes are spent, is such a willful distortion of facts it leaves you gasping for air.
We get very precise figures on how much we pay out (for example, those earning £30,000 a year will see they spend £892 on education and £822 on state pensions) but these figures are based on income tax (which the government has cut) and do not include levies like VAT (which the government has increased).
They will also see that the biggest slice of the pie (£1,663) apparently goes to “welfare”. This, the most egregious of all the distortions, is clearly designed to be divisive and to further vilify the social security net and those who are in need of it.
The reality is that when the “welfare” budget is broken down, it can be seen that only 3% of it goes to the unemployed, while pensions account for 46%. As Suzanne Moore points out, “This is basically a giant mailshot to justify more cuts.”
Far from being “a revolution in transparency” as stated by Osbourne, this tax statement is another government exercise in opacity that is classic George Orwell.
Just two days earlier, Cameron – the man who increased VAT in 2011 from 17.5% to 20% – claimed he had a “moral duty” to lower taxes, boasting that his government had already cut income tax by £10.5 billion.
Cameron is instituting his “moral” tax cuts at a time when London has become home to 104 billionaires (“more per head than any other country”, drools the Daily Mail).
Taxes are part part of the social contract that provides us with public services – roads, police and fire protection, garbage collection, research and universities – as well as a safety net in case of illness, disability or (something we all face) ageing.
It is not “moral” to take less tax from those in the highest income brackets while increasing VAT. Although they pay less VAT in total, lower income households spend a larger share of their income on taxed goods, so “they are proportionately harder hit.”
There is hope that people are not being fooled by Tory doublespeak. A YouGov poll commissioned by the Centre for Labour and Social Studies (Class) shows that almost two thirds (65%) of the British public support a cap on executive salaries and the same percentage believe increasing the top rate of income tax on those earning over £150k per annum would reduce inequality. Even more (83% per cent) think closing tax loopholes would reduce inequality.