Look Left – Here’s what LFF readers think of the budget


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George-Osborne-Budget-2012• Our Left Foot Forward Budget 2012 survey, unlike the event itself, reveals a few surprises.

We asked readers to reply “Yes” or “No” to ten of the main measures unveiled by the chancellor, with an additional two questions, one looking at what he might have done, and one looking ahead to the 2015 election.

On the headline measure, the cutting of the top rate of tax, of the more than 800 respondents, 85.5% disagreed with the measure, with 72.2% saying progressive parties should pledge to reintroduce the 50p rate at the next election.

In terms of the measures intended to claw back some money from the rich, there was big support for the rise in stamp duty to 7 per cent for houses over £2m (92.7%) and the rise in the levy on non-doms to £50,000 (89.9%).

There was also big support for the chancellor’s raising of the tax threshold to £9,205 (87.2%), and for the pre-budget calls (ignored by the government) for a jobs guarantee for young people out of work for more than a year, at a cost of £500 million (81.1%).

Now, onto the more interesting results: 19.6% of our readers support the “granny tax” – which will affect five million pensioners and bring in £3 billion – while 29.3% support the cut in corporation tax to 24 per cent, and 22 per cent from 2014.

On the issue of the changes to child benefit, which will fall by 1 per cent for every £100 earned over £50,000, our readers were split: by the narrowest of margins, 50.2%:49.8%, opposing the measure.

Elsewhere, there was narrow support for the relaxation of Sunday trading laws during the Olympics, 52.2%:47.5%, support for the 5 per cent above inflation rise in the duty on tobacco (equivalent to 37p on a packet of cigarettes), 72.5%:27.5%, and opposition to the 3p rise in fuel duty in August, 62.5%:37.5%.

On 50p, stamp duty, non-doms, and the raising of the threshold then, as expected; not quite as expected, though, on the child benefit cut and the fuel duty rise.

 


This week’s most read:

Rangers: How journalists and administrators failed the fans Stephen Henderson

Budget 2012: Impact per decile – the poorer you are, the harder you’re hit Shamik Das

“Dismantle this reckless ideology – before it can cause irreparable harm” Caroline Lucas MP, Green Party

Budget 2012: Breaking down the benefits bill Richard Darlington, IPPR

“According to my tax breakdown, Daily Mail readers are the biggest scroungers” Cormac Hollingsworth


 

Thanks once again to everyone who participated in the survey, and for also answering the additional questions to find out more about who reads the site. This enables us to attract advertisers – the only reason why, along with the donations we receive, we can continue to run the blog.

We will conduct more surveys in the future.

• On the budget itself, we had plenty of reaction and analysis, of the political and economic impact of Wednesday.

Here is a list of our Budget 2012 articles this week, please click through to read:

Can Ed and Ed restore Labour’s credibility? – Ed Jacobs

The consequences of failing to hit the 0.7% aid target laid bare – Richard Serunjogi

It may do nothing for growth, but the fat cats will purr more loudly – George Irvin

Impact per decile – the poorer you are, the harder you’re hit – Shamik Das

Tippex still wet on the coalition agreement – Cormac Hollingsworth

Will the coalition u-turn on its ‘no new runways’ pledge? – John Stewart

Breaking down the benefits bill – Richard Darlington

Does Osborne think Caan, Ashcroft and Green are “morally repugnant”? – Kevin Meagher

Osborne hasn’t done enough to help unemployed in the north – Katie Schmuecker

“Clegg’s face said it all: Distant, pale and sullen” – Sco/Wal/NI reaction – Ed Jacobs

The IFS’s devastating picture that shows we’re not all in it together – Will Straw

Young people weren’t expecting much, and got even less – Sam Coates

Some welcome news for cities, but questions remain about jobs and growth – Rachel Smith

We will have more analysis of the budget next week on Left Foot Forward.

• The other major domestic political story this week was the passage through Parliament of the health and social care bill.

As Left Foot Forward reported this week, it didn’t clear the Lords and Commons without a final, last-ditch fight to save the NHS.

On Monday, Green Party leader Caroline Lucas wrote on Left Foot Forward of the need to “dismantle this reckless ideology – before it can cause irreparable harm”:

“We are entering a critical week for the future of the National Health Service as we know it, because despite the hollow government assurances of recent weeks, and cosmetic tinkering around the edges of the health and social care bill, the reality is that the core intention – to vastly increase the commercialisation of the NHS – remains intact.

“I wish this were scaremongering, but it isn’t. Under this administration, we can already see the ground opening up to more NHS hospitals being run by the private sector.

“Just last week, for example, George Eliot Hospital in Warwickshire confirmed it is open to a takeover and in talks with potential private partners including Serco, Care UK and Circle. This comes after the government tried to downplay the privatisation of Hinchingbrooke Health Care Trust in Cambridgeshire as a ‘one off’.

“Liberal Democrat peers may have succeeded in making the health and social care bill marginally less bad – but it is still deeply flawed and, when it comes to our health service, ‘slightly less bad’ is simply not good enough.”

Concluding:

“When I addressed a public protest against the plans outside Hove Town Hall on Saturday, I called on peers, particularly those in the Liberal Democrat camp, to exercise their power and reject it outright.

“As well as ridding ourselves of this bill, we must also now have a wider debate about the creeping commercialisation of the NHS that has taken hold over the last 20 years – helped along in no small part by the previous Labour government.

“The underlying conviction, that competition in healthcare markets automatically leads to cost efficiency, improved quality, and greater equity flow, is just ideology – not evidence-based policy. Even the Office of Fair Trading has conceded there is as yet no “clear evidence on the role of competition in driving performance in health care”.

“The only way to safeguard the founding principles of our health service is to dismantle this reckless ideology – before it can cause irreparable harm.”

While Jos Bell, also on the day before the last rites, wrote of the possibility of a “last-minute antidote to save the NHS”:

“For those politicians who have chosen to hang on like grim death to this shipwreck of a bill, seemingly designed to destroy the NHS and the lives of many people who need to rely upon it, we can only wonder at their mindset.

“In response, we also now know doctors are gearing up to challenge coalition MPs at the next election on an NHS ticket – we can only hope this will not turn out to be the only way that they will be able to safeguard their patients.

“Meanwhile, true to form when they feel under pressure, the government has thrown in a curveball to divert the news media into a cul de sac. Private health? Of course not. Private roads? Splendid notion!

“So what will the future hold? Free and fair or taking a toll? Of one thing we can be sure:  if you ‘heart’ the NHS, today is going to be a very bumpy blue light ambulance ride; let’s hope we can make it to A&E in time for emergency resus.”

And we’ll have more from Jos tomorrow in her look back at the events of Tuesday, the day many fear the National Health Service, the NHS as we know it, died.

Progressive of the week:

Leader of the Opposition Ed Miliband, on fire in his instant budget response, one of his best performances at the Despatch Box, venting the rage of the nation at the unfairness, the regressiveness, the sheer chutzpah of the Cabinet of the one per cent to so blatantly produce a budget of the few, looking after their own (who contribute, lest we forget, millions to the Tories in donations), and punishing the middle, the poor and the old.

Here are some of the highlights of Miliband’s speech:

“The chancellor spoke for an hour. But there was one phrase that did not pass his lips. One claim he has abandoned. “We’re all in this together.” And it’s no wonder.

“Because after today’s budget: Millions will be paying more so that millionaires can pay less.

“A year ago the chancellor said in his budget speech: “Now would not be the right time to remove [the 50p tax rate] when we are asking others in our society on much lower incomes to make sacrifices…” Well that is exactly what he has done today.

“Tax credits cut, Child Benefit taken away. And fuel duty up. And what has he chosen to make a priority today? For Britain’s millionaires, a massive income tax cut each and every year.

“The fairness test for this budget was whether the chancellor used every penny he could to help middle income families that are squeezed. He has failed that test.

“He’s the man who chose to spend millions of pounds on those who need it least. Wrong choices. Wrong priorities. Wrong values. Out of touch. Same old Tories.

“And let’s come to his claims on stamp duty. There are 300,000 people benefiting each and every year from his top rate tax cut. But there are just 4,000 houses sold each year for more than £2 million. So 99% of those who gain from his millionaires tax cut will be totally unaffected by his rise in stamp duty, and get a massive windfall from this chancellor.

“The chancellor didn’t tell us what this meant in pounds and pence, so let me read out the figures just so there is no doubt. There are 14,000 people earning over a million pounds in Britain.

“The chancellor’s decision today means that each of them will get a tax cut. Not of a thousand pounds. Not of five thousand pounds. Not of ten thousand pounds. No. A pay rise of over £40,000. Not just for this year. But every year. That is this chancellor’s priority – giving 14,000 millionaires over £40,000 each…

“It’s a millionaires budget that squeezes the middle. Wrong choices. Wrong priorities. Wrong values. Out of touch. Same old Tories.

“Under his tax cut, a banker earning five million pounds will get an extra £240,000 a year. Let’s call this what it really is: The government’s very own bankers’ bonus. Presumably he wants us to believe that the £240,000 tax cut is necessary to make them work harder.

“And it’s one rule for them, and another for everyone else.

“On the very day his millionaires’ tax cut kicks in, this chancellor will be telling a family working for 16 hours on the minimum wage that if they don’t work more hours they will lose nearly £4,000 in tax credits.

“It tells you everything you need to know about the values of this chancellor and this prime Minister. The poor will only work harder by making them poorer. And the rich will only work harder by making them richer.

“Wrong choices. Wrong priorities. Wrong values. Out of touch. Same old Tories.

“While everybody else is squeezed, what’s the chancellor’s priority? A massive tax cut for his Christmas card list. And what about the hapless accomplice to all this, the Deputy Prime Minister. Only the Liberal Democrats could be dumb enough to think that a George Osborne budget is a Robin Hood budget. Calamity Clegg strikes again…

“The prime minister and the chancellor have shown their true colours. They promised change. But they have failed on growth, on jobs, on borrowing, on fairness. Unfair. Out of touch. For the few, not the many. An unfair budget built on economic failure. An unfair budget from the same old Tories.”

Regressive of the week:

Easy one this week, one that doesn’t need much explanation: step forward Mr George Gideon Oliver Osborne, Chancellor of the Exchequer, whose budget this week rewarded the rich and punished the poor; as Miliband said in his budget response, “millions will be paying more so that millionaires can pay less”.

“We’re all in it together”, “balancing the books on those with the broadest shoulders”, “a Robin Hood budget”… as many have remarked this week, what planet are Osborne, Clegg and Cameron on? One in which it’s considered “fair” to give a tax break to the richest in society while making life ever more miserable for the poorest, with not even disabled children and cancer patients spared.

The IFS post-budget analysis (pdf) showed tax changes announced in the budget will benefit those further up the income distribution. Taking into account the totality of tax and benefit changes implemented by the coalition the richest 10 per cent have done better under this government than the poorest 40 per cent of households.

Even the Treasury’s own budget red book (pdf) showed that the poorer you are the harder you’ll be hit: the cumulative effect of this budget and previous announcements is regressive for the bottom eight deciles – with the ninth decile still paying less than the poorest 50 per cent.

As we said this week, if this is Mr Osborne’s definition of a “fair” distribution of pain, we’d hate to see what he’d come up with if he sat down and really put his mind to penning an “unfair” budget.

Evidence of the week:

The leaked internal A4e audit which revealed evidence of “systemic fraud” at the scandal-hit company. The document, obtained by Newsnight, shows A4e staff “claiming for putting people into jobs which did not exist, jobs which did not qualify for payment and fabricating paperwork.

Margaret Hodge, chair of the public accounts committee, described it as “devastating evidence of systemic fraud within A4e”, while Newsnight’s Paul Mason revealed the scale of the deceit:

“The report surveyed just the work of the top 20 recruiters so these are people highly successful in placing unemployed people in jobs and therefore earning money for A4e.

“The report said eight per cent of the claims surveyed were either potentially fraudulent or irregular, a further nine per cent were risky, 14 were uncheckable, often because the employer could not be contacted or indeed found, and as a result, only 70 per cent of all the claims could be verified.”

As regular readers will be aware, earlier this month, A4e tried to prevent Left Foot Forward from publishing an internal document (pdf) that appeared to indicate poor performance on behalf of the scandal-hit welfare-to work company.

It showed:

The job entry rate, i.e. the proportion of individuals A4e is responsible for at some level, manages to find a job for, is 8.4 per cent overall and 9.7 per cent if ‘specialists’ – those partners dealing with difficult cases – are excluded.

Meanwhile, the percentage of those who secure a job managing to hold on to that job for 26 weeks, appears to be denoted by the Outcome/Potential Outcome collumn, which has a total of 1.9%, including and excluding difficult cases. If this is the right reading of the table, then it represents a dramatic undershooting of the Department for Work and Pensions’ own targets.

As can be seen from this National Audit Office report (pdf) published in January 2012, the DWP expects 36 per cent of those referred to companies such as A4e to be secured a job for at least 26 weeks (page 4), and 28 per cent of those not on the Work programme to reach this milestone on their own (page 22).

As we noted yesterday, the latest revelations from the BBC show A4e not just failing, abjectly, to hit their targets, but fraud on a massive scale: fully 30 per cent of their claims are unverifiable.

Today, the University and College Union (UCU) said A4e should not be awarded new prison education contracts – nor, indeed any other government contracts.

This weekend on Left Foot Forward:

Saturday:

• Jos Bell looks back at the debates in the Commons and Lords as the health and social care bill, despite huge opposition, cleared Parliament.

• The Week Outside Westminster – sign up to receive it by email here.

Sunday:

• Harriet Williams talks to real life legal aid lawyers struggling to get by, a sharp contrast to the gross ‘they’re all fat cats’ myth pedalled by Ken Clarke.

• The Week Outside Westminster – sign up to receive it by email here.

 


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  • Ash

    Why ‘as expected’ on the tax threshold rise? Along with the IFS and IPPR, LFF has been instrumental in exposing the fact that this tax cut benefits mainly households in the top half of the income distribution, with the low and middle income households it supposedly targets getting a few crumbs from the table. And this was *before* we knew it was being funding through cuts in tax credits and benefits mainly affecting those same low-income households.

    http://www.leftfootforward.org/2010/03/lib-dem-tax-policy-fails-the-fairness-test/

    I suppose it depends what people understand by ‘do you support policy X?’. If that’s supposed to mean ‘is policy X better than nothing?’, maybe I support it. If it’s supposed to mean ‘bearing in mind how it’s funded and what the alternatives are, is policy X the right choice?’, I don’t.

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  • Mr. Sensible

    The clampdown on tax avoidence should be happening anyway; it should not just be happening to buy off the Lib Dems on the 50P tax rate.

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  • Anonymous

    And I’m expecting cosmetics anyway. They should be hiring thousands for this…it would be revenue positive.

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  • Anonymous

    Non Dom’s should not get away with it, either they pay tax here or they get out for god sake, if the money is made here they pay tax here, labour and the Tories have been in love with this bunch of rich pariahs. Look at Lord Paul he gave £200,000 then labour gave him a job and paid him £100,000 in three years he made £100,000 profit on his donation, then he had a go at his expenses.

    And the rest are no better

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