Views
Rising taxes hit poorest - for the Strathspey & Badenoch Herald
LAST Sunday was the start of the new tax year. Any changes to the personal tax system made in the budget start from that date, and this year has been more controversial than most.
Gordon Brown has decided to double the lowest rate of tax from 10p to 20p, which means that anyone earning between about £5,000 and £18,000 a year will pay more income tax.
Not that Gordon Brown mentioned this when he was in Aviemore for the Scottish Labour Party's conference. By that time, a few back-bench Labour MPs had started to realise how damaging a tax rise for low-income families at a time when household bills are rising rapidly.
Of course, they have woken up to this too late. The first person to warn of this was the Leader of the Liberal Democrats, responding to the budget last year. If the Government and Labour MPs had taken heed then, poor families would not be paying more of their income to the Government from now on.
Why did they do it? The Government wanted a 'tax cut' headline, so they cut the basic rate of tax by 2p in the pound. But the money to pay for it had to come from somewhere.
What I find so astonishing is that rather than choosing to take the money from the super-wealthy or from polluting industries, the Government chose to take money from hard-pressed low-income households.
Now the Government will say that many of these households should be able to get the money back through the tax credit system. But that doesn't apply to everyone.
Surely if we want to make the tax system fairer, we should be taking every opportunity to reduce the burden on low-income families? Saying that what we have taken away with one hand, we'll give back with another is not good enough.
And, of course, average incomes in the Highlands are lower than the rest of the country, so a bigger proportion of people here will lose out than in the rest of the country.
No wonder Mr Brown ducked the issue when he visited the strath last week.
Pensioners out in the cold
HUGE HIKES in energy prices and big rises in the price of food are hitting household budgets all over the Highlands.
But one group is hit harder than most by these cash-draining changes: pensioners.
Far too many older people rely solely for their income on the paltry basic state pension, and many do not claim the means-tested pension credit top-up that is available.
The Government likes to tell us that it is working hard to make it easier for poorer pensioners to claim the additional money. But the figures given in the budget tell a very different story.
After all, if the Government was genuinely planning to get more cash to more pensioners, you would assume that the increased spending would be budgeted for in plans for future years.
If every pensioner who is entitled to pension credit were to claim it, the cost would be an additional £1.75 billion a year. But that extra cash was not included in Alastair Darling's budget last month.
In fact, Treasury spending figures anticipate no increase in the uptake of key benefits for pensioners in the next three years – including pension credit and the winter fuel payment – despite Ministers saying they want to make it easier for people to get what they are entitled to.
A report of a leaked government document suggested that the Government now believes that trying to get more people – including pensioners – to take up benefits to which they are entitled is 'poor value for money'.
The response when I pressed the Department for Work and Pensions on this last week in the House of Commons suggested that Alastair Darling's Treasury was pressing for pension spending to be kept down.
The truth is that the number of older people who still do not get the support they are entitled to is simply unacceptable.
Many of the people who are still unable or unwilling to claim benefits desperately need help to meet ever-rising living costs, especially for essential things like energy bills.
The Government agree that the system needs to be simpler, but they have failed to allocate funding for more pensioners to receive what they are due. Their position looks half-hearted at best and disingenuous at worst.
We need a simpler, fairer basic state pension that does not require more than half of pensioners to rely on means-tested top-ups to stay out of poverty. And we need to increase the pension in line with earnings, so that it goes up more rapidly and pensioners have some extra money to help meet the extra costs.
Where older people are concerned, government penny-pinching should take second place to ensuring that people have the dignified retirement that they have earned throughout their lives.
Posted on: 09/04/2008
