by Hazel Lewry
Income tax changes, increased National Insurance, alterations to benefits and VAT are just some of the areas where Westminster’s doing a very legal smash and grab on our individual bank accounts. Our subservience, which enables this legal theft, will see most families worse off. For some of us who may be hardest hit (particularly those of us with children) we could and likely will see our income cut by over £2,500 this year.
Financial analysts report that with the advent of the newly-implemented tax hike the average Scottish household will bleed another £750 to Westminster by the end of the financial year when the tax and benefits changes now coming into force are added to January’s VAT rise.
What did we do to deserve this raid on our meagre individual wealth? Quite simply, we’re in the Union. It really is that simple and it’s our choice. We are reported to be a nation in surplus, economists tell us Scotland has largely been self-sufficient for most of the last few decades and often in the three centuries before it.
England is haemorrhaging Scotland’s resources to support the failing City of London and years of disastrous economic policies, policies that we, the Scots, have also given tacit approval to. In doing so we engineered our own demise through lower life expectancy, alcoholism, poorer health and an attitude or outlook many refer to as the ‘Cringe’.
Today we wake up to the situation experts have warned us about. We’ve been cautioned the changes now taking place will drive thousands of Scots deeper into debt, rolling more from ‘just making it’ into poverty and literally showing thousands the door as their homes are repossessed.
On the brighter side, thanks to the Nationalists’ policies over the last four years, at least our own people will not have to make the choices some in England do – pay the mortgage or the prescription, for example? Likely it’s the medicines that get missed to make certain the mortgage gets paid in full, because most of us have pretty well cut out the fluff from our budgets already. Now we’re trimming lean meat.
Wednesday of this week saw a raft of Chancellor George Osborne’s Budget proposals implemented, measures that have come to be nicknamed ‘Worse Off Wednesday’ by those in the know. Perhaps in Scotland we term them the ‘Arbroath Abattoir’.
These broad alterations to the tax and benefits code are expected to hit middle earners with children and should mean more of us north of the Border finding ourselves in a higher tax band. 80,000 of us are now looking at the 40% bracket, when we weren’t yesterday.
And don’t just blame George Osborne, remember it was under Gordon Brown that the 10p tax band was abolished in another blatant theft from the poor in Scotland. No great remorse was shown by Mr Brown or his Labour cohorts.
So in one year we’ve seen the income limit for child tax credit drop by 20% from £50,000 to £40,000, National Insurance increase, child benefit frozen, fuel duty increase, VAT increase and a raft of other measures implemented to take more of our coin to support a broken Union.
The TUC is on record with a forecast showing that a couple with a joint income of £40,000, with two young children, and paying £400 a week in childcare, can expect to lose £2,600 by next April.
An average Scots household which made £30,000 after tax, mum and dad both working hard, perhaps more than one job each with one of the youngsters contributing a bit, will see today’s increases added to those of January, meaning £750 more each year is going to the UK Exchequer. Might as well cancel that trip to Tenerife for the family, that money’s now, quite literally, gone south. They just didn’t get to tag along.
Then we have an analysis by the Institute for Fiscal Studies (IFS) predicting the tax increases rising to £1,500 for the average UK household by the end of the Westminster parliamentary term in 2015.
Some families will obviously be hit harder than others, especially under child benefit changes. IFS analysts are predicting that from today a single income family with children will average seeing their real income fall by more than four per cent. Those lucky enough to still be having two earners in full employment but have no children will see a drop of around three per cent.
James Browne, a senior economist at the IFS, went on record with this statement: “If you take into account all the changes that we have had since January, virtually everybody will be worse off.
According to the UK government, some people will benefit, including those being taken out of income tax as the personal allowance goes up by £1,000 to £7,475 for those under 65 and from £9,640 to £10,090 for those aged 75 and over. Of course, it’s rather unlikely they’re talking about the cumulative total of the changes, just those implemented today.
The director of tax at the Institute of Chartered Accountants Scotland, Derek Allen stated: “This is really going to bite. The reality is that we are all going to be paying more tax.”
The irony in Scotland is that April 6th was Arbroath Day, the 691st year since signing the Declaration of Arbroath to guarantee our nation its independence and assure us we, so long as 100 of us remain alive, would never be subject to English Laws or Dominion. Now we are seeing National Insurance contributions rise by 1 per cent to 12 per cent, while changes to tax credits will mean some families losing out by more than £500. The earnings threshold for the higher rate of income tax being cut from £43,875 to £42,475, dragging an extra 80,000 of us Scots into it. We have the ‘privilege’ of watching child benefit being frozen at £20.30 a week for the eldest or only child and £13.40 for any other children. We’re being ‘blessed’ by our income limit for child tax credit falling from £50,000 to £40,000, while the element of tax credit for babies under one (£545) is being stopped. Our fuel costs are amongst the highest in the world.
Housing charities have warned that this raft of UK Government measures will make it harder for some Scots to stay in their homes. We get what the Union tells us we’re getting and are expected to be grateful.