Tories aim to hit the poor hardest

Louise Nousratpour
Tuesday October 6, 2009
The Morning Star

Shadow chancellor seeks to outdo Labour's attacks as he sets out public spending cuts.

The Tories and new Labour have fought a callous bidding war to prove who is best at making the poor and the sick pay for the bankers' crisis.

Today, Shadow chancellor George Osborne revealed his Thatcherite agenda in a conference speech focused on public spending cuts, including a one-year freeze on the majority of public-sector workers.

Under his plans, only the one million earning under £18,000 would get a rise.

The Tory proposal goes beyond Chancellor Alistair Darling's call for a salary freeze for the 750,000 highest-paid public servants.

Mr Osborne repeatedly claimed that the whole country was "in this together," but his belt-tightening policies were only aimed at the poor and the vulnerable.

He confirmed plans to raise the state retirement age for men from 65 to 66 in 2016, rather than 2026 as new Labour plans. For women, the pension age will be equalised by 2020.

Left economist Andrew Fisher pointed out that this would disproportionately hit the poorest, who have a life expectancy of 72 compared with 79 for the better off.

Mr Osborne also wants to introduce means-testing to the child tax credit at a lower level in order to claw back money from better-off families.

Another tax to hit the poor was next on the agenda, as he announced plans to raise VAT from the current 17.5 per cent to 20 per cent.

Mr Osborne then promised to raise inheritance tax thresholds to £1 million and declared his opposition to the government's 50p top rate of income tax from 2011.

The endless list of spending cuts will shave a mere £7 billion a year off the record £175bn public deficit caused by the bail-out of the banks. Another £13 billion a year will be saved once the retirement age is raised in 2016.

But the Tax Justice Network pointed out that Britain could save £100 billion a year just by preventing tax dodging in tax havens which are "politically connected to Britain."

The organisation's John Christensen also defended the 50p top rate tax, saying: "The likes of Mr Osborne argue that if we tax the rich, they will threaten to leave the country.

"Let them leave - it means they weren't interested in contributing to the wellbeing of our society in the first place."

Communist Party of Britain leader Rob Griffiths warned that "new Labour is paving the way for an even more right-wing Tory government unless the labour movement, at this late hour, forces the government to change course fundamentally."

UNISON leader Dave Prentis said Mr Osborne's "commitment to the free market underlines the real Tory agenda - it's one that hasn't changed since Thatcher."

Unite joint general secretary Derek Simpson added: "This was a speech written on the back of a Bullingdon Club membership card."