Tax Cuts for millions not for millionaires

Today, Charlie Elphicke (MP for Dover) and I have published a joint article urging the Chancellor to cut taxes for lower earners. You see the full piece HERE, or below.

Tax cuts for the many, not the few. Let's increase the personal allowance to £10,000
By Robert Halfon & Charlie Elphicke

Tax cutting has to be as much about morality as about economics.  Both are just as important, and neither are mutually exclusive. For Modern Conservatives, the task is clear: Any tax cut must be affordable, help the economy to grow and be justifiable on ethical grounds.

For any tax cut to be credible in times of austerity, it is necessary to show that it can be funded. It must also benefit the many, not the few.  This is why Labour's plans are the economics of the madhouse. Labour's VAT cut would focus help on the better off, paid for by more Government borrowing. Only Ed Balls and Labour could dream up tax cuts for the few paid for by higher interest rates for the many.

For Modern Conservatives, tax cutting is in essence a moral creed – allowing people to keep more of their own money so they will have the choice on how, if and when to spend it. Starting with tax cuts for the poorest for who lower taxes would make the greatest difference. Unlike Ed Balls and Labour, Conservative tax cutting must be for the millions rather than millionaires.

So how do we square the circle? How do we help those most in need and boost the economy? Across the board income tax cuts meet the criteria of helping millions but are incredibly expensive.  A basic rate income tax cut of just one pence would cost £3.85bn in 2012-13, so the 3p cut suggested by Ed Balls and Labour would cost a cool £12bn. Not only is it expensive, it is unprogressive, as the rich would benefit most. (No wonder the country went bust!)

For our part, we see lower taxes for the lower paid is a greater priority than the abolition of the 50p rate.

So how can lower taxes for lower earners be delivered?  We believe that increasing the income tax personal allowance is the right way forward. It doesn't just focus help on the most needy in our society it is also popular with some 67% supporting an increase (against just 22% who support getting rid of the 50% income tax trap left by Gordon Brown). It provides a more immediate economic stimulus as the least well off are more likely to spend any extra money that is to hand. The Chancellor was therefore right to increase the personal allowance to £7,475 for the current year and plan an increase to £8,105 for the next tax year.

The media would have you believe that this is a Lib Dem policy. For sure it was included in the Lib Dem manifesto. Yet it is in truth a very Conservative policy that many of us were pushing a decade ago when the Lib Dems were still arguing for another penny on income tax. So while the media would have you believe that this is something that Nick Clegg is fostering, we do not see that Modern Conservatives should cede any ground as being the true parents of this policy. This is a tax cut that doesn't just help the lower paid, it incentivises the jobless from moving out of Labour's toxic legacy of benefits dependency. Little wonder then that Labour are making the case for tax cuts for millionaires over tax cuts for the millions they would prefer to see dependent on the state.

How do the numbers stack when it comes to taking poor people out of income tax? HMRC figures indicate that every £100 the personal allowance is increased costs the Exchequer £490m. So on the face of it, a £1,000 increase would cost £4.9 bn. However, in Budget 2011 (see p42, line 22), the higher rate threshold was adjusted so that only basic rate taxpayers would see the benefit of the higher personal allowance. In other words the change was made to focus the tax cut on the least well off. Hence the cost of a £630 increase in the personal allowance was £1.05bn. An increase in the personal allowance by £1,000 on this basis would cost the Exchequer £1.7bn.

Now, bear in mind that the personal allowance will rise to £8,105 from April. If we want to see the first £10,000 of earnings taken out of income tax altogether from then, the cost to the Exchequer would be £3.2bn.


Interestingly, this is the headroom the IFS is reported as saying the Chancellor has for the Budget. If there is the headroom available, as Modern Conservatives, we believe the Chancellor should indeed take the plunge and increase the income tax personal allowance to £10,000 with effect from this April.

Chancellor’s Autumn Statement: A budget for children, families and pensioners

The Chancellor's Autumn Statement supports families in Harlow, as it included a package of support including a freeze in fuel duty, a freeze in council tax and the extension of free childcare for two-year-olds.

This is a mini-Budget for children, motorists, businesses, and pensioners. It deals with Britain's debts, and will help to shield hard-working families in Harlow from the economic crisis that we face in Europe.

Many regular readers will know that I have campaigned for months, for a freeze in petrol duty. I welcome the fact that the Government has genuinely listened, and have now scrapped the 4p increase in fuel duty which had been planned for January 2012.

Harlow pensioners will also benefit, as they will see pensions increase by more than £5 a week next year: the highest cash rise in British history.

Details on how the Autumn Statement will help Harlow residents with the cost of living:

- Council tax freeze. The Conservative-led Government has extended its council tax freeze for a second year, saving residents up to £70 for the year on an average Band D Bill

- Keeping interest rates low. Interest rates will be kept low to help with the cost of a mortgage.

- Helping with the cost of commuting. The Government is putting in £105 million to limit the rise in rail fares.

- Cutting Fuel Duty. The Conservative-led Government has cancelled Labour’s fuel escalator and cut duty. This means that from April petrol duty will be a full 10 pence lower than it would been under Labour.

- Benefits will be increased with Inflation. Pensions and out-of-work benefits will be uprated in line with inflation in 2012: protecting the most vulnerable.

Thank You letter from Fair Fuel UK

I was really pleased to get a recent letter from Fair Fuel UK, to thank me for my support for lower fuel costs. Fair Fuel UK is a great campaigning organisation and a real example of the very best in campaigning.  I have lobbied hard for the Government to look at fuel duty and welcomed the Budget announcement to introduce a fuel stabiliser and not implement Gordon Brown's planned fuel tax rises.

You can read more about the Budget HERE.

by Robert Halfon - www.roberthalfon.blogspot.com

A Budget for lower earners and Harlow families, for jobs and for motorists

With the current state of the economy, it was always going to be a difficult Budget.

We are currently paying £120 million a day in debt interest alone - that is £180,000 for Harlow residents, every single day.

But, despite the economic problems, the Budget has some good news for local residents in three ways:

1. A Budget for lower taxes for lower earners, and help for families. Harlow families will keep about £8 million extra in their pockets, after the Government raised the income tax threshold.

This will save most Harlow workers £200 a year. And there are further tax cuts on the way next year, saving Harlow people a total of £300 a year from 2012.

Getting on the housing ladder is becoming increasingly difficult, especially for young families in Harlow. That is why the Government has announced £250 million to help first-time buyers to purchase a new shared equity house or flat. This will help 10,000 families, and also boost our construction industry, and apprenticeships, supporting thousands of new jobs.

2. A Budget for motorists. The last Labour Government planned huge fuel tax rises on petrol. For months I have campaigned for fairer fuel prices - and met the PM directly on this - to help ease the burden for the 35,000 motorists in our town.

The Government has listened, scrapping Labour’s planned rise in fuel duty - and actually cutting the tax instead by 1p. We are also cancelling Labour's "fuel escalator" completely.

This will save Harlow motorists at least £750,000 this year at the pump, and brings to an end the frequent rises we saw under the last Labour Government.

3. A Budget for jobs. Thankfully, in recent months unemployment in Harlow has fallen. But since Gordon Brown's recession our town has suffered from deep unemployment and rising costs. This has put a burden on hard working people who just want to have a decent living.

To combat this, we are investing £300 million to create 100,000 work experience places for young people, in real private sector jobs.

On top of this we will create an an extra 250,000 apprenticeships over four years, and new “Enterprise Zones” with tax breaks and easier planning rules. I myself have taken on a Harlow apprentice in Parliament, and am encouraging other MPs to do the same.
With more than 2,500 businesses registered in our town, Harlow is one of the most entrepreneurial towns in England, and I have asked the Government to consider us to be one of the new “Enterprise Zones”. Our firms will benefit from an extra 2p reduction in business taxes, creating thousands of new jobs.

As well as being a Budget for families, lower earners, jobs and motorists, I am glad that the Government has protected NHS spending, and will spend money on poorer pupils through the pupil premium.

The pupil premium guarantees at least £430 extra will be spent on each Harlow pupil on free school meals - about 2,000 young people in our town, whose education will benefit from an extra £831,000 in every single year.

Finally, the freeze in Council Tax will save £72 a year for an average Harlow family. It has been an extremely tough year, but our economy is at last moving in the right direction.

by Robert Halfon - www.roberthalfon.blogspot.com

BBC 1 Debate: The Spending Review

Last night, I took part in the BBC 1 Debate on the Comprehensive Spending Review.

I made the point that the new Government must be tough but fair. Reform and change today is necessary if we want social justice tomorrow.

Sadly, the cuts we now face are Labour’s legacy. Labour doubled the national debt and left us with the biggest deficit in the G20. We have to clean up Labour’s mess to get the economy moving, and to keep mortgage rates low.

At the same time, we must invest in skills and apprenticeships for young people, improve Harlow housing and roads, and protect the NHS.

This is the balance we have to strike.

by Robert Halfon - www.roberthalfon.blogspot.com

The Robin Hood Government

Is this Government the most Robin Hood like in recent times?

Labour are quick to mount the class war cry at the Coalition Government. Yet, even with public debt at £900 billion, the new Coalition have made every effort to ensure that more money has been distributed from the rich to the poor than in many a year:

- The Income tax threshold was raised by £1000, removing hundreds of
thousands of people from income tax altogether.

- A new 'pupil premium' will boost education for one million
disadvantaged school children.

- A new 'Robin Hood' levy on banks will be introduced from January
2011.

- NHS spending will be ring-fenced.

- The basic State Pension will rise by earnings, prices, or 2.5 per
cent, whichever is greater.

- Child Tax Credit will increase generously next year.

- An extra £60 million will help fund an additional room for carers,
over the next few years.

- There will be a two-year public sector pay freeze, EXCEPT for the 1.7 million on lower incomes.

- Council Tax will be frozen next year.

- Housing Benefit was capped at £250 per week for a one bedroom
property, £290 for two, £340 for three and £400 for a four bedroom property.
So hard-working families will no longer have to subsidise people to
live in mansions that they themselves could not afford.

- A Capital gain tax on the assets of the rich so that we no longer have a situation that they pay less tax than their cleaners.

Far more Sherwood Forest than Notting Hill don't you think?


Sent from my BlackBerry® wireless device

Preparing for the Budget

As we all await the Budget on Tuesday, most are bracing themselves for some very tough spending rounds.

I thought it might be useful setting out a few home truths, as the Opposition get ready to battle over 'cuts':

• In 2010, the Government will spend £701 billion, £155 billion more than it can raise by taxes;
• Public Sector debt is £900 billion;
• Public Spending as a proportion to GDP is at 48%;
• The UK has the highest deficit in Europe other than Greece.
  
  
  

It is worth stating that any cuts, are in fact Labour cuts, caused by their mis-management of the economy. We often forget that it is not 'Government' money that is being spent, but 'taxpayers'. All taxpayers have the right to know that the Government spends their money wisely - and does not spend more than it can afford. Taxpayer's money is not a bottomless pit: every spending decision means that somewhere else, taxpayer money is not being spent. The last Government - over thirteen long years - spent our money, as if it was an ever increasing pot, and often did not spend it well. Tuesday, will mark a return to good housekeeping and common sense with the nation's finances.

P.S. There is a good article in the Sunday Times well worth reading. Click HERE.

by Robert Halfon - www.roberthalfon.blogspot.com

After the Budget dust settles, we learn that Labour's cuts will be more savage than the Thatcher years (in their own words)

After months and months of attacking the Conservatives for planning huge cuts - and promoting fear amongst the electorate -Chancellor Alistair Darling, said today on the BBC, that a Labour Government would make more savage cuts that occurred under Prime Minister Thatcher during the 1980s.

As always, this was a Budget full of smoke and mirrors. Hidden tax hikes, hidden cuts and re-announced measures. It was a Budget, which attempted to get the Government out of a deep hole of its own making and it failed.

Unfortunately, it will hit hard working families in Harlow hard:

• 3p more tax on each litre of petrol;
• 15p more tax on each pack of cigarettes;
• 2p more on each pint of beer, and 10p more on each bottle of wine;
• Higher National Insurance for Harlow's 40,000 workers - an extra tax on jobs, for anyone who earns over £20,000;
• A stealth hike in Income Tax, because the tax bands were frozen instead of rising in line with inflation. At the 20 per cent basic rate, this means that a Harlow taxpayer will lose an extra £48 in income tax this year, while a two-earner couple will be clobbered for an extra £96;

If this were not bad enough, The Budget red book shows that the national debt will soon be £1.4 TRILLION, or £23,114 per head. We will paying back Gordon Brown's debts for generations to come.

by Robert Halfon - www.roberthalfon.blogspot.com

More debt, more taxes: Everybody suffers under Labour

Today's Pre-Budget Report marked the end of the Labour Party's claim to be the party of aspiration. Every child born will be saddled with a debt of £23,000. Every employee earning over £20,000 will face an increase of 1 pence on their National Insurance Tax. Every home owner will continue to have to pay huge stamp duty - an added burden of HIPs if they sell their house. Every motorist will face ever rising petrol taxes.

The result is that every family across the country will face an increase in taxes of around £370 a year.

A bankrupt Government, bereft of ideas, is on the verge of bankrupting the country. It is time for change.


Sent from my BlackBerry® wireless device

Gordon Brown's sleight of hand

One of many reasons why this Government is so unpopular is Gordon Brown's sleight of hand. You know what I mean - the nifty little tricks that imply that the Government is helping someone or something -when in reality they are doing the precise opposite.

I was reminded of this with the recent Budget. For months now, I have been working with Harlow Bingo Club in a campaign to remove VAT from Bingo participation fees. The Bingo Club is a community Institution, has 42,000 members in Harlow, and is used by young and old alike. This VAT tax was crucifying the Bingo industry, leading to the closures of clubs up and down the country.

So, it was good news that, after much lobbying, including a local petition, Chancellor Alistair Darling, announced in the Budget, a removal of the VAT for Bingo - or so we thought. In a classic case of Gordon Brown trickery, the Treasury have instead increased Bingo duty, from 15% to 22%. The net effect of this means that Bingo will have to pay millions of pounds more to the Taxman, than they were doing under the old unfair VAT system. This is because Bingo duty affects revenue from all games of duty, whereas the reduction in VAT benefits less than one-third of revenue from Bingo. What is even worse, is that this change has been imposed without prior indication of consultation and was brought in under the cover of removing the discredited VAT tax.

The impact of this new tax rate could have dire consequences for clubs like Harlow and will impact on the thousands and thousands who enjoy the game, not forgetting the many who are employed by Bingo Clubs.

I have said it before and I say it again here, I am not a gambler, have no love for Casinos and the like, but fundamentally believe that Bingo Clubs like the one in Harlow, are wonderful places, in the heart of the community. Loved by staff and customers alike, they provide an important social amenity, which should not be discounted. What Gordon Brown has done, is more than a sly-trick - its unforgivable.

By Rob Halfon ~ Working hard for Harlow, Hastingwood, Nazeing, Roydon & Sheering. http//roberthalfon.blogspot.com

Labour Complacency over the nightmare Budget

I have written to the local papers today about the Budget, and I thought you might like to see what I have said. My main point is that the Labour MP and the Government seem incredibly complacent as to how just bad things are. They need to get out of their Ministerial cars and see what is really happening on the ground. My letter is below:

Dear Sir

I realise that Bill Rammell is Foreign Minister and has to frequently travel around the globe, but after his recent comments regarding the Budget, no wonder people ask what planet are he and his Labour Government living on?

On Saturday, I met a couple in Bush Fair, one of whom had just been made redundant. He was now added to the over 2.1 million unemployed, and was finding it tough even to get a part-time job. The empty shops in Broadwalk and elsewhere, not forgetting the huge house repossession rates in Harlow, just show the damage that the Government’s economic policies have done.

Last week’s Budget, far from alleviating the problem, makes a bad situation even worse. Every child born in Harlow and the surrounding villages will come into this world with a debt of £22,500. If this were not bad enough, not only has Gordon Brown increased taxes – yet again – on fuel, alchohol and tobacco, but every person earning just over £ 20,000 will have to pay increased National Insurance Tax, Yet the NHS is facing a £2.3 billion cut. The tax increases will amount to £1,000 on every Harlow family over the next two years.

This should have been a Budget that got to grips with national debt – now at the worst level since the Second World War. It should have offered tax cuts for small firms to take on new employees, and a proper national loan guarantee scheme to get credit flowing again. Above all, it should have set the path to more efficient lower tax economy – whilst protecting vital services. It is a great shame that Labour’s budget was such a missed opportunity to put things right.

Yours sincerely

Robert Halfon - Prospective MP for Harlow Constituency

By Rob Halfon ~ Working hard for Harlow, Hastingwood, Nazeing, Roydon & Sheering. http//roberthalfon.blogspot.com

Budget Nightmare continued

I said I would provide you more details about the Government Budget nightmare. Well, the Conservative Treasury Team have put out the below statement, and it makes grim reading.

"Yesterday, we had a dishonest Budget. The Chancellor described the worst recession, the fastest rising unemployment, and the worst public finances that this country has had since the Second World War. But he could not describe a credible solution. In fact, he based all his forecasts on optimistic growth forecasts that the IMF discredited just over an hour later.

Even on his figures, thanks to Labour's economic incompetence, our national debt is going to double again to £1.4 trillion, and every child born will come into this world with a debt of £22,500.

Whatever the spin about taxing the rich, Labour's tax rises are for the many and not just the few. They are planning to raise taxes on fuel and on average earners. And the result will be a £1,000 tax rise on every family over the next two years.

Public spending

Not for the first time, it will take a Conservative government to get us out of Labour's mess. We understand that we need spending restraint to tackle Labour's debt crisis and avoid crippling tax rises in the recovery. Spending restraint that needs to start now, rather than in two years' time.

50p top rate of tax

We do not believe this new tax rate is the right thing to do. We don't support it, but we're not going to get dragged into playing Labour's games. There are a number of new tax rises we don't agree with, but this one will have to take its place in the queue. The Conservative priority is that of all of Gordon Brown's tax rises, the most important one to avoid is the National Insurance increase for millions of people earning £19,000 or more.

Fuel duty increase

Family budgets are being squeezed yet further as a result of the measures set out in the Budget. We are consulting on plans for a fair fuel stabiliser to replace the current fuel tax regime, so that tax falls when the price rises, and rises when prices fall. This would protect the public finances from fluctuations in the international oil price, and help families cope with rapid changes in the cost of living. "

In summary, this means: taxes up, debts up and unemployment up. No wonder, a number of people in Broadwalk yesterday told me how furious they were with Gordon Brown. They know a con when they see one.

P.S: The latest opinion polls, post-Budget, show Labour support slipping to 27% and the Conservatives up to 45%. It seems like the Government have been rumbled.

P.P.S: The highly respected independent Institute of Fiscal Studies has put out a statement saying:

"The government must close a £90bn hole to bring the budget into balance . That would cost every UK family £2,840 per year by 2017-18 in higher taxes or public spending cuts."

Budget Nightmare

It will take a few hours to digest today's Budget, but there are a few horrific figures, enough to keep us all awake at night.

One of the most worrying is the fact that the Government has drowned us in debt. By 2013-14, debt will reach 79% of Gross Domestic Product. This is a historic high for debt to reach such levels.

With unemployment now at 2.1 million and government borrowing now hitting a record £90 billion, we will be paying for the Government's mishandling of the economy for decades to come.

On tax, the news is also bad, with yet more steep rises in fuel and alcohol duties.

More Later.

Rob Halfon ~ Working hard for Harlow, Hastingwood, Nazeing, Roydon & Sheering. http//roberthalfon.blogspot.com