High tax, low pay

£10K personal allowance

This last week has seen a variety of Tories promoting the idea that the low paid should be relieved from tax, freed from the benefit system and paid more to ensure that there are proper incentives for work.

On Wednesday Maurice Saatchi published his CPS paper “Enemy of the people”. It is presented as a legal indictment of the Labour government.

For me this device is a little tedious but the case he makes is compelling. It is essentially that Labour’s tax and benefit system is a fraud on the poor.

On Thursday it was Mayor Johnson announcing a rise in the London Living Wage to £7.45. Ealing council supported this policy even when it was Ken Livingstone’s, see here. Nowadays council leader Jason Stacey is quoted in the Mayor’s press release:

We support the Mayor’s plan to give hardworking Londoners a living wage. In Ealing we have already introduced a living wage for our dinner ladies and we will be renegotiating other contracts with suppliers when they come up.

This is about making work pay. It is better to see people working and doing something useful and earning a decent wage rather than being dependent on the state through benefits.

Finally, on Friday ConservativeHome was repeating a story from the Express that the Tories will be promising to raise personal allowances to £10,000 at their conference in October.

I wrote a piece advocating a £10,000 personal allowance for ConservativeHome back on March 1st last year.

High tax, low pay

Myners is wrong man for Low Pay Commission

Paul Myners is one of NuLabour’s great and good. He is chairman of the Low Pay Commission and chairman of Guardian Media Group. Today the Times is telling us who has chipped in to Gordon Brown’s Labour leadership warchest, £133,000 in total apparently. Myners came up with £9,700 of his own cash.

At the Low Pay Commission Myners presides over a body which year after year produces a report analysing the efficacy of the minimum wage and setting the level for the next year. Year after year this report fails to comment on fiscal drag, the phenomenon whereby the Chancellor raises personal allowances well below the rate at which wages increase. By this mechanism the Chancellor collects more and more money each year from the low paid as the minimum wage increases faster than allowances.

With this donation Myners has proved himself incapable of being an independent voice for the low paid.

High tax, low pay

Untax the poor

The ConservativeHome website has a feature called 100 policies. This is a place where Conservatives can discuss policy ideas and vote on them. My proposal to reduce the tax threshold to about £10K was published today and sparked off a lively, and mainly positive, debate. I have thought for a long time that taxing low paid people and giving them their own cash back in tax credits is barmy. Add your own voice to the debate.

Ealing and Northfield High tax, low pay

London Living Wage debate at full council

TownhallThe meat of last night’s full council meeting was two debates: one on the London Living Wage and one on Holocaust Memorial Day. The later was entirely uncontroversial and was a good opportunity for all sides to restate their commitment to remembering genocide and passing this knowledge on to the young.

The London Living Wage debate was less so. The Labour group had put up a motion which made a commitment to adopting the London Living Wage and working to ensuring that our whole supply chain adopted it (even if their workforce is not in London). The LibDems upped the anti by trying to extend the commitment to young people. Although the Conservative group, and Leader Jason Stacey in particular, are in favour of making sure that people are properly paid there were real reservations about trying to push this (the LLW) down our supply chain. The council needs to get on with delivering its priorities, like keeping the council tax under control, and not get side tracked with trying to force subcontractors to pay London pay rates to someone working on a remote site in Wales say.

The Tory group and the 3 LibDems voted for the Tory motion with the Labour group being unable to support it:

This Council notes that all employees subject to the pay and conditions of Ealing Council are paid at or above the level of the London Living Wage. This Council believes that all members of our community have the right to earn a living wage. As community leaders this Council will work with partners in seeking to deliver a living wage across Ealing.

Many in the Tory group were wondering why the Labour group was proposing their motion now when they are in opposition rather than implementing it a year ago when they were still in power. Could it be that they didn’t want to be constrained whilst they were still responsible for the bills but now that they are in opposition they can be as irresponsible as they like?

I had prepared a speech on this subject as it is one of my specialist subjects. Unfortunately I did not have the chance to deliver it as we ran out of time. Labour councillors Mahfouz and Bell seemed particularly keen to hear me speak and it is gratifying to know that I have such an ardent fan base amongst the Labour group. Indeed I was a bit disappointed that they failed to quote the blog having done so for the previous two meetings running. Rather than disappoint my fans here is what I would have said:

This year’s London Living Wage of £7.05 was announced by the London Mayor on 18th May. We would be very unwise I think to take lessons in economics from the most economically illiterate man in British politics.

This is the man who raised cash fares on public transport by 33% in January.

This is the man who raised the GLA precept by 13.3% last year.

This is the man who has increased the GLA precept by 175% since the GLA was created only seven short years ago.

In September the Joseph Rowntree Foundation published this report that found that two million households in England struggle to pay their council tax each year. The report found that the majority of people having difficulties paying their council tax are working people on low incomes and in low-value housing. The report found that one in four households in band A receives a summons and that one in seven in band B does.

Is this any surprise when this council under a Labour administration raised council tax by 25% in 2003 and has raised council tax by 71% this century so far?

And it is not just the Labour Mayor and Labour councils that tax the poor so hard.

In October another piece of work paid for by the JRF found that the Labour government’s tax and benefits reforms had weakened work incentives:

  • since Labour came to power someone on benefit trying to improve themselves by working harder gets to keep 2.5p less of each extra £1 they earn
  • over 2 million workers would lose more than half of any increase in earnings to taxes and reduced benefits
  • of these some 160,000 would lose more than 90p of each extra £1 they earned.

What is it you lot [Note that “you lot” is Tory group code for Labour or the Labour group] call Gordon Brown now? The Great Clunking Fist. The Great Clunking Fist coming down on the heads of the poor.

There is no point in the state legislating for high wages and then just confiscating them all again in taxes.

The best thing that this council, the London Mayor and Gordon Brown can do to get off the backs of the poor is to control our costs and keep all taxes low.

High tax, low pay Public sector waste

Prescott’s sign

The Conservative party are today highlighting the cost of changing Prescott’s job title. A new sign for his office cost £645 and new business cards cost £726. The new sign reads “Deputy Prime Minister’s Office” instead of “Office of the Deputy Prime Minister”.

You might think so what? But in high tax, low pay Britain somebody spent the year on the minimum wage doing 37.5 hour weeks to earn £10,342.50 and pay £931.79 in tax. Add in National Insurance and you can see the correlation. When you have a government that spends so freely you even have to tax the low paid hard to pay for the privileges of our masters.

High tax, low pay

Mail on Sunday gives insight into Labour rising star’s mind

David Milliband is one of New Labour’s rising stars. The insight you get from the leaked memo published by the Mail on Sunday today shows how ruthless these people are.

I believe the time has come to consider a more sophisticated approach – a mechanism that allows fuel duty to offset significant drops in oil prices would maintain pressure on the cost of motoring without individual announcements on fuel duty needing to be made.

To put this in plain English: “Hey Gordon, I have a wizard wheeze for a new stealth tax. Instead of making public announcements about fuel duty let’s simply increase it quietly when the price of oil goes down. That way no-one will notice. We can take more and more from people without them noticing. When the oil price goes up petrol prices will go up and we can blame it on the oil price. When oil prices come down we will increase the tax take and no-one will notice. I am a genius potential future chancellor, made in your own mould, please give me a job.”

The full article outlines how the Government might take £1,000 per household off us in the name of greening our country without saying how anything might be given back. It is breathtaking. Think of our RAF lady from Thursday. More tax for rubbish. Less cash for her.

Ex-Mayor Livingstone High tax, low pay

Boris Johnson reveals reality of low pay, high tax Britain

Writing in today’s Telegraph, Boris Johnson describes the plight of an RAF logistics worker who is paid £11,500 a year, or £958 a month – around the minimum wage level. She has to pay £116 in tax and £61 in National Insurance which is just another tax. Earning so little she is being taxed at a rate of 18% even before she pays Council Tax at a rate of £118 a month.

All of those middle class types who are guilty about their own good fortune and hence supportive of high taxes forget about the low paid and pensioners who have to eke out every penny and would rather not pay for a load of those same middle class types to have unproductive jobs on quangos and the suchlike.

In the same paper, on the same day the London Development Agency, a part of the Mayor’s wasteful empire, is looking to spend £35K per annum on an Equality & Diversity Manager.

We are looking for an enthusiastic and knowledgeable equality specialist to work within the LDA Equality and Diversity team on a six month contract.

You will play a pivotal role in driving forward the Gender Equality agenda whilst developing new areas of LDA work such as a focus on migrant workers and forging links with the Commission for Equality and Human Rights. As well as contributing to GLA group programmes and the development of internal projects, policies and strategies you will also provide agency wide leadership on Equality and Community Cohesion Impact Assessment.

You will be a committed and flexible self-starter with a proven track record of putting strategic and policy decisions into practice. You will also require exceptional political sensitivity, influencing ability and a thorough understanding of legislation and issues affecting London’s diverse and multi-racial communities.

So instead of spending public money bringing economic developnment to London the twits at LDA are spending our RAF lady’s hard earned cash on rubbish. It takes the tax from about 16 low-paid people to pay for one Equality & Diversity Manager. Doh!

In reality it is much worse than that as it is not costless to collect tax and the E&D Manager is not costless to employ. Let’s double the number of low-paid people required to support this drone if we want a realistic idea – 32.

High tax, low pay

Gordon’s chains for the poor

IFS.gifThe Joseph Rowntree Foundation have been doing more good work to show how this government ill serves the poor. This time through a report from the IFS funded by them published today.

It makes sobering reading:

  • since Labour came to power someone on benefit trying to improve themselves by working harder gets to keep 2.5p less of each extra £1 they earn
  • over 2 million workers would lose more than half of any increase in earnings to taxes and reduced benefits
  • of these some 160,000 would lose more than 90p of each extra £1 they earned.

If Brown would untax the poor he could really make a difference in people’s lives. In doing so he would probably have to untax all of us. He would rather keep the squeeze on and try to help the most vulnerable with credits only these then trap the poor in dependency. Oh, that’s OK then!

Ealing and Northfield High tax, low pay

Council tax part of high tax, low pay Britain


Today the Joseph Rowntree Foundation publishes a report that finds that two million households in England struggle to pay their council tax each year. The fact that three million summonses are issued each year for non-payment of council tax drove it to this conclusion. The report found that the majority of people having difficulties paying their council tax are working people on low incomes and in low-value housing. The report found that one in four households in band A (the least expensive properties) receives a summons, and one in seven in band B, but fewer than one in ten in bands E-H.

Council tax is therefore hitting the poor hardest. Council tax bills have doubled over the past decade, far outstripping wage increases. The Trust leaps from this analysis to say that lower council tax bands should pay less and higher ones more. No, we need to make sure that council tax stays under control so that we are all protected from out of control council tax rises. Ealing council will be doing its bit to ensure that Ealing people have sensible and small rises in future.

High tax, low pay

Britain’s poor are paying higher taxes under Brown

Alistair Heath writing in the Business this weekend describes how the poor in Britain today are paying more and getting less than they did under the last Conservative government.