Wednesday, 6 April 2011

Black Wednesday?

There is a lot of Balls coming out of a certain Ed's mouth regarding today being 'a "Black Wednesday" for families across Britain' as the changes to the tax and benefit system comes into place.  Yes the average family will be worse off - but if you take out the top 20% of families the average are BETTER off from today than they were under the systems yesterday.  I know there will be some losers, they may lose heavily, but they are in general those families who have had disproportionate help in comparison to their need.  

The IFS have looked at the figures and they say that the top 10% of households will see a net decrease of 2.7% of their income from today.  At the same time a two earner household with a combined income of £170,000 would be £32 a week worse off but a couple earning £25,000 a year and with two children would be £12 a week better off as a result.  If this isn't progressive then I must have an incorrect definition! 

Yes it is unfair that a couple whom only have one earner who just reaches the higher rate tax bracket will lose their child support whilst a couple whom have two earners just below this threshold (and therefore a much higher combined income) will keep theirs, however it could be argued that the second couple have more of a need for child care etc.

People are also trying to argue that people are worse off when rolled together with the earlier VAT increase and the decline in real wages - yes they are, but that is no reason to criticize the measures that have come in today that reduce this negative impact.

I'm not trying to pretend that everything is rosy, but I do feel that every penny the Government spends on interest is wasted money and even at the end of this Parliament we will still not be paying back our debt.  Some people are obviously going to be hit harder than others, but the lines have to be drawn somewhere, the important thing is that those most in need aren't left out in the cold, none of these measures coming in today adversely effect those who are struggling the most.

No comments:

Post a Comment