In his first budget in 2010 George Osborne, as Chancellor of the Exchequer, raised the personal allowance for liability to pay income tax by £1000, thus putting £200 per year into the pockets of those people lucky enough both to have a job and to have a wage sufficient to make them liable to tax. However, he also raised VAT, an indirect tax that impinges more on the poor than the comfortably-of, from 17.5% to 20%
In the same budget Osborne:
- switched the link for benefits payments form the Retail Price Index (RPI) to the lower Consumer Price Index (CPI);
- froze child benefit for three years;
- capped housing benefit:
- introduced a new and more rigorous method of assessment for entitlement to the Disability Living Allowance.
In his resignation letter to the Prime Minister last week Iain Duncan Smith, Secretary of State responsible for the social security system then and for the whole of the next six years, wrote:
[Welfare cuts in the present budget] are not defensible in the way they are placed within a budget that benefits higher earning taxpayers.
I am unable to watch passively whilst certain policies are enacted in order to meet the fiscal self-imposed restraints which I believe are more and more perceived as distinctly political rather than in the national economic interest.
There has been too much emphasis on money-saving exercises and not enough awareness from the Treasury, in particular, that the government's vision of a new welfare-to-work system could not be repeatedly salami-sliced.
IDS concludes his letter by wondering "if enough has been done to ensure we are all in this together. "
What took him so long?.