Posts Tagged ‘taxes’

The Tory taste of death

28/04/2017, 02:20:10 PM

by Jonathan Todd

We’re having so many elections that Lynton Crosby is usurping Kylie Minogue as our most ubiquitous Antipodean. Painting campaigns in primary colours of risk and security, Better the Devil You Know is his favourite Kylie track.

So starkly are risk and security contrasted that it rapidly descends to Eddie Izzard’s cake or death sketch. This time the “security cake” is made of Brexit, Ed Miliband’s energy price cap, and Philip Hammond’s dearth of fiscal plans. If your pallet is trapped in May 2015, this cake will taste of what we were told was deathly risk. Then security supposedly meant EU membership, opposition to the energy price cap, and George Osborne’s austerity justifying fiscal plans.

Crosby now sells a confused security composed of what he recently told us was risk. Unknowable risks at that. We are not being asked to vote for Brexit but for whatever Theresa May, after a highly complex negotiation with the EU and its member states, decides Brexit means. As fiscal prudence has been redefined as whatever Hammond deems it.

Blank cheque Brexit, aligned with carte blanche fiscal policy, is no security at all. Making this understood is now the task of Labour PPCs.

Robert Harris, writing not long before the election was called in the New Statesman, “can’t quite understand how the members of the Parliamentary Labour Party can sit there day after day, month after month, year after year, knowing that they’re simply heading towards a kind of mincing machine at the next election.”

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Revealed: George Osborne’s secret £6.5bn tax raid on pensioners

20/03/2015, 11:17:26 AM

by Samuel Dale

Buried deep in this year’s dull Budget was a secret £6.5bn tax raid on pensioners and savers under the guise of radical reforms.

George Osborne’s most significant policy announcement was the proposal to allow pensioners already drawing an annuity to sell their policy in exchange for a lump sum.

It is the second stage in major pensions reform announced in last year’s Budget to allow all over-55s to access their pension pots.

The first stage of pension freedoms is relatively simple. The pension system saw savers build up a retirement pot of cash with generous tax relief on contributions. In exchange they had to buy a secure income or annuity (or face a punitive 55% tax if they withdrew their cash from the pension wrapper).

Annuities work as a reverse insurance product so you pay over a big chuck of cash to the insurer and in return they pay you money every month until you die. Insurers pool the risk so those who die earlier fund the payments for those who live longer than expected lives.

As people live longer insurers are paying a lower amount each month over a longer period, making pensioners buying them poorer. Successive Governments have taken steps to ease the requirement to buy an annuity by allowing wealthier investors to drawdown their own money.

But Osborne’s announcement last year, coming into force on 6 April, is the big bang. It means anyone can withdraw their pension pot at marginal income tax rates (although everyone receives an initial tax-free lump sum of 25%).

The Treasury estimates the behavioural changes will see individuals wanting the money today despite the tax penalties. It will lead to many savers paying income tax on withdrawals they have never paid before.

So how much does it cost?

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Harriet should know better. Loose lips sink ships – and election prospects

17/07/2014, 09:51:16 AM

by Kevin Meagher

Is Harriet Harman the victim of an unfair Tory attack for seeming to suggesting that middle-income earners should pay more tax?

No, she is not. Neither, for that matter, has she been misquoted. She did say that middle-income earners should pay more tax. Labour’s deputy leader was guilty of a clumsy circumlocution, telling LBC radio on Monday that:

 “I think people on middle incomes should contribute more through their taxes”.

Let’s be clear, if she was making a general point about the desirability of a progressive taxation system, then fine. Indeed, she seems to have meant:

“I think people on middle incomes should contribute through their taxes”.

But that’s not what she said. She is guilty of committing an unforced error, using unforgivably loose terminology in a broadcast interview. For a senior frontbencher of her experience it was an amateurish thing to do and has played straight into the Tories’ gleeful hands.

Last night she wrote to David Cameron accusing him of telling fibs:

“You claimed at Prime Minister’s Questions today that ‘yesterday Labour announced – in an important announcement – that it is now their policy to put up taxes on middle income people’. This is not true. It is a lie.”

Tory party chairman Grant Schapps has also been busy. He has written to everyone he has an email address for, launching a poster campaign that the Tories must have been itching to release.

Tory poster

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