Posts Tagged ‘budget 2015’

The idea that the sugar tax will benefit primary school sport is laughable

05/04/2016, 09:42:35 PM

by Lucy Ashton

The cherry on the Chancellor’s Budget cake was the celebrity-hyped sugar tax.

Jamie Oliver took credit for persuading the Government to impose a tax on sugary drinks, which is estimated to cost the equivalent of 18p to 25p per litre.

The Government says the £530m the tax will raise will be spent on sport in primary schools, although drink companies have until 2018 to change their recipes and reduce the amount of sugar before the new tax comes in.

But this is a bittersweet tax which will hardly help nation’s obesity problem – a crisis which health officials say poses a greater threat than terrorism.

The Youth Sport Trust says one in three children who leave primary school are obese or overweight  – putting them at an increased risk of cancer, type 2 diabetes and heart disease along with developing mental health problems such as depression and anxiety.

But the new tax will barely tackle this issue. For a start, everyone slurping these high calorie drinks knows they are full of the white stuff. The real tax should be on the manufacturers who sweeten everything from cereals and yoghurts to tomato soup and bread – savoury food with hidden sugar.

The idea that the tax will benefit primary school sport is laughable. Around 10,000 playing fields were sold off under the 1979-1997 Conservative governments. There were a total of 31 plans to sell off school playing fields approved by the coalition government.

Sport England is so concerned, it is spending £33 million of National Lottery funding to protect and improve community sports fields.

And the playing fields are only needed if schools actually have PE lessons. Growing financial constraints and increasing demands from Ofsted to focus on the core subjects mean PE is often sidelined.

Darren Padgett is director of Team Activ, an award winning not-for-profit organisation which provides sports competitions, PE teacher training and after school sports clubs with all of Barnsley’s secondary schools and two thirds of primary schools.

Darren says the sugar tax is a start but far more needs to be done to improve sport in schools.

“At Team Activ, we strongly believe in the power of sport to improve academic and behavioural standards but the last few years have been particularly difficult for those responsible for delivering physical education in schools.

“The sugar tax is a step in the right direction, but the funds raised for sport in schools need to be ring-fenced to ensure they are allocated correctly.

“We’ve seen very positive results: schools involved in our programmes report more motivated pupils, higher self-esteem and better behaviour within class.”

It’s clear we need a fully rounded strategy, involving diet, exercise and education to tackle the obesity timebomb, not just a sprinkling of sweeteners.

Lucy Ashton is a journalist and former Political Editor

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Osborne has laid the most obvious trap for Labour on tax credits. Will the party blunder in?

13/07/2015, 12:21:26 PM

by Jonathan Todd

Ten years since 7/7. Ten years since London won the Olympics. Ten years since Robin Cook was telling Labour party events that he was meeting people whose fortunes have been transformed by tax credits, but who don’t realise that they have the (then Labour) government to thank rather than some obscure administrative change at the Inland Revenue.

While the Labour government did good, Cook argued, it was not credited with having done it, as it was done by stealth. The tax credits architecture that Gordon Brown quietly built, and which helped the UK to an impressively robust employment performance, even after the financial crisis, was loudly dismantled in George Osborne’s Budget.

Where New Labour reassured business, while using state levers to redistribute with minimal fanfare, Ed Miliband was a Labour leader eager to have business do more. Whether Osborne would have found it harder to take an axe to tax credits if Labour had trumpeted them as bullishly as Cook preferred, as well as whether Osborne would have been in the position to do so had Miliband more assiduously courted business, are imponderables.

As Osborne warmly embraced Iain Duncan-Smith’s welfare reforms to declare himself the bringer of social justice and adopted a form of the predistribution beloved of Miliband by accompanying his dilution of tax credits with legislation for a claimed living wage, Labour’s attempt to come to terms with these unknowns is complicated by Tory cross-dressing.

In spite of events in Greece, the Budget, unlike in 2010, was pitched less as a bulwark against calamity and more as a staging post to better future. In which we are all invited to share. Reality may struggle to keep pace with the one nation rhetoric. Particularly when a tool for creating an income floor (the statutory minimum wage, which is what Osborne has raised through his supposed living wage) is deployed as a replacement for incentives to additional work (working tax credits).

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It’s the budget next week. Does Labour even have a policy on tax?

03/07/2015, 05:45:29 PM

by Samuel Dale

George Osborne is putting the finishing touches to a Budget that will define our national politics for the next five years.

I have previously written how Osborne is both shifting the centre on areas such as fiscal responsibility and tax cuts while moving to the centre on areas where the public opinion will not follow. In other words, political pragmatism – remember that?

The 8 July Budget will do both. It will cut taxes over the parliament, entrench a smaller state as well as moving on to traditionally Labour areas such as boosting low pay.

On moving the centre, Osborne could create a roadmap to merging national insurance and income tax over the next few years in the biggest simplification of tax this country has seen since the 1980s.

As already hinted by the prime minister, he could set in train moving Britain away from a system of tax credits towards a living wage. A lower welfare, lower tax society.

Or he could build on his outlandishly popular pension reforms from last year with a long overdue reform of savings taxation.

He could do all three and more. In the last parliament major reforms to stamp duty and pensions alongside corporation tax cuts shows a bold Chancellor wanting to get out.

He’s also revolutionised how the self-employed file tax returns and he’s simplifying income tax bands on lower and middle earners.

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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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Budget 2015: The quiet moments matter

19/03/2015, 02:27:16 PM

by Jonathan Todd

Budgets are supposed to be big moments. The kind that determine general elections. But maybe they are decided by millions upon millions of quieter moments. When payslips are inspected, profits turned, and housing wealth accumulated.

In these quieter moments judgments are made on the economy’s performance. In turn, these bear upon general election votes. It is a eighteen months since Uncut spotted a gradual rise in the proportion of the electorate reporting the economy as doing well and a steady decline in Labour’s poll lead. We ran a regression to assess the relationship between these data series and postulated that the Tories would overtake Labour when a quarter of the electorate came to the view that the economy is doing well.

In May last year, when YouGov’s tracker on economic sentiment first started to bump up against a quarter of the electorate being of this belief, we noted that Tory poll leads had started to emerge. These leads were faltering and slow to confirm themselves. Like the upward trajectory in the proportion of the electorate positive about the economy.

24 per cent of the electorate thought the economy was doing well last May and Labour held an average of a 3 point poll lead, as the table below illustrates. Occasional Tory leads then existed but the average favoured Labour. The Tories weren’t consistently ahead but nor was economic sentiment resoundingly over a quarter. At 30 per cent, economic sentiment now comfortably clears the quarter threshold, and Labour’s poll lead is less impressive than last May.

If we simply compare the data in May 2014 and March 2015, they seem to confirm the original Uncut hypothesis: the more the economy improves, the narrower Labour’s lead. The pattern of these series between these two months, however, rewards inspection.

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The budget was Labour’s last chance. History is clear about what happens next

19/03/2015, 12:08:19 PM

by Atul Hatwal

Labour desperately needed George Osborne to produce another omnishambles budget. Something to reverse the ebbing tide of Labour’s poll lead.

It didn’t happen.

Osborne may have concocted an utterly ludicrous public spending profile for the next parliament – savage, penal cuts immediately followed by lavish expenditure, which led even the Office for Budget Responsibility to describe it as a “rollercoaster” – but he managed to kill Labour’s most potent attack line: that spending would be taken back to levels last seen in the 1930s.

Now, with under two months until the general election, history is very clear about what happens next.

Labour’s poll rating will almost certainly slide. Over the past fifty years of elections, Labour has lost an average of 4% in the last two months before an election.

Given an average poll rating in March (so far) of 33%, this would take Labour back to square one on May 7th with 29% of the vote, the same as 2010.

Poll rating1

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