MP’s Diary
Good news and bad news
April 1st brought some very good news if you happen to be a millionaire as David Cameron and George Osborne passed on an average £100,000 tax cut to millionaires. It was not a good day for most other people..
On average families will be £891 worse off this year because of changes introduced since 2010. All this comes at a time when a flatlining economy has seen prices rise faster than wages and unemployment rise again this month.
And while Tory Lib Dem Ministers trumpet the small rise in the income tax personal allowance, they should admit that it is hugely outweighed by things like cuts to tax credits and child benefit, higher VAT, the bedroom tax and the granny tax. They are giving with one hand, but taking away much more with the other. It cannot be right to force millions to pay more while millionaires pay less.
Underneath the average figures, some families face particularly harsh hits from changes being introduced this month.
2.4 million families on low incomes will pay on average £138 more in council tax in the year 2013/14, as a result of cuts to council tax benefit, according to the Joseph Rowntree Foundation.
660,000 people will lose an average of £728 per year or £14 a week as a result of the ‘bedroom tax’ according to figures from the Institute of Fiscal Studies.
From Saturday 6 April changes in the new tax year included:
The top rate of income tax cut from 50p to 45p. This will benefit 267,000 people earning over £150,000, including 13,000 people earning over £1 million who will receive an average tax cut of £100,000.
Child benefit will be frozen for a third year, while tax credits and other working-age benefits will be increased by just 1 per cent. These real terms cuts will affect 9.7m households, of which 7.3m (or 75 per cent) are working households according to the IFS.
Changes to the age-related allowance – the so called ‘granny tax’ – will see 3.6m pensioners lose £68 a year and 360,000 people turning 65 this year lose £268..
Supporting Local Pubs
The pub and beer industry are facing very serious challenges and I share their concerns. Community pubs often play a vital part in neighbourhoods across the country. Indeed, an estimated 18 pubs close every week in the UK and this loss is not only felt by local communities but also by our economy as a whole in terms of jobs, trade and taxation. I agree that the Government should be doing more to support local pubs and I was very disappointed, therefore, that in January 2011 the Government increased VAT to 20%, which increased the price of a pint in pubs by 5p and is equivalent to a 12% increase in duty. I have repeatedly urged the Government to temporarily reduce VAT to 17.5% in order to help businesses and consumers at this difficult time but unfortunately the Government have chosen not to do so. I also appreciate that many people and organisations such as CAMRA (Campaign for Real Ale) have expressed serious concern about the impact of the beer escalator on the pub trade.
I supported a Motion in the House of Commons on 1st November 2012 that urged the Government to hold such a review prior to the March 2013 budget and participated in the parliamentary debate. I was pleased to get the opportunity to highlight how the pub industry and pub goers in my constituency are being affected and called for the Government to support the industry by conducting a review. Given that VAT amounts to half the total tax paid on beer in pubs it is vital that any such review also examines the impact of VAT on the pub industry as well as the wider economy.
The Government recently announced an end to the beer duty escalator. It was announced that this year beer duty will not rise by inflation although it won’t be frozen – it will be cut. As of 25 March the tax on a typical pint of beer will be 1p lower and thereafter beer duties will rise only with inflation.
Committee visits Defence Bases
The Prime Minister got a lot of media attention when he visited Faslane Naval Base last week but we had beat him to it when the Defence Select Committee, on which I sit, had visited the base last month as part of a tour of Scotland to examine our defence capabilities and the impact that Scottish Independence would have on defence.
Our tour took in the submarines at Faslane and Coulport; we then visited BAE Systems Maritime - Naval Ships at Scotstoun in Glasgow; then it was off to 3 RIFLES base at Redford Barracks in Edinburgh; over to Fife to the Royal Navy Dockyard at Rosyth; and finally up to RAF Lossiemouth base for the Typhoon fighter aircraft. We all learned a great deal from seeing everything at first hand and the Committee will be producing a report in due course which I will be happy to make available.
Sandra Osborne MP
Good news and bad news
April 1st brought some very good news if you happen to be a millionaire as David Cameron and George Osborne passed on an average £100,000 tax cut to millionaires. It was not a good day for most other people..
On average families will be £891 worse off this year because of changes introduced since 2010. All this comes at a time when a flatlining economy has seen prices rise faster than wages and unemployment rise again this month.
And while Tory Lib Dem Ministers trumpet the small rise in the income tax personal allowance, they should admit that it is hugely outweighed by things like cuts to tax credits and child benefit, higher VAT, the bedroom tax and the granny tax. They are giving with one hand, but taking away much more with the other. It cannot be right to force millions to pay more while millionaires pay less.
Underneath the average figures, some families face particularly harsh hits from changes being introduced this month.
2.4 million families on low incomes will pay on average £138 more in council tax in the year 2013/14, as a result of cuts to council tax benefit, according to the Joseph Rowntree Foundation.
660,000 people will lose an average of £728 per year or £14 a week as a result of the ‘bedroom tax’ according to figures from the Institute of Fiscal Studies.
From Saturday 6 April changes in the new tax year included:
The top rate of income tax cut from 50p to 45p. This will benefit 267,000 people earning over £150,000, including 13,000 people earning over £1 million who will receive an average tax cut of £100,000.
Child benefit will be frozen for a third year, while tax credits and other working-age benefits will be increased by just 1 per cent. These real terms cuts will affect 9.7m households, of which 7.3m (or 75 per cent) are working households according to the IFS.
Changes to the age-related allowance – the so called ‘granny tax’ – will see 3.6m pensioners lose £68 a year and 360,000 people turning 65 this year lose £268..
Supporting Local Pubs
The pub and beer industry are facing very serious challenges and I share their concerns. Community pubs often play a vital part in neighbourhoods across the country. Indeed, an estimated 18 pubs close every week in the UK and this loss is not only felt by local communities but also by our economy as a whole in terms of jobs, trade and taxation. I agree that the Government should be doing more to support local pubs and I was very disappointed, therefore, that in January 2011 the Government increased VAT to 20%, which increased the price of a pint in pubs by 5p and is equivalent to a 12% increase in duty. I have repeatedly urged the Government to temporarily reduce VAT to 17.5% in order to help businesses and consumers at this difficult time but unfortunately the Government have chosen not to do so. I also appreciate that many people and organisations such as CAMRA (Campaign for Real Ale) have expressed serious concern about the impact of the beer escalator on the pub trade.
I supported a Motion in the House of Commons on 1st November 2012 that urged the Government to hold such a review prior to the March 2013 budget and participated in the parliamentary debate. I was pleased to get the opportunity to highlight how the pub industry and pub goers in my constituency are being affected and called for the Government to support the industry by conducting a review. Given that VAT amounts to half the total tax paid on beer in pubs it is vital that any such review also examines the impact of VAT on the pub industry as well as the wider economy.
The Government recently announced an end to the beer duty escalator. It was announced that this year beer duty will not rise by inflation although it won’t be frozen – it will be cut. As of 25 March the tax on a typical pint of beer will be 1p lower and thereafter beer duties will rise only with inflation.
Committee visits Defence Bases
The Prime Minister got a lot of media attention when he visited Faslane Naval Base last week but we had beat him to it when the Defence Select Committee, on which I sit, had visited the base last month as part of a tour of Scotland to examine our defence capabilities and the impact that Scottish Independence would have on defence.
Our tour took in the submarines at Faslane and Coulport; we then visited BAE Systems Maritime - Naval Ships at Scotstoun in Glasgow; then it was off to 3 RIFLES base at Redford Barracks in Edinburgh; over to Fife to the Royal Navy Dockyard at Rosyth; and finally up to RAF Lossiemouth base for the Typhoon fighter aircraft. We all learned a great deal from seeing everything at first hand and the Committee will be producing a report in due course which I will be happy to make available.
Sandra Osborne MP