It takes some gall to say, as Cameron has today,’Tories are for everybody’, or for Osborne to say, as he did on Monday, ‘We’re not going to get through this as a country if we divide, denounce and demonise’, and then deliberately impose a further £10 benefit cuts on some of the poorest in society. It’s not as though it’s their fault. The bankers caused the crash in the first place, and now Osborne’s perversely wrong economic policy has caused the ensuing deficit to grow rather than reduce. So having already imposed £18bn cuts in benefits (60% of which are yet to come into force) while at the same time there have been no cuts and no tax increases for the very rich, how can it be fair to hammer the poor again, which will leave them on average some 25% worse off than before Osborne targeted his blitzkrieg on them? But of course it’s not about fairness at all, it’s about cheap politics. The only popular Tory policy is bashing the poor, ‘a la Mail and Sun, so even now there may still be more to come.
So were there alternatives? Of course there are. Reverse a self-destructive endless cuts policy for a jobs and growth strategy, as even the IMF is now telling him. But even if Osborne still retains his fetish for cuts which he wrongly says the markets are demanding – in fact they’re far keener to see growth than any further cuts – there are many far better ways to secure an additional £10bn than taking the axe again to benefits which even Cameron has admitted are the ‘automatic stabilisers’ in a recession.
Pension tax relief costs £21bn a year, two-third of which goes to higher-rate taxpayers, especially the very rich on over £100,000 a year. A General Anti-Tax Avoidance Principle bill would close down hundreds of artificial tax avoidance contrivances and yield several billion pounds extra per year. Abolishing the anachronistic non-domiciliary rule, this bringing the UK into line with every other country in the Western world except Ireland, would bring in at least £3-5bn a year. Raising capital gains tax to 40% to align it with higher-rate income tax, which is where Thatcher left it, would again provide the Treasury with a yield in the low billions. A wealth tax, a mansion tax or a land value tax, none of which of course the Tories would touch with a bargepole, could well raise £10bn or more. And all that’s without mentioning the restoration of the 50p rate for those on more than £3,000 a week, including 40,000 millionaires making a killing of an extra £14,000 a year on average.