Like Thatcher declaring on the steps of Downing Street in 1979 that, like Francis of Assisi, ‘where there is discord, I will bring peace’, so Cameron in the Queen’s Speech debate has pledged a one-nation Britain – until one looks at the detail and reads between the lines. To take one example, the most recent government statistics show that the poorest 10% of households pay 47% of their gross income in direct and indirect taxes, while the richest 10% pay just 35% of their income in taxes. How is that to be addressed? Further, the higher tax-free personal allowance will do nothing for the 44% of adults, including pensioners, whose income is already too low to pay any income tax. – which is why raising the personal allowances will do more to benefit the well-off than the poor.
The doubling of free childcare to 30 hours a week for 3 and 4-year olds will be largely funded by local authorities who already complain that the existing scheme is chronically under-funded. Local ratepayers will be forced to bear most of the cost, which means that the new funding settlement will burden local residents even more.
The first target of the £12bn welfare cuts is the reduction in the household benefit cap from £26,000 to £23,000. Charities have already stated that this will increase child poverty by at least 40,000, especially for those living in major cities. An alternative measure which would reduce poverty rather than government expenditure – controlling escalating home rental costs – doesn’t feature on the Cameron agenda.
The UK workers’ share of GDP has declined to 50.5%, the lowest level ever recorded, a huge fall from 65.1% in 1976. Yet Cameron’s new anti-trade union bill will make it virtually impossible for unions to undertake legal industrial action which in the last analysis is the only way to resist harsh or exploitative employers. That can only weaken further the position of the lowest paid workers and increase in-work poverty. How is that to be justified when there is clearly high approval rating for the ability of unions to call a strike? – 70% of the public believe that is ‘essential to protect workers’ interests. To show how discriminatory this is, just imagine the furore if Labour were to rule that companies could only donate to the Tory party on the basis of a shareholder opt-in.
The new government has promised to raise at least £5bn a year from clamping down on tax avoidance. This is certainly welcome, if credible, though the index provider MISC has found from its analysis that listed companies avoid at least $82bn of tax every year through tax havens, transfer pricing, royalty charges, and numerous other scams. But all such boasts by Osborne of a crackdown on this massive diversion of tax liabilities have dissipated in practice. One law for the ultra-rich and another for the rest of us.