It is true that abandoning plans to raise national insurance contributions (NICs) for some self-employed workers means the numbers no longer add up, so Philip Hammond has an arithmetical problem on his hands, which will become a revenue-raising problem. And it is the ever-increasing difficulty in finding ways to take money from people without whipping up a political storm that has landed the government in this mess in the first place. For all that, the problem extends beyond the finances.
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Showing posts with label Tory manifesto. Show all posts
Showing posts with label Tory manifesto. Show all posts
U-turns
With a u-turn announced last night on the Pasty Tax and the watering down of caravan taxes and secret courts, Guido thought he’d put together the comprehensive one stop guide to Coalition u-turns:
- Rape anonymity
- Selling off the forests
- Vanity photographer on the public payroll
- Scrapping school milk for under-5s
- Scrapping Bookstart
- Scrapping the Financial Inclusion Fund
- Cutting Housing Benefit for long-term jobseekers
- Immigration target policy reduced to an “ambition”
- Coastguard cuts
- Circus animals ban
- Reduction in BBC World Service cuts
- Cutting support for disabled people in care homes
- Scrapping the Office of the Chief Coroner
- Automatic prison sentences for carrying a knife
- 50% sentence reductions for an early guilty plea
- Scrapping the Youth Justice Board
- Scrapping Domestic Violence Protection Orders
- Plans to introduce unannounced Ofsted inspections
- Watering down of Child Benefit cuts
- Video games tax relief kept after all
- Scrapping NHS targets
- Joint Strike Fighter mess
- Watering down plans to recall MPs
- Rowing back on Secret Courts
- Pasty Tax scrapped
- Caravan Tax watered down
Strong and unstable?
Theresa May has not yet been Prime Minister for three months and she has already u-turned on five significant policy issues:
- EU citizens’ right to remain: During her leadership campaign May refused to guarantee the status of EU nationals living in the UK, now the government says they are “100% sure” they’ll be allowed to stay.
- Hinkley Point: May announced a welcome pause on the new power plant, before approving the same deal proposed by Osborne.
- Northern Powerhouse: Reports suggested May had decided to ditch Osborne’s pet project, she’s now said she’s fully behind it.
- Foreign doctors: Jeremy Hunt suggested foreign doctors wouldn’t be able to stay in the country if they could be replaced by British recruits. May then failed three times in an interview to say the policy would go ahead.
- Foreign staff lists: Amber Rudd’s plan to force companies to publish how many foreign staff they employ has now been abandoned.
Strong and stable?
National Insurance IncreaseIn the 2017 Budget, Philip Hammond announced he would be increasing National Insurance Contributions for self-employed
people, despite a promise in the Conservative manifesto not to do so.
people, despite a promise in the Conservative manifesto not to do so.
The idea caused controversy, despite it costing no more than 60p per day. And a week on, the Chancellor did an about-turn and revealed that he would no longer be increasing NICS in this parliament.
Taking In Refugee Children
Ministers accepted the Dubs amendment last year, saying they will take in 3,000 unaccompanied children from the Jungle migrant camp in Calais. But after accepting just 350 children, the government changed their mind and decided not to accept any more.
Ministers accepted the Dubs amendment last year, saying they will take in 3,000 unaccompanied children from the Jungle migrant camp in Calais. But after accepting just 350 children, the government changed their mind and decided not to accept any more.
Responding to the decision, Lord Dubs said: "During the Kindertransport, Sir Nicky Winton rescued 669 children from Nazi persecution virtually single-handedly. I was one of those lucky ones. It would be a terrible betrayal of his legacy if as a country we were unable to do more than this to help a new generation of child refugees."
Foreign Worker Quotas
Barely a week after Home Secretary Amber Rudd announced a controversial proposal to force companies to publish the amount of foreign workers they employ at the Tory party conference, the government was forced into a humiliating climbdown.
Barely a week after Home Secretary Amber Rudd announced a controversial proposal to force companies to publish the amount of foreign workers they employ at the Tory party conference, the government was forced into a humiliating climbdown.
A cacophony of condemnation helped topple the policy, with commentators from across the political spectrum lining up to slate the policy. LBC’s very own James O’Brien’s take on the policy took the internet by storm.
The government now say the data will be collected, but not made public. It will be use it to identify skill shortages in key industries. However, Labour’s Harriet Harman pointed this data may still come to light under freedom of information laws.
Hinkley Point
Theresa May sparked widespread speculation that she was poised to can the controversial Hinkley point deal with French utility EDF, when she announced a pause in the process shortly after taking office. However, only months later the deal has been signed, on terms broadly similar to those agreed by David Cameron’s government.
Theresa May sparked widespread speculation that she was poised to can the controversial Hinkley point deal with French utility EDF, when she announced a pause in the process shortly after taking office. However, only months later the deal has been signed, on terms broadly similar to those agreed by David Cameron’s government.
Key concerns focus on the significant tax payer contribution to the project, with the general public guaranteeing EDF a price for the electricity it produces for decades at nearly double the price it can be bought in the wholesale market from other sources.
The role of China in the project has also raised eyebrows. However, with the PM signalling a more interventionist role for government in key industries at the Tory party, this deal may fit in well with her new vision for the state.
New London Airport
Theresa May's precarious position in the Commons may have been a key factor in her decision to kick the long awaited decision on new airport capacity for London into the legislative long grass.
Theresa May's precarious position in the Commons may have been a key factor in her decision to kick the long awaited decision on new airport capacity for London into the legislative long grass.
The government is due to announce a proposal on whether to build a new runway at either Heathrow or Gatwick on Tuesday. Any vote on the plans, however, has been delayed for at least a year, staving off mutiny by Tory MPs until a later date.
May faces opposition from Foreign Secretary Boris Johnson, who has said he will 'lie down in front of the bulldozers' to stop Heathrow being built. Boris, along with other members of the cabinet, have been granted a 'derogation' allowing them to oppose a new runway, with some conditions attached.
10 million pensioners?
"Today marks a big shift away from that world of Conservative politics. On pensioner benefits the manifesto not only proposes means testing Winter Fuel Payments, but doing so aggressively to raise significant sums. In 2015 Labour symbolically called for the payments to be withdrawn from the richest pensioners with incomes of over £43,000, raising just £100 million. Theresa May is proposing to go much further, restricting the payments to “the least well-off pensioners”. The manifesto avoids spelling out what this means, but if done within the current system of pensioner support that looks set to restrict the payments to the very poorest 2 million pensioners entitled to pensions credit, saving in the region of £1.7 billion by taking the benefit away from 10 million pensioners."
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Social care
The Conservatives announced changes to the way social care is funded in England as part of their manifesto launch on Thursday.
Social care is devolved, so there are different policies in Scotland, Wales and Northern Ireland.
Unlike Labour and the Liberal Democrats earlier in the week, the Conservatives have not provided official costings for their policies in their manifesto.
The key changes are:
- Taking into account the value of someone's home when means-testing for care at home, in the same way as they currently do for those in a care home
- Increasing the amount of savings and property people can have while still getting their social care costs paid from £23,250 to £100,000
A government source suggested that the combination of these policies and the plan to means-test the winter fuel payments could save a total of around £2bn.
Winter fuel allowance currently costs £3bn a year. We do not know on what basis it will be means-tested, but it is not unreasonable to think half the money could be saved by means-testing, as the Institute for Fiscal Studies suggested.
About three times as many people receive care at home than are in care homes, so the change to allow the value of their homes to be included in means-testing would affect a lot of people.
A key group affected would be those receiving care at home whose properties are worth more than £100,000.
In London, where some areas have average prices of more than £1m, that will be a lot more homes than in Burnley, where an average house costs £88,000.
That is average measured by the median, which is the house in an area for which half are dearer and half cheaper.
Only three local authorities in England have median house prices below £100,000 and you can see from the map above where they are.
We also have an idea of the distribution of wealth across England - we're interested in the group of people with assets of more than £100,000 who would have had to pay for care under the old system but not under the new one.
We don't have figures on that precise group, but the ONS wealth and assets survey can help.
The chart below shows that 85% of people in Britain aged 65 or older lived in households with wealth of more than £85,000 in 2014, with almost three-quarters having assets worth more than £200,000.
Social care plans under attack
The Conservatives' proposed revamp of the way people pay for social care have been criticised by an ex-government adviser and opposition parties.
There is universal acknowledgement that the system was overdue for reform, as social services in England can no longer finance rising demand.
The plans will see many more people paying for more of their home care.
Concerns have been led by former government advisor Sir Andrew Dilnot who proposed a cap on costs in 2011.
Sir Andrew criticised the decision to abandon the cap idea and said the changes would leave elderly people "helpless" until their assets reach £100,000.
Labour and the Liberal Democrats also attacked the plans, but Prime Minister Theresa May said the reforms were essential to ensure fairness "across the generations" and long-term sustainability of the social care system.
Under the system that had been due for implementation in 2020 nobody would have to pay more than £72,000 towards the cost of social care they receive at home.
People who have assets of more than £23,250 have to pay for all their care, those with assets of between £14,250 and £23,250 would get some help and below that all care is funded.
Under the new Conservative plans nobody who has assets of less than £100,000 would have to pay for care. But crucially, for the first time in the case of people being cared for in their own home, that calculation includes the value of their house. If their assets are above £100,000 they will have to pay until their value reaches that cut-off point.
Dementia tax?
It is currently Dementia Awareness Week.....
The policy
The new Tory policy is to give the financial services industry the opportunity to administer the asset stripping of elderly people who are unfortunate enough to end up with dementia, physical infirmities or other conditions that require social care.
If the elderly person is deemed to have assets worth over £100,000 (the average house price in the UK is £215,000) then they will be treated as if they are rich and made to pay their own social care costs, even though they payed a lifetime of National Insurance contributions to cover the cost of health and social care in their old age.
The Tories have ever-so-kindly said that the elderly people won't have to sell their homes immediately in order to cover the costs, but that they can get "equity release" products so that the wealth can be extracted from the value of their homes after they die.
Creating a new market
One of the obvious beneficiaries of this policy will be the financial services industry who will get to design and market these "equity release" products.
A consideration of the root cause of the social care problem just goes to show how depraved this is. Here's a simple timeline of events.
It's funny how the Tories can afford to squander £billions in tax revenue by slashing the corporation tax rate from 28% in 2010 to just 17% in 2020, but they're dressing this Dementia Tax up as some kind of necessary evil.
The cost of these corporation tax cuts stacks up to a mind-boggling £70 billion giveaway to corporations between 2015 and 2020, but somehow they're telling us we're so broke that we can't even afford to look after our elderly people when they get ill in their old age.
Don't ever let the Tories try to convince you that social care can't be afforded. It can. They just don't want to pay for it because they see elderly people's houses as rich pickings.
Theft
The pro-Tory mainstream media have worked tirelessly to actually try and dress this depraved policy up as a good thing, but there's no other way of seeing it than as a move to asset strip elderly people for the "crime" of falling ill in their old age.
These elderly people have paid tax and National Insurance their whole lives, while working hard to save and buy their own homes. Now "Theresa May's Team" have decided that they don't actually deserve the health and social care that they paid for through their taxes because the Tories and their chums see their homes as lucrative low-hanging fruit to be harvested in order to fund even more tax breaks for corporations and the super rich.
Making people fund their own social care by asset stripping them is a theft of all of those years of National Insurance contributions.
The workaround
Once upon a time a fresh faced Tory MP called George Osborne appeared on the Daily Politics and advised a caller that it's easy for rich people to get the taxpayer to pay for their social care if they set up tax-dodging scams to hide their assets.
This self-serving Tory mentality has not changed.
Selfish "I'm alright Jack" types will skirt around the Tory Dementia Tax in exactly the way that George Osborne advised, while ordinary people who worked their whole lives to buy their house and wouldn't dream of setting up tax-dodging scams will be the ones to be hit by it.
People who didn't buy their own property won't be hit by it, people who see no moral problem with tax-dodging schemes won't be hit by it. The only people to be hit by Dementia Tax will be the hard-working people who are naive enough to actually behave honestly and play by the rules in Tory Britain.
Conclusion
It's hard to tell if the Tories decided to launch such a depraved policy in the middle of dementia awareness week out of sheer incompetence, or whether it's their sick idea of a joke.
Whatever the case, a plot to allow financial services industry to asset strip dementia sufferers has to be one of the most inhumane manifesto pledges ever devised.
Still. Millions of people are going to go out and vote Tory because they see the corporate administered asset stripping of dementia sufferers as a price worth paying for whatever (almost certainly imaginary) benefit they think they'd personally get from a Tory government.
http://anotherangryvoice.blogspot.co.uk/
The policy
The new Tory policy is to give the financial services industry the opportunity to administer the asset stripping of elderly people who are unfortunate enough to end up with dementia, physical infirmities or other conditions that require social care.
If the elderly person is deemed to have assets worth over £100,000 (the average house price in the UK is £215,000) then they will be treated as if they are rich and made to pay their own social care costs, even though they payed a lifetime of National Insurance contributions to cover the cost of health and social care in their old age.
The Tories have ever-so-kindly said that the elderly people won't have to sell their homes immediately in order to cover the costs, but that they can get "equity release" products so that the wealth can be extracted from the value of their homes after they die.
Creating a new market
One of the obvious beneficiaries of this policy will be the financial services industry who will get to design and market these "equity release" products.
A consideration of the root cause of the social care problem just goes to show how depraved this is. Here's a simple timeline of events.
- The financial services industry gambles itself into insolvency betting on all kinds of dodgy sub-prime mortgage junk.
- The Labour government steps in to save the banks and avert financial catastrophe by borrowing hundreds of billions to prop up the banks and salvage the nose-diving economy.
- The Tories use this high level of borrowing as an excuse to launch their ideological austerity agenda, and set about slashing government spending.
- One of the worst affected areas is social care which suffers £4.6 billion in Tory cuts (at a time of rising demand).
- The Tories announce a plan to force pensioners to pay for their own social care by asset stripping the value of their homes.
- The financial services industry are handed a lucrative new "equity release" market to profit from, and the Tory press describe this kind of corporate equity extraction scheme as if it's some kind of wonderful favour to the elderly that they're being allowed to live in their own house as its equity is harvested away by the banks that screwed the economy in the first place!
It's funny how the Tories can afford to squander £billions in tax revenue by slashing the corporation tax rate from 28% in 2010 to just 17% in 2020, but they're dressing this Dementia Tax up as some kind of necessary evil.
The cost of these corporation tax cuts stacks up to a mind-boggling £70 billion giveaway to corporations between 2015 and 2020, but somehow they're telling us we're so broke that we can't even afford to look after our elderly people when they get ill in their old age.
Don't ever let the Tories try to convince you that social care can't be afforded. It can. They just don't want to pay for it because they see elderly people's houses as rich pickings.
Theft
The pro-Tory mainstream media have worked tirelessly to actually try and dress this depraved policy up as a good thing, but there's no other way of seeing it than as a move to asset strip elderly people for the "crime" of falling ill in their old age.
These elderly people have paid tax and National Insurance their whole lives, while working hard to save and buy their own homes. Now "Theresa May's Team" have decided that they don't actually deserve the health and social care that they paid for through their taxes because the Tories and their chums see their homes as lucrative low-hanging fruit to be harvested in order to fund even more tax breaks for corporations and the super rich.
Making people fund their own social care by asset stripping them is a theft of all of those years of National Insurance contributions.
The workaround
Once upon a time a fresh faced Tory MP called George Osborne appeared on the Daily Politics and advised a caller that it's easy for rich people to get the taxpayer to pay for their social care if they set up tax-dodging scams to hide their assets.
This self-serving Tory mentality has not changed.
Selfish "I'm alright Jack" types will skirt around the Tory Dementia Tax in exactly the way that George Osborne advised, while ordinary people who worked their whole lives to buy their house and wouldn't dream of setting up tax-dodging scams will be the ones to be hit by it.
People who didn't buy their own property won't be hit by it, people who see no moral problem with tax-dodging schemes won't be hit by it. The only people to be hit by Dementia Tax will be the hard-working people who are naive enough to actually behave honestly and play by the rules in Tory Britain.
Conclusion
It's hard to tell if the Tories decided to launch such a depraved policy in the middle of dementia awareness week out of sheer incompetence, or whether it's their sick idea of a joke.
Whatever the case, a plot to allow financial services industry to asset strip dementia sufferers has to be one of the most inhumane manifesto pledges ever devised.
Still. Millions of people are going to go out and vote Tory because they see the corporate administered asset stripping of dementia sufferers as a price worth paying for whatever (almost certainly imaginary) benefit they think they'd personally get from a Tory government.
http://anotherangryvoice.blogspot.co.uk/
The Conservative Manifesto and your money
Tax
Theresa May has pledged not to raise VAT, but hasn’t ruled out rises to Income Tax or National Insurance; giving her more room to manoeuvre should she need to raise extra cash.
David Cameron's ‘triple tax lock’, has caused trouble for Chancellor Phillip Hammond, who was forced into a U-turn on his plans to hike National Insurance for the self-employed earlier this year.
To soften the blow May has talked up the Tory party pledge to raise the Personal Tax Allowance to £12,500 and the higher rate threshold to £50,000 by 2020.
Wages
The Conservatives will increase National Living Wage to 60% of median earnings by 2020 and then in line by the rate of median earnings.
It has also pledged to put tighter controls on company pay.
Pensions
The State Pension ‘triple lock’, which ensures pensioner income rises by the higher of inflation, average earnings or 2.5% each year will be replaced with a ‘double lock’ in 2020.
The ‘double lock’ will mean the State Pension will rise by the higher of average earnings or inflation but will no longer be guaranteed to rise by at least 2.5%.
The Conservatives will also get tough on companies that neglect their pension schemes. It will give new powers to the Pensions Regulator to step in and issue fines.
Benefits
The Winter Fuel Allowance, which pays up to £300 to help pensioners with fuel bills – whether they need it or not – will be means tested.
The move will mean better-off pensioners will no longer get the benefit.
Currently the scheme costs £3 billion, but the Institute for Fiscal Studies (IFS) reckons the bill could be halved by moving to a means-tested system.
The money raised from the change is expected to fund health and social care.
All other pensioner benefits, including free bus passes, eye tests, prescriptions and TV licences, won’t be impacted for the duration of this parliament.
Social care
The Conservatives will tackle the rising cost of social care in England with new reforms to means testing.
The threshold for free social care will rise from £23,250 to £100,000.
Currently anyone with assets worth more than £23,250 must pay for the full cost of residential care. Those who don’t get costs covered by their local authority.
Under the Conservative proposals the value of assets would have to be £100,000 before they had to pay, but property would be included in the calculation for people seeking care in their homes.
It's estimated the move would make the Treasury more than £1.3 billion a year, which will go towards funding those that fall under the new £100,000 limit.
To soften the blow the Tories promise no-one will have to sell their home while they or a surviving partner is alive to fund residential or home care.
Instead, the money will be recovered later when they die or sell their home with £100,000 ring-fenced to be passed on to loved ones.
For more on the costs take a look at our guide: How to pay for the cost of care.
Schools
The Conservatives will scrap universal free school lunches for infants and replace them with free school breakfasts for all primary children.
Children from low-income families will continue be able to get free school lunches throughout primary and secondary school.
It’s thought the move would save £650 million a year, which would go towards boosting school funding by £4 billion over the next parliament.
The Conservatives will also scrap the ban on new grammar schools.
Businesses
The Tories will conduct a full review of business rates.
It will also stick to its plan to lower Corporation Tax to 17% by 2020.
Deficit
The Conservatives have pledged to clear the deficit and balance the budget by 2025, three years later than the revised target set by former Chancellor George Osborne.
Mayism
Because Conservatism is not and never has been the philosophy described by caricaturists. We do not believe in untrammelled free markets. We reject the cult of selfish individualism. We abhor social division, injustice, unfairness and inequality. We see rigid dogma and ideology not just as needless but dangerous.
True Conservatism means a commitment to country and community; a belief not just in society but in the good that government can do; a respect for the local and national institutions that bind us together; an insight that change is inevitable and change can be good, but that change should be shaped, through strong leadership and clear principles, for the common good.
We know that our responsibility to one another is greater than the rights we hold as individuals. We know that we all have obligations to one another, because that is what community and nation demands. We understand that nobody, however powerful, has succeeded alone and that we all therefore have a debt to others. We respect the fact that society is a contract between the generations: a partnership between those who are living, those who have lived before us, and those who are yet to be born.
- Theresa May
Edmund Burke. It is an adaptation of this quote from Burke’s Reflections on the Revolution in France.
Society is indeed a contract. Subordinate contracts for objects of mere occasional interest may be dissolved at pleasure—but the state ought not to be considered as nothing better than a partnership agreement in a trade of pepper and coffee, calico or tobacco, or some other such low concern, to be taken up for a little temporary interest, and to be dissolved by the fancy of the parties ... it becomes a partnership not only between those who are living, but between those who are living, those who are dead, and those who are to be born.
Market failure in the Tory Manifesto
"So people will be left helpless, knowing that what will happen is that if they are unlucky enough to suffer the need for care costs they will be entirely on their own until they are down to the last £100,000 of all of their wealth including their house,” he said.
“I do feel very disappointed for all of us, the millions of people who are very, very anxious about this, and I’m a bit surprised, because what social care is is a classic example of a market failure where the private sector cannot do what’s needed.”
Dilnot said the idea ran counter to Theresa May’s promise that the state would step in when markets were broken. “This was an absolute open goal for that kind of approach and it seems to have been missed,” he said, adding that the plans would help some people but leave the majority of those being cared for in their own homes worse off."
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