Ben Bradshaw: We need tax cuts and investment
I CANNOT understand why the Government is trying to scupper a Europe-wide deal to cap bankers' bonuses. George Osborne and David Cameron have repeatedly stressed the need to reform the banking system following the global financial crisis and the numerous bank scandals. This includes doing something about the bonuses paid, often, it would seem, for failure. There is recognition that this bonus culture helped create excessive risk-taking and corrupt practices. The argument sometimes made against tackling bonuses is it will drive British bankers to Geneva, Dubai or Singapore. But are extremely well-paid London bankers really going to abandon their homes, friends and extended families and decamp to the most boring cities on earth? Some people claimed there'd be a similar exodus because of the 50 pence tax rate. It didn't happen.
George Osborne's battle to save bankers' bonuses comes on the heels of his humiliation over losing Britain's triple A credit rating. This wouldn't matter so much if he hadn't made keeping it the central plank of his economic policy. Osborne's been telling us for nearly three years now that his extreme austerity measures were essential to keep our credit rating.
Now we've lost it he's claiming that shows we need more of the same. It's madness. We've had no growth since Osborne's first budget. Borrowing and debt are going up, not down. People are hurting with rising prices for virtually everything and wages falling in real terms. The plummeting pound will only add to inflation.
What we desperately need to kick-start the economy are some tax cuts – not for millionaires but for middle- and low-income households – and major investment in infrastructure.
Even Lib Dem Business Secretary Vince Cable and some Tories are now conceding as much. With long-term interest rates at record lows there has never been a better time to build the affordable housing, renewable energy schemes, transport schemes and flood defences we need for the future. You can only reduce your deficit if your economy is growing, as President Obama has shown in America. The forthcoming budget is Osborne's last chance to admit his approach has failed and to change course.
WILL the "bedroom tax" be this government's poll tax? That's the question pundits are asking themselves in advance of it coming in on April 1. The poll tax was Mrs Thatcher's attempt to shift local taxation from property to people – so you paid not on the rateable value of your house but the number of adults living in it. It was highly regressive – shifting the tax burden from the better to the less well-off. It caused riots in the streets and led to Mrs Thatcher's downfall. The bedroom tax will mean people living in social housing who are deemed to have too many bedrooms for their needs will pay more. Although it won't affect as many people as the poll tax, it will affect quite a few, including in Exeter. It will also affect families who've used a spare room for a sick or disabled member or a son or daughter away fighting in the Armed Forces – but, perversely, not for someone in prison. It comes in on the same day as some of the lowest income households will find themselves having to pay council tax for the first time because of the Government cuts to council tax relief. So some families are facing a double whammy. Even if they wanted to move to a smaller home, there simply aren't enough smaller council or housing association homes available. If you're worried you might be affected by this or know someone who will be, do let me know. Help and advice are available from Citizen's Advice Bureau and the city council.