Ed Balls MP, Labour’s shadow chancellor, responding to the IFS Budget 2012 briefing, said:
“The IFS has confirmed that George Osborne’s tax raid on pensioners will see nearly four and a half million pensioners losing £83 next year. And people turning 65 next year will lose up to £323 with little forewarning.
“The IFS has confirmed that George Osborne’s tax raid on pensioners will see nearly four and a half million pensioners losing £83 next year. And people turning 65 next year will lose up to £323 with little forewarning.
“George Osborne has bizarrely claimed that pensioners will be better off, while Simon Hughes has gone even further and insisted that ‘there is not a granny tax’ at all. The fact is the normal increase in the state pension just keeps up with inflation, but cuts to personal allowances in the Budget will mean 4.4 million pensioners are worse off in real terms.
“The tax rise on pensioners is not the only tax rise hidden in the Budget. The lowering of the higher rate threshold means 325,000 more people in the squeezed middle will be paying the 40p rate of tax.
“Yet at the same time as people on £41,500 will have to pay more David Cameron and George Osborne are giving a tax cut of over £40,000 to 14,000 people earning over £1 million.
“It’s now even clearer that this was a Budget that asked millions to pay more so millionaires could pay less."
Ed Balls added:
“The IFS is right to cast doubt over the so-called ‘findings’ of the review of the 50p top rate published by the Chancellor. They say that it is uncertain that the cost of cutting the 50p rate is as low as Ministers claim and that it is too early to judge the true effect.
“George Osborne has taken a potentially hugely expensive gamble. By giving a £3 billion tax cut to the very richest – an average tax cut of £10,000 to every top rate taxpayer - he is betting that he will somehow get £2.9 billion back in extra tax revenues from people currently not paying the top rate of tax.
“The Business Secretary suggested last year that this was a highly contentious claim or, to use his precise words, ‘pull the other one’.”
“The tax rise on pensioners is not the only tax rise hidden in the Budget. The lowering of the higher rate threshold means 325,000 more people in the squeezed middle will be paying the 40p rate of tax.
“Yet at the same time as people on £41,500 will have to pay more David Cameron and George Osborne are giving a tax cut of over £40,000 to 14,000 people earning over £1 million.
“It’s now even clearer that this was a Budget that asked millions to pay more so millionaires could pay less."
Ed Balls added:
“The IFS is right to cast doubt over the so-called ‘findings’ of the review of the 50p top rate published by the Chancellor. They say that it is uncertain that the cost of cutting the 50p rate is as low as Ministers claim and that it is too early to judge the true effect.
“George Osborne has taken a potentially hugely expensive gamble. By giving a £3 billion tax cut to the very richest – an average tax cut of £10,000 to every top rate taxpayer - he is betting that he will somehow get £2.9 billion back in extra tax revenues from people currently not paying the top rate of tax.
“The Business Secretary suggested last year that this was a highly contentious claim or, to use his precise words, ‘pull the other one’.”
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