Tax hike to hit low earners says local MP

November 25, 2008 1:08 PM
Mark and Nick

Nick Clegg leader of the Lib Dems and Mark Hunter are calling for lower income taxes for lower and middle income families

Cheadle MP, Mark Hunter responded to yesterday's Pre-Budget Report (PBR) by calling on the Government to take real action to change unfair tax system by cutting income tax for lower and middle income families.

In Labour's PBR, the Chancellor Alistair Darling acknowledged that the UK tax system was inherently unfair but then announced an increase in National Insurance that will anyone earning over £19,000. The Government decided to increase National Insurance by 0.5% from 2011 which will leave someone earning £25,000 £30 a year worse off. The proposal would raise £5 billion while the new 45p income tax rate also announced would only raise £670 million, again leaving low and middle income families paying more than the wealthy.

Speaking after the PBR Mr Hunter said, "The Chancellor said during the PBR that additional taxes should be raised by 'those who have done best out of the growth', yet if you read the fine print this isn't what the PBR is doing. The 45p Income Tax rate sounds like a great idea, but it's only the spin to cover up the massive National Insurance hike which will cost lower and middle income families £5 billion.

"We need real action from the Government to change our taxation system. We believe that it's vital that the Chancellor cuts income tax for low income families by 4 pence in the pound and closes tax loopholes for the very rich such as capital gains tax and tax havens. It's the wealthy that have reaped the most benefits from the boom, why should ordinary families pay for the bust?

"The Government is borrowing billions to pay for a VAT cut of 2.5% - again this sounds good, but in reality this doesn't amount to more than £5 off a £200 TV or 60p off a £25 restaurant bill. Again it will help the wealthy as VAT is already not payable on essential such as food and children's clothes and as those that naturally spend more will be better off. Instead the Government should have spent this money investing in more capital projects that will benefit the country in the long term such as building social housing and improving public transport.

"In this time of economic crisis the Government has once more disappointed us. This PBR would was a brilliant opportunity for the Government to make a difference for struggling families, but they have failed to deliver for those families who need their support the most."

What would you like to do next?