Tax allowance freeze: The last straw for 5 million pensioners
You could tell from the way George Osborne described the measure as a mere matter of “simplifying the tax system”, that he just didn’t realise the backlash that freezing the age related personal tax allowances would cause. For around 5m pensioners who still pay tax; with incomes between £10,500 and £25,000 a year, this was the last straw.
Set against the Chancellor’s decision to cut the tax rate from 50% to 45% for those earning more than £150,000, older people are understandably angry that they are being asked to subsidise the super rich and pay for the mistakes of the financial sector and government. Interestingly, when I was doing the rounds of TV interviews on the day of the Budget, a producer told me that they had found it difficult to find anyone willing to come on and defend the tax allowance freeze – but eventually dug up a Guardian journalist who was willing to make the case!
It’s true that as a way of justifying the freeze, the government, right wing think tanks and certain elements of the media have been suggesting that pensioners have up till now been cushioned from the austerity measures, but in reality older people have already seen cuts to their winter fuel allowance, a reduction of their state pension increase because of the link to the lower Consumer Price Index rather than the Retail Price Index, the rationing of care services in the community, the closure of day care centres, changes to disability benefits and caps on housing support. Given that the UK has one of the least adequate state pensions in Europe and decades of pensioner poverty – this was an accident waiting to happen.
Since the Budget, the NPC has been inundated with calls and emails from older people wanting to get involved in the campaign – not only to reverse the tax freeze, but also to raise the basic state pension, provide better care and end fuel poverty. We are quite clear that this must not be an argument between the generations – but one about fairness. Those at work should benefit from higher tax allowances, but we must also make sure that those at the top pay the correct amount of tax. Not only that, but raising the retirement age will do nothing to tackle rising youth unemployment and will ultimately rob the lowest paid in our society of years of well earned retirement.
So the freeze on tax allowances gives us a unique opportunity to expose this as a government for the rich by the rich. Even lifelong Tory voters have been saying how they feel betrayed by this decision. The start of the fightback is an online petition which calls for the government to reverse the freeze. In less than a week it has already attracted over 40,000 signatures – and if we can reach 100,000, we will secure a debate in the House of Commons and a lobby of MPs to highlight all the injustices that pensioners, young people, the disabled, the unemployed and those at work are facing.