Ed Balls speaks at the Labour conference in Brighton last year. Photograph: Getty Images.
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Labour targets Osborne's 24 tax rises

The party says "It’s the same old Tory con – giving with one hand while taking away much more with the other."

One of the main messages that George Osborne will aim to send in his Budget tomorrow is that he believes in cutting taxes. Having increased the personal allowance to £10,000 (despite David Cameron arguing that the measure was unaffordable during the first 2010 leaders' debate) from £6,475 in 2010, he will attempt to claim ownership of this Lib Dem policy for the Conservatives when he announces that it will rise to at least £10,500 next year. The Chancellor will frame this as his response to the "cost-of-living crisis" (without using those words).

But as Labour has highlighted tonight, he also has a record of raising taxes. The party has issued a list of 24 levies increased by Osborne since 2010, including VAT, income tax age-related allowances ("the granny tax"), capital gains tax and inheritance tax. It calculates that taxes have risen by £24bn so far this parliament, with a further £3bn of increases to follow in 2014/15.

A party spokesman emphasised to me that Labour is "not opposed" to all of the tax rises (not least because some of them are progressive) but that it wanted to remind people that Osborne has "put taxes up significantly". The opposition wants voters to remember measures such as the VAT rise, rather than just the hike in the personal allowance, the key point being that most are worse off once all tax and benefit changes are taken into account. Here's the accompanying statement from shadow chief secretary to the Treasury Chris Leslie:

“We need a Budget that tackles the cost-of-living crisis which has left working people £1,600 a year worse off under the Tories.

“George Osborne wants to take credit for increasing the personal allowance, but hopes people forget his 24 Tory tax rises including the VAT hike. While millionaires have been given a huge tax cut the truth is millions of hard-working people have seen their taxes go up.

“It’s the same old Tory con – giving with one hand while taking away much more with the other. The VAT rise alone has cost families with children an average of £1,350 over the last three years. And the 24 Tory tax rises don't include the cuts to tax credits which have hit millions of working families.

“A Labour Budget this week would cut taxes for 24 million people on middle and lower incomes by introducing a lower 10p starting rate of tax.

“We’d get young people off benefits and into work with a compulsory jobs guarantee, freeze energy bills, expand free childcare, get more homes built and cut business rates for small firms. We’d also reverse the £3 billion tax cut for the top one per cent of earners to get the deficit down in a fairer way.”

The Tories will no doubt cite Labour's attack as further evidence that it the party is unwilling to take the "tough choices" required to reduce the deficit (forecast to be £111bn this year). But Osborne's record will also increase the demands from his own side for some relief to be offered in the Budget.

Here's the list of 24 tax rises released by Labour.

The 24 Tory Tax Rises

 

1.    VAT increased – to 20 per cent from 2011

 

2.    Income Tax age-related allowances frozen and eligibility restricted (“Granny Tax”) from 2013-14

 

3.    Income Tax higher rate threshold cut to £42,475 in 2011-12

 

4.    Higher Income Child Benefit Charge introduced 2013

 

5.    National Insurance Contributions rates, limits and thresholds increased in line with CPI rather than RPI from 2012-13

 

6.    Income Tax higher rate threshold frozen at £42,475 in 2012-13

 

7.    Insurance premium tax increased – from 2011

 

8.    Capital Gains Tax increased – to 28 per cent for higher rate taxpayers from June 2010

 

9.    New Beer Duty introduced on high strength beers from 2011

 

10. Duty on hand-rolling tobacco increased by an additional 10 per cent from 2011-12

 

11. ISA subscription limit uprated in line with CPI rather than RPI from 2012-13

 

12. National Insurance Contributions changes to contracting-out rebates from 2012-13

 

13. Capital Gains Tax annual exempt amount frozen, 2012-13

 

14. Stamp Duty Land Tax increase to 7 per cent on properties over £2 million from 2012-13

 

15. VAT increases on a range of items, including caravans, sports drinks, and listed buildings from 2012

 

16. Duty on tobacco increased by RPI + 5 per cent in 2012

 

17. Income Tax higher rate threshold cut to £41,450 in 2013-14

 

18. Capital Gains Tax annual exempt amount increased in line with CPI rather than RPI from 2013-14

 

19. Income Tax cap on reliefs introduced from 2013-14

 

20. Pension tax relief restricted from 2014-15 21.

 

21. Income Tax higher rate threshold Increase capped at 1 per cent in 2014-15 and 2015-16

 

22. Capital Gains Tax annual exempt amount increase capped at 1 per cent, 2014-15 and 2015-16

 

23. Inheritance Tax threshold frozen in 2015-16

 

24. National Insurance Contributions ending of contracting-out rebates from 2016-17

George Eaton is political editor of the New Statesman.

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Scotland's vast deficit remains an obstacle to independence

Though the country's financial position has improved, independence would still risk severe austerity. 

For the SNP, the annual Scottish public spending figures bring good and bad news. The good news, such as it is, is that Scotland's deficit fell by £1.3bn in 2016/17. The bad news is that it remains £13.3bn or 8.3 per cent of GDP – three times the UK figure of 2.4 per cent (£46.2bn) and vastly higher than the white paper's worst case scenario of £5.5bn. 

These figures, it's important to note, include Scotland's geographic share of North Sea oil and gas revenue. The "oil bonus" that the SNP once boasted of has withered since the collapse in commodity prices. Though revenue rose from £56m the previous year to £208m, this remains a fraction of the £8bn recorded in 2011/12. Total public sector revenue was £312 per person below the UK average, while expenditure was £1,437 higher. Though the SNP is playing down the figures as "a snapshot", the white paper unambiguously stated: "GERS [Government Expenditure and Revenue Scotland] is the authoritative publication on Scotland’s public finances". 

As before, Nicola Sturgeon has warned of the threat posed by Brexit to the Scottish economy. But the country's black hole means the risks of independence remain immense. As a new state, Scotland would be forced to pay a premium on its debt, resulting in an even greater fiscal gap. Were it to use the pound without permission, with no independent central bank and no lender of last resort, borrowing costs would rise still further. To offset a Greek-style crisis, Scotland would be forced to impose dramatic austerity. 

Sturgeon is undoubtedly right to warn of the risks of Brexit (particularly of the "hard" variety). But for a large number of Scots, this is merely cause to avoid the added turmoil of independence. Though eventual EU membership would benefit Scotland, its UK trade is worth four times as much as that with Europe. 

Of course, for a true nationalist, economics is irrelevant. Independence is a good in itself and sovereignty always trumps prosperity (a point on which Scottish nationalists align with English Brexiteers). But if Scotland is to ever depart the UK, the SNP will need to win over pragmatists, too. In that quest, Scotland's deficit remains a vast obstacle. 

George Eaton is political editor of the New Statesman.