Proudly trumpeting a tax cut for the rich. (Photo: Peter Macdiarmid)
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Budget 2015: The great tax giveaway to the rich masquerading as help for the poor

Raising the personal allowance does not help who it is supposed to.

There is no policy that George Osborne will trumpet more proudly than the increase in the personal allowance: evidence of a Conservative Party simultaneously helping the poorest and rewarding work.

Of course, the policy is a Liberal Democrat one. When Nick Clegg advocated the increase in the personal allowance during a TV debate five years ago, David Cameron said: “I would love to take everyone out of their first £10,000 of income tax, Nick...We cannot afford it.” The coalition has not just lifted the tax-free personal allowance to the Lib Dems’ target, but also exceeded it. Next month, the personal allowance will rise to £10,600 – and there are heavy hints that George Chancellor will today announced a further increase in the allowance in £11,000. In an era when voters are used to broken promises, the policy is a welcome antidote: an example of politicians under-promising and over-delivering.

The only problem, of course, is it does almost nothing to help those who the policy was designed for: those struggling on low incomes. "The UK’s five million lowest-paid employees will gain nothing at all," says Adam Corlett of the Resolution Foundation. Raising the personal allowance is useless for those earning less than £10,600, but much appreciated by the highest earners. Increasing the personal allowance to £12,500 would be worth £28 a year to the poorest 20 per cent of households, but £445 a year to the richest 20 per cent. It is a massive tax cut for the rich masquerading as substantive help for the poorest in society. And increasing tax on the poor is funding it. After today’s Budget, the total cost of increasing the personal allowance this Parliament will be about £14 billion – or about the same as the cost of the hike in VAT from 17.5 to 20 per cent, a tax that is as regressive as they come.

In a saner political climate, the coalition partners would be fighting to blame the increase on the personal allowance on each other, not to claim the credit. A policy that is superficially appealing when explained on the back of a cigarette packet is best left there.

Not that other parties have learned the lesson. Labour’s policy to cut tuition fees to £6,000 amounts to an annual £2.5 billion tax cut for City high-flyers, while doing nothing to improve access to universities. The problems with University policy are not £9,000 fees that you don’t pay back if you are not successful, but the derisory provision of maintenance grants and egregious fall in part-time and mature students. But these issues, critically important as they are, did not lead to effigies of Nick Clegg being burned, so Labour have calculated that there is less political gain to be had addressing them.

Even Ukip, those supposed purveyors of home truths, are as guilty of prioritising gimmickry over good policy. While their income tax proposals are couched in the language of helping the lowest earners, they would give an extra £1,143 a year to the richest 10 per cent – and just £35 to the poorest 10 per cent.

Tim Wigmore is a contributing writer to the New Statesman and the author of Second XI: Cricket In Its Outposts.

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The government has quietly shut the door on vulnerable child refugees

The government has tried to halt the Dubs Amendment, a scheme designed to save thousands of vulnerable child refugees.  

The "Dubs Amendment" to the Immigration Bill of last year, in which the government begrudgingly promised to accept 3,000 unaccompanied child refugees from other countries in Europe, was halted this month after only 350 children had been admitted.

It has since become absolutely clear that the government is wriggling out of its obligation to accept child refugees, shutting the door on the most vulnerable. 

The amendment was named after my Labour colleague in the House of Lords. Alfred Dubs, who grew up in Britain and was saved from the hands of the German Nazi regime by Nicholas Winton, who rescued 669 children virtually single-handedly from Czechoslovakia.

The decision – announced at a time when the media was mainly concentrating on Brexit - has since been the source of much outcry both within Parliament and beyond. People across Britain are clear that the government must end these efforts to prevent refugees arriving here, and this is not who we as a society are.

Labour simply cannot accept the government’s decision, which seems to breach the spirit of the law passed with cross-party support. I have challenged Home Secretary Amber Rudd on the issue. 

The government's actions have also been criticised by Yvette Cooper, who heads Labour’s refugee task force and the Home Affairs select committee, the Archbishop of Canterbury, Justin Welby, and Scotland’s First Minister, Nicola Sturgeon, who called it “a clear dereliction of the UK’s moral and global duty”. 

Then at the recent Bafta awards, a number of those in attendance including the actor Viggo Mortensen, also wore lapel badges reading “Dubs now”.

And we have seen more than 200 high-profile public figures including Ralph Fiennes, Keira Knightley, Sir Mark Rylance, Gary Lineker, Michael Morpurgo and the band Coldplay write to Theresa May calling on her government not to close the scheme, decrying the decision as “truly shameful” and adding that “the country we know and love is better than this". 

As the letter states, it is embarrassing, that this government cannot match even Winton’s total. As his own daughter put it in her letter to the Prime Minister, “I know we can’t take in every unaccompanied child in Europe, but I suppose there was a sense when the government accepted the Dubs Amendment that they would make a bigger contribution than they have.”

We need to be clear that where safe and legal routes are blocked for these children, they are left with a terrible choice between train tracks on the one hand, and people traffickers on the other. These children have been identified as the most vulnerable in the world, including girls without parents, who are susceptible to sex traffickers.

The government’s decision is particularly disappointing in that we know that many local authorities across Britain, which assume responsibility for the children once they are admitted to the country, are willing to accept more refugees.

Yet the public outcry shows we can still force a change.

Interestingly, former Conservative minister Nicky Morgan has argued that: “Britain has always been a global, outward-facing country as well as being compassionate to those who need our help most. The Conservative party now needs to demonstrate that combination in our approach to issues such as the Dubs children.”

Let’s keep the pressure up on this vital issue. The internationally agreed principles and the Dubs Amendment were never conceived as a “one-off” - they should continue to commit to meeting their international treaty obligations and our own laws.

And on our part, Labour commits to meeting the obligations of the Dubs Amendment. We will restore the scheme and accept some of the most vulnerable children in the world.

 

Diane Abbott is Labour MP for Hackney North and Stoke Newington, and shadow home secretary. She was previously shadow secretary for health.