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Labour’s
Tax Con On
6 April, the rise in income tax that Gordon Brown announced in his 2007
Budget came into force. This
abolition on the 10 pence tax rate will disproportionately hit hard
working families on low incomes and younger people at the start of their
careers who are already faced with spiraling living costs and an
impossible property ladder. Many
of the key people in the local community – waiters, shop assistants,
cleaners – will see their tax rate effectively double overnight. The
Treasury has confirmed that 5.3 million families will lose out in total
– even after the changes to tax credits are taken into account. One in every five families will be worse off – by anything
up to £464. Part time female
workers, often desperately trying to balance work and family life, will be
the hardest hit. In Hove & Portslade they earn an average of £10,500 (Source: National Office of Statistics -
2007). Mike
Weatherley, Conservative Prospective MP for Hove & Portslade commented: “This
is a total con by the Labour Government.
They claim that changes to child benefit and tax credits will
compensate people but they don’t even begin to.
We live in a prime tourist destination with hotel and leisure
industries that are vital to the local economy. Many of Brighton and
Hove’s key workers will be an average of £200 a year worse off.
What is shameful is that these key workers will not see any
improvements in public services as a result – they will simply pay more
to support underperforming government departments.” Hove
MP Celia Barlow’s tactic of trying to convince some voters
that she is against the budget changes whilst saying the opposite to other
voters in highly irregular – and typical of Brown’s Labour government that
continues to tax us at every opportunity.
Mike Weatherley commentated: “Celia’s crocodile
tears are too little too late. She
voted for the abolition of the 10 pence rate when it was first announced
last year. On her web site
she says “I was pleased that this Budget is great news for pensioners,
families and children in our area” and ”I support this responsible
Budget”. No mention at all to the abolition of the 10 pence rate.
Typically Ms Barlow has followed the Party line. Ms
Barlow also recently voted in favour of Post Office closures at
Westminster whilst proclaiming to her constituents that she was against
these closures in the press – this
seems highly hypocritical”. Conservatives
have specific proposals to help hard-working families. We will oppose
Labour’s plans to double the 10p tax rate; give people power through
local referendums to stop large council tax rises; and raise the threshold
for inheritance tax, taking 98 per cent of family homes out of it
altogether. Mike explains: With
the economy in such a mess, it would be irresponsible of the Conservatives
to make rash and uncosted promises. We
will not do that. Our
proposals for inheritance tax and stamp duty will be funded by a £25,000
levy on those who register for non-domicile status.
The number of individuals registered as non doms in 2004-05 was
112,000. This was a 72% increase on the 65,000 three years previously in
2001-02 (or a 20% annual growth rate over three years), but only a 7%
increase on the 105,000 in the previous year 2003-04 (Hansard 30 April
2007, Column 1383W; Reviewing the residence and domicile rules as they
affect the taxation of individuals: a background paper, HM Treasury, April
2003; Hansard, 16 July 2007, Column 94).
To calculate the most conservative estimate of the number of
individuals likely to be registered as non-domiciled in the tax year
2008-09, we extend the 7% growth rate above for four years, which gives a
total of 150,000. Levy would simply be matched by an equivalent reduction
in their US tax bill. Extending
the more likely 20% annual growth rate over the three years from 2001-02
to 2004-05 creates a higher estimate of about 230,000. If all 150,000 pay a full rate of £25,000 then the Levy
would raise £3.75 billion a year. Given that the average declared UK
income of non-domiciled individuals is now in excess of £100,000, the
vast majority will pay the Levy at the full rate. Because the Levy is set
at around £25,000 we also expect that very few individuals will choose to
become resident outside of the UK in order to avoid it.
Setting the Levy at around £25,000 strikes the right balance
between ensuring that all UK residents pay their fair share towards our
public services and maintaining the competitiveness of the UK as a
location for high net worth individuals. The Levy will also remove a big
question mark hanging over the City by safeguarding the concept of
domicile. Investors and high net worth individuals would be able to locate
in the UK without any fear that their non domicile status would be
abolished. Many of those
registered as non-domiciled are US citizens who are taxed in the US on
their worldwide income. On
her website Celia Barlow claims that the 'Tories' have made over £10bn
of tax pledges, and would put Britain’s economic success and stability
at risk. Responding
to this Mike Weatherley said: “It
is a bit rich for Celia to say this.
Labour has taken us in the wrong direction and wasted tax revenues.
After the Northern Rock fiasco national debt stands at £537bn and
Gordon Brown has broken his own fiscal rule – that National Debt should
not exceed 40% of GDP (Office for National Statistics says the
reclassification of Northern Rock as a Public Enterprise will put National
Debt at 44.4% of GDP). Only Hungary, Pakistan and Egypt are the only three
main countries with higher debts than Britain. On
Monday 28 April the Government’s budget is due to be voted on in the
House of Commons. Mike Weatherley said: “I
welcome Celia Barlow’s reported comments criticising some of the Budget
measures. However, the fact
remains that she has already voted in favour of the 10p tax band abolition
last year. Why didn’t she
have the ‘courage’ 12 months ago – before public pressure - to voice
concerns? And when the crunch comes how will she vote? On Post Office
closures she refused to support the Conservative motion to suspend
closures. Come on Celia, do the decent thing, start voting as you speak
and reverse the damage you did last year and vote against this inept and
dithering Labour government and support the Conservatives’
amendments’.
22 April 2008
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