Latest news with #workingpeople
The Independent
3 days ago
- Business
- The Independent
Revealed: How Farage's £80bn tax cuts would benefit the richest most
Nigel Farage 's claim Reform UK is the 'party of workers' has been called into question as figures show his plans to slash taxes would benefit the richest most. The Reform leader on Tuesday outlined up to £80bn of welfare and tax handouts - without saying how he would fund them - in a bid to entice Labour voters, declaring 'Reform really are now the party of working people'. But economists have warned that the billions of pounds worth of unfunded pledges would cause economic chaos and say Mr Farage's plans would benefit top earners far more than those on the lowest incomes. The centrepiece of Mr Farage's tax plans was a pledge to lift the tax-free income allowance from £12,500 to £20,000, costing between £50bn and £80bn per year. Stuart Adam, a senior economist at the influential Institute for Fiscal Studies (IFS), said 'the biggest beneficiaries are the top 10 per cent'. 'It mainly benefits the better off,' he told The Independent. He said: 'We are talking about the upper middle [class] being the biggest beneficiaries as a percentage of income, and the best off being the biggest beneficiaries in cash terms.' Mr Adam said around a third of adults already earn too little to pay income tax, while the changes would also penalise those on universal credit, as any uplift in their take-home pay would be clawed back in lower welfare payments. He said a better way of targeting specifically 'working people' with the tax cut would be to target employee national insurance, which is only paid by those in work. Calculations for The Independent by the research institute Policy Engine reveal that Mr Farage's plans to hike the tax-free income allowance would boost the incomes of the bottom tenth of earners by 1.3 per cent. By contrast, the calculations show that the top 10 per cent of earners would see their incomes boosted by 4.2 per cent under Reform's plans. Max Mosley, senior economist at the New Economics Foundation, told The Independent that Reform's attempts to appear progressive on issues such as winter fuel payments and the removal of the two-child benefit cap are 'a distraction'. He said: 'It comes as part of a wider set of reforms which include regressive tax changes and cuts to public services working people rely on. When we put all their policies together it is the wealthiest households that benefit the most, and poorest who will see the smallest difference in their standard of living. 'Being a 'party of workers' does not mean giving pennies to the poorest and pounds to the richest.' Reform UK said its plans would 'undoubtedly help working people and benefit the lowest earners'. A spokesman said: 'Our plans to scrap the two-child benefit cap will lift 350,000 children out of poverty, while raising the tax-free salary allowance to £20,000 will save every worker almost £1,500 a year, putting an extra £30 per week back in people's pockets. 'This is in stark contrast to this government, who hiked national insurance for working people and stripped winter fuel payments from over 10 million pensioners.' But it came after an extraordinary speech on Thursday, which showed the severity of the threat Sir Keir believes Labour faces from Reform, in which he directly attacked Mr Farage's tax plans. The prime minister said: 'The question you have to ask about Nigel Farage is, can you trust him? 'Can you trust him with your future? Could you trust him with your jobs? Could you trust him with your mortgages? Your pensions? Your bills? 'He gave the answer on Tuesday - a resounding no. He set out economic plans that contain billions upon billions of completely unfunded spending, precisely the sort of irresponsible splurge that sent your mortgage costs, your bills, and the cost of living through the roof. 'It's Liz Truss all over again.' Sir Keir said Labour was elected to clean up the mess left by Ms Truss, and that 'we are once again fighting the same fantasy, this time from Farage'. And Labour MPs lashed out at Mr Farage over the plans. Dover and Deal MP Mike Tapp, one of Mr Farage's most prominent critics in the Commons, said: 'Nigel Farage is a rich bloke who is trying to trick the public into thinking he is a working class hero. 'His policies speak the truth, in it for himself and his rich mates. Reform have voted against all of Labour's policies standing up for working people…don't be fooled.' Bury North MP James Frith added: 'Farage's plans would prioritise those at the top and be a hammer-blow for family finances through a return to the chaos of Liz Truss. Only the Labour Government can be trusted to drive growth in every part of our country to give working people the security they deserve and our country the renewal it needs."
Daily Mail
5 days ago
- Business
- Daily Mail
ANDREW NEIL: Rachel Reeves has condemned us to a doom loop of economic despair. Brace yourself for a £30BILLION tax raid
Mark my words: there will be tax rises in the autumn. Big ones. Perhaps not quite as big as the £40billion in extra taxes Chancellor Rachel Reeves slapped on us in her first Budget last October, after promising no major tax rises to get elected. But pretty hefty nonetheless. Big enough to hurt most folks, even the 'working people' Keir Starmer is always going on about but is no more able to define than he's been able to tell us what constitutes a 'woman' (at least not until the Supreme Court helped him out).
The Independent
17-05-2025
- Business
- The Independent
Starmer gives new hope for EU youth mobility scheme ahead of Brexit reset: ‘It is not freedom of movement'
Sir Keir Starmer has defended his planned youth mobility scheme with the EU, insisting it does not cross Labour's red line on freedom of movement and will be good for 'working people'. Ahead of its announcement at the UK-EU summit in London on Monday, he said a youth mobility deal is 'not freedom of movement'. The deal, a key part of the prime minister's post-Brexit reset of relations with Brussels, will be a 'really significant moment', Sir Keir added. Reports also suggest a deal on British access to a major 150 billion euro EU defence fund could be on the table but arguments over fishing rights and a youth mobility scheme may provide stumbling blocks to an agreement. Rachel Reeves said the EU summit will not be a 'one-off' and suggested it would pave the way for future talks. Sir Keir has repeatedly declined to give a 'running commentary' on the talks but said on Friday he was 'positive going into Monday'. He spoke after meeting European Commission president Ursula von der Leyen in Albania at the European Political Community Summit. Kaja Kallas, the EU's high representative for foreign affairs, had earlier said work was progressing on a defence deal, but that 'we're not there yet.' Sir Keir said a stronger trading relationship with the EU would be 'measured in the pockets of working people'. 'People will be better off because of this deal,' the Prime Minister told The Times. Amid reports that discussions for an agreement with the EU to allow young people to live in the UK for up to two years, Sir Keir rejected claims that would be a backdoor to freedom of movement. He said: 'We have a red line in our manifesto about freedom of movement. We've been really clear about that but youth mobility is not freedom of movement.' He pointed to similar arrangements Britain has with countries including Australia, under which the number allowed to access the scheme is capped. He added: 'Nobody wants to relitigate the last nine years and I think [the things] they will be most concerned about — am I going to be better off, is this going to help my living standards, is it going to make sure my job's preserved, are there jobs in the future, is my community going to benefit from that? — that'll be test number one.' A youth mobility scheme was proposed by the EU but initially rejected by Labour. Mayor of London Sir Sadiq Khan said the Government is giving 'mixed messages' and that he wanted to hear it 'speaking in one voice and say they would like a youth mobility scheme'. Such a scheme would give young British people the chance to work in the EU but also 'put rocket boosters up businesses in London' where there are gaps in hospitality, creative industries, health and social care, and other sectors, he told the BBC's Newsnight programme. Ms Reeves meanwhile suggested any deals unveiled on Monday would only mark the beginning of closer ties with the bloc. 'I am ambitious for our future. This isn't a one-off. There will be things that we achieve, some concrete outcomes on Monday, but there will also be a step towards where we want to go next between our countries,' the Chancellor told The Guardian. 'And I see that as a journey, not that what happens on Monday is the end; there will be future areas where we can do more.'
Yahoo
08-05-2025
- Business
- Yahoo
If Labour won't U-turn on its winter fuel raid, it must do more to support pensioners
Last summer, the Labour government's decision to means-test the winter fuel allowance caused quite an uproar. Although winter has passed, the outcry hasn't died down – as the local election results have shown, it's been neither forgotten nor forgiven. While the poorest pensioners still receive the allowance, many who narrowly missed out have undoubtedly suffered financially by up to £300. On the other hand, wealthier pensioners may feel they did not need the support. This situation underscores the importance of prioritising government spending, as every pound spent in one area leaves a pound less for other essential services. In March, the Spring Statement focused heavily on growth and on how the Government is prioritising supporting working people. By contrast, references to supporting pensioners were notable by their absence. This omission raises questions. Are pensioners no longer seen as contributors to economic growth once they retire? Or did the Government intend 'working people' to refer to those of working age and beyond who rely on earning through work, rather than investments and inheritances? The voting public is increasingly skewed towards older generations, making the 'grey vote' a force to be reckoned with. Historically, this early in a parliamentary term, governments can get away with making unpopular decisions without fear of election reprisals. But then came the recent rise of Reform. I'm in favour of any government seeking fairness across all generations, creating tailored opportunities and providing safety nets for all. So how is the Government doing for pensioners? Beyond the winter fuel allowance, its stance on supporting pensioners includes a commitment to the state pension triple lock until the next election. The year-on-year increase of the maximum of inflation, wage growth or 2.5pc means state pensioners receiving higher increases than average earners if inflation outpaces wage growth. That has raised question over predictability and long-term financial sustainability which is why we favour a modified formula that pays above inflation only if wage growth exceeds inflation over a three-year period. Remember, it's today's workers who finance current state pensions. A more immediate concern is that the full new state pension at £11,973 is not far below the personal allowance, currently frozen at £12,570. In two to three years, pensioners relying solely on the state pension may find themselves liable for income tax. Initially, the amount will be minimal, and the Government could ease concerns by agreeing to waive it – the cost of collection could otherwise exceed the revenue generated. However, this issue will grow unless addressed. Social care funding is another critical issue. The Government cancelled the proposed deal, who would have capped personal contributions from this autumn, at the same time as means-testing the winter fuel allowance. Despite its potentially far greater impact, that decision was met with barely a public whimper, compared to the outcry over winter fuel. All political parties should avoid making uncosted and unaffordable promises. Unfortunately, that's not always how politics operates. If as has been indicated, there will be no U-turn on the winter fuel allowance, I'd ask the Government to look intergenerationally across policy measures. Any government must support pensioners if they want pensioners to support them back. Steven Cameron is pensions director at Aegon UK. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Telegraph
08-05-2025
- Business
- Telegraph
If Labour won't reverse its winter fuel raid, it must do more to support pensioners
Last summer, the Government's decision to means-test the winter fuel allowance caused quite an uproar. Although winter has passed, the outcry hasn't died down – as the local election results have shown, it's been neither forgotten nor forgiven. While the poorest pensioners still receive the allowance, many who narrowly missed out have undoubtedly suffered financially by up to £300. On the other hand, wealthier pensioners may feel they did not need the support. This situation underscores the importance of prioritising government spending, as every pound spent in one area leaves a pound less for other essential services. In March, the Spring Statement focused heavily on growth and on how the Government is prioritising supporting working people. By contrast, references to supporting pensioners were notable by their absence. This omission raises questions. Are pensioners no longer seen as contributors to economic growth once they retire? Or did the Government intend 'working people' to refer to those of working age and beyond who rely on earning through work, rather than investments and inheritances? The voting public is increasingly skewed towards older generations, making the 'grey vote' a force to be reckoned with. Historically, this early in a parliamentary term, governments can get away with making unpopular decisions without fear of election reprisals. But then came the recent rise of Reform. I'm in favour of any government seeking fairness across all generations, creating tailored opportunities and providing safety nets for all. So how is the Government doing this for pensioners? Beyond the winter fuel allowance, its stance on supporting pensioners includes a commitment to the state pension triple lock until the next election. The year-on-year increase of the maximum of inflation, wage growth or 2.5pc means state pensioners receiving higher increases than average earners if inflation outpaces wage growth. That has raised questions over predictability and long-term financial sustainability which is why we favour a modified formula that pays above inflation only if wage growth exceeds inflation over a three-year period. Remember, it's today's workers who finance current state pensions. A more immediate concern is that the full new state pension at £11,973 is not far below the personal allowance, currently frozen at £12,570. In two to three years, pensioners relying solely on the state pension may find themselves liable for income tax. Initially, the amount will be minimal, and the Government could ease concerns by agreeing to waive it – the cost of collection could otherwise exceed the revenue generated. However, this issue will grow unless addressed. Social care funding is another critical issue. The Government cancelled the proposed deal, which would have capped personal contributions from this autumn, at the same time as means-testing the winter fuel allowance. Despite its potentially far greater impact, that decision was met with barely a public whimper, compared to the outcry over winter fuel. All political parties should avoid making uncosted and unaffordable promises. Unfortunately, that's not always how politics operates. If as has been indicated, there will be no U-turn on the winter fuel allowance, I'd ask the Government to look intergenerationally across policy measures. Any government must support pensioners if they want pensioners to support them back.
