Middle Britain hit yet again

THE prospect of life getting a lot worse before it gets better does not sound like an election-winner. So the decision by George Osborne to force 41,000 people on middle incomes to start paying a higher rate of tax from Wednesday, just weeks before a pivotal set of local elections, is a bold one.
By The Newsroom
Published 5th Apr 2011, 01:00 BST

The coalition will, inevitably, get punished at the ballot box but Ministers are entitled to argue that they had little choice. It is a depressing sign of the straitened times in which we live.

With the coalition’s decision to lower the threshold at which people start paying income tax, and families’ loss of more than £1,000 of child payments from 2013, Britain’s austerity measures move into a new phase. Jobs have been cut in the private sector, at state-owned banks and in the public sector and now the pay packets of people from across society will be hit en masse. Coupled with the inexorable rise of food and petrol prices, it will be a grim year for those people who still have jobs.

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The changes will trigger a wave of discontent and, as such, present an opportunity for Ed Miliband. The Doncaster North MP has struggled to find his voice since becoming Labour leader, but his championing of the “squeezed middle” should be vindicated, provided it is accompanied by an acceptance of why such savings are needed.

It is entirely fair to ask questions about the way the coalition is cutting the deficit, however, particularly when Yorkshire and the North are being hit so hard, but the bottom line is that Britain is in the red and it cannot stay there for ever. The interest payments alone on the national debt have reached an estimated £40bn a year and this is not just unsustainable, but absurd.

If the coalition is to survive its full term, then it must ensure those with the broadest shoulders really do bear the greatest burden, as David Cameron has frequently claimed would be the case. Middle class voters will not tolerate being taxed to the hilt indefinitely when corporation tax has been lowered and the Chancellor has failed to get to grips with the excesses of the state-owned banks. Life will get a lot worse for Yorkshire people this year and the incomes of middle earners are not a bottomless pit for filling Treasury coffers. In some circumstances, a tax rise can be fair, but it does not have to be permanent.

Related topics:BritainJobsYorkshireEd MilibandLabour