YESTERDAY’S report from the Resolution Foundation exposes the duplicity of Theresa May and Phillip Hammond in spades.
The Prime Minister and her Chancellor claim that the Tory Party is now the “party of working people,” dedicated to helping the “jams” (those “just about managing” to get by). Yet their Budget changes coming into effect this week will leave the better off even better off, while the poorer half of the population takes the biggest hit.
According to the Resolution Foundation’s calculations, four-fifths of the £2 billion gained from rises in income tax thresholds will go to the richer half of society, while the poorest third will suffer two-thirds of the £1bn lost through tax credit and benefit caps and freezes.
Predictably, apologists for this widening inequality will point out that these figures take no account of the record increase in the national minimum wage.
Unfortunately for them, a previous report from the Resolution Foundation puts that into context as well.
While the jump in the top rate from £7.20 an hour to £7.50 is welcome, it neither constitutes the “national living wage” trumpeted by its author, ex-chancellor George Osborne, nor does it offset Budget cuts for many low-paid workers of as much as £2,000 this year.
As the Low Pay Commission confirms, the vast majority of workers — around 85 per cent — are still earning less in real terms than they were 10 years ago, on the eve of the banking crash.
With the Tories hoping to freeze, cap and cut benefits for the next four years as prices, fares, rents and rates leap ahead, most workers can expect deeper cuts in their living standards.
Since 2007, on the other hand, the British state has put up £1.3 trillion to bail out the bankers, shareholders and depositors.
Successive Labour and Tory-led governments have cut corporation tax rates on company profits, losing the Treasury around £40bn.