Monday 6th July

For several years now we have had selected and selective leaks a few days before a budget.  The reason is to take the sting out of controversial measures or to soften us up ahead of the big day, or sometimes just as window dressing.  The Conservatives won the last election, or rather fear of the SNP lost it for Labour, but anyway they are now no longer in a Coalition and can now bring in unrestrained Tory policies unhindered by those wretched LibDems.

So far, two measure have been trailed.  One was fairly well advertised during the election and one was not.  The first is raising the inheritance threshold to one million pounds.  In a way this seems perfectly reasonable; many people are now living in homes (especially in London) that are worth more than that.  But it is hardly a fair tax-cut, as the vast majority of people will see no change – it is only the fairly well-off who will benefit.

The other measure is far more sinister.  He is going to announce that people living in Social Housing who earn more than £30,000 (or £40,000 in London) will now have to pay the market rent, rather than as he insists, receiving a subsidy.  Now this is a really contentious issue.  Many people qualified for Social Housing, either Council or Housing Association, many years ago when they were not earning such ‘high’ salaries.  For whatever reason they have succeeded and are now earning more.  And yes, they might well have to pay a higher rent in the private sector.  So what?  That is because rapacious landlords are forcing private rents higher and higher.  These people are now being punished for ‘getting on’ and bettering themselves.  Many tenants of Social Housing have lived there for years, built up friends and neighbours and incidentally may well have improved their properties.  Why should they be punished by having their rents increased, or forced to move.  And the private sector rents keep rising, especially in London, so their rent will presumably keep rising now too.  The policy is supposed to force these people into the private sector so that more deserving people can be housed, which sounds laudable, but any extra rent will go to the Chancellor and not to councils so that they could provide more housing.  Now, this will cost many council tenants around £70 extra a week.  This is absolutely punitive, and it will be ordinary people who will have to pay this, in effect tax, simply because their income has risen.  And strangely enough this policy was NOT mentioned during the election at all.

And I bet there will be other even nastier rabbits in the Chancellor’s hat.  We will now begin to see what a Tory Government really means, one tax cut for the rich and another tax hike for the poor.