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Post Budget briefing from the Shadow Treasury Team

  • George Osborne spent an hour telling people they are better off and have never had it so good. But working people are £1,600 a year worse off after five years of the Tories. 

  • Our National Health Service is in crisis. But the Budget said nothing about the NHS. And the Tories today confirmed plans for extreme spending cuts in the three years after the election – which will put our NHS at risk.

  • The OBR says these Budget plans will mean “a much sharper squeeze on real spending in 2016/17 and 2017/18 than anything seen over the past five years" and “a sharp acceleration in the pace of implied real cuts to day-to-day spending on public services”.

  • So the election remains a choice between a Tory plan which is failing working families and Labour’s better plan which will put working families first and save our NHS.

  • Labour’s better plan will put working families first and save our NHS:

    • Raising living standards by increasing the minimum wage to £8 an hour and 25 hours of free childcare for working parents of 3 and 4 year olds.

    • Saving and transforming our NHS with a £2.5 billion a year Time to Care Fund which will pay for 20,000 more nurses, 8,000 more GPs and a guarantee of cancer tests in one week.

    • Cutting business rates for 1.5 million small business properties and getting 200,000 new homes built a year.

    • Balancing the books in a fair way by reversing the Tory tax cut for millionaires.

    • A tax cut for 24 million working people through a lower 10p starting rate of tax.

    • And guaranteeing an apprenticeship for every school leaver who gets the basic grades and cutting tuition fees to £6,000.

Living standards

  • Working people know they are worse off compared to five years ago – they don’t want a totally out of touch Chancellor telling them they’ve never had it so good.

  • The most comprehensive figures from the ONS show that wages after inflation are down by £1,600 a year since 2010. And the IFS said this month that living standards are lower now than in 2010.

  • The measure of living standards George Osborne used today was criticised by the IFS. But even on this measure people will be worse off at the time of the election than when this government came to power.

Tax

  • The Tories give with one hand, but they have taken away much more with the other hand.

  • The IFS says tax and benefit changes since 2010 – like the big Tory VAT rise – have left families on average over £1,100 a year worse off.

  • So overall working people are much worse off because of what this Chancellor has done, while millionaires have been given a huge tax cut. 

Extreme spending cuts

  • George Osborne has shuffled around the numbers, but he is still planning extreme spending cuts after the election which go way beyond balancing the books.

  • The OBR says these plans will mean “a much sharper squeeze on real spending in 2016/17 and 2017/18 than anything seen over the past five years" and “a sharp acceleration in the pace of implied real cuts to day-to-day spending on public services”.

  • This would mean deep cuts to police, defence and social care which are almost impossible to achieve, which is why we believe the Tories will end up putting the NHS at risk and raising VAT.

Pension tax relief

  • The small measure George Osborne announced today is just 20% of the £2.9 billion package Labour announced last month,

  • The vast majority of the revenue for our package comes from two measures which George Osborne is refusing to do: reducing the amount of tax relief that people earning over £150,000 can get to 20 per cent (the same as basic rate taxpayers) and reducing the annual allowance to £30,000.

  • While the Tories are using any political wheezes they can to try to keep tuition fees at £9,000, Labour will go ahead with our plans to cut them to £6,000.

  • We’ve always said all our manifesto commitments will be fully funded and that will remain the case.

 

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