Now here's interesting ....
A lot of fuss has been made about the "granny tax" that the government has "imposed" in this budget. The Mirror went as far as to describe it as a mugging. (See here if you can bring yourself to visit their website.)
I certainly have issues with some aspects of the budget, but this, as it happens, is not one of them. The Financial Times has pointed out (free registration required) how relatively well-off the retired population are, certainly compared to the younger generation, and the Institute of Fiscal Studies points out that this "mugging" represents a loss of income of about one quarter of one percent in 2014. 50% of pensioners (the poor grannies that you have in mind, perhaps) don't actually pay income tax at all. The new process for increasing state pension guarantees that its value will increase at least as fast as inflation in future. And the "perfidious coalition partners", the Liberals, are seeking to secure a standard basic pension of £140 per person.
Furthermore, the way in which the government is approaching this - freezing the allowance available to pensioners whilst increasing the general allowance - can hardly be considered that painful; it's not as though extra money is being taken away. The previous Labour government froze the allowance for everybody - by this token, it could be accused of mugging the whole population. Of course, this doesn't make for quite the dramatic imagery evoked by talking about mugging grannies ....
For a more balanced perspective, see the BBC's Nick Robinson's comment here.
Thursday, March 22, 2012
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