Tuesday 7 July 2015

"The £55 Billion Govt. Heist you did not Hear About"

  1. Budget this week with anticipated £12 billion of welfare under the axe
  2. 2010 emergency budget had tiny condition changing the benefit calculation method
  3. The ‘tweak’ saved the government £15 billion over last parliament
  4. Over the course of this parliament another £40 billion will be taken from the poor and vulnerable
No doubt in this weeks budget all eyes will be firmly fixed on the headline grabbing details of how it will cut its welfare budget by something in the order of £12n. This equates to around 10 percent of the annual invoice for benefits.
However, there aren’t many people, certainly not the mainstream press who have ‘cottoned on’ to the massive fraud that this government has already implemented that will reduce payments to those already dependant upon state assistance to get by. It effectively equates to the biggest assault on state support of the most needy and vulnerable in our society.
After the emergency budget a few weeks after the 2010 general election was a small section in its 100 or so pages stating that future benefits, tax credits and public sector pensions for retired emergency workers, civil servants, council employees and NHS staff would rise in line with a different measure of inflation: the consumer price index (CPI). Previously, the default increase was the retail price index, RPI – which has historically averaged about 1% higher.
Treasury documents have already admitted that this change of calculation would save them £15bn over the life of the last parliament.
In 2011, the Treasury extended this little scam to thresholds for income tax, national insurance contributions and inheritance tax.
Whilst there are no official calculations of the combined impact of these rather scandalous changes, the Office for Budget Responsibility’s most up-to-date guess is that the inflation switch will save the Treasury more than £40bn over this parliament.
Of course, the purpose, one should not forget, is that all your essential services such as electricity, gas, water, the local bus and train all continue to rise in tune with the higher calculation of RPI. So just to get that right, the government collects taxes based upon the higher RPI and pays out on the lower CPI – how convenient.
The OBR’s has, to be fair, tried to issue its own warning that unless the policy is reversed after 2020 “the value of the benefits would fall dramatically, relative to the living standards of the rest of the population”.
Then of course, there is the budget this week. There’s £12 billion to add to what has already been eroded and will continue to so for decades to come.

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