Monday, April 04, 2011

The Tories' inconsistent approach to universal benefits #sp11

Just a quick comment on the Tory manifesto, launched this morning before I head off to Dunfermline for a hot date with some envelopes. I lead such a glamorous life.........

There is a huge inconsistency between their policy to reintroduce prescription charges at £5 an item, saying that free prescriptions take too much money out of the NHS, and their plan to give a £200 Council Tax cut to pensioner households.

I watched the other week as Scottish Conservative Deputy Leader Murdo Fraser told the Scotland on Sunday health debate that all the speakers as MSPs could easily afford to pay the charge and so didn't need free prescriptions.

How, then, can the Tories justify giving a £200 Council Tax cut to pensioner households regardless of income. They are giving wealthy pensioners a boost to their income that frankly they don't need. The Scottish Liberal Democrat policy is much better at targeting the cut at where it's most needed - under our plans, no pensioner with an income of less than £10,000 would pay any Council Tax at all, giving them up to £400 back.

I am no fan of the Winter Fuel Allowance going to wealthy pensioners either. And I have an interest in this one - my husband will get it this year and we absolutely don't need it. It angers me that we will get it and a family with a disabled child won't. That, unfortunately, is one of the things that the UK Coalition has not sorted out because Cameron promised pensioners their WFA would be left alone.

If I were a cynic, I might be inclined to think that those who would suffer most from having to pay a reintroduced prescription charge of £5 are as a whole less likely to vote Tory than  wealthy pensioners.

I can also think of a few people who might benefit from this Tory tax cut for the better off, certainly by the time of the next Holyrood election in 2016. Let me see, there's Annabel Goldie, Ted Brocklebank, Bill Aitken, Nanette Milne, Alex Fergusson, Mary Scanlon, Jamie McGrigor and John Scott. You've got to admit that these past or present Tory Holyrood figures are bound to be amongst the richest pensioners in the country.

When the Liberal Democrats rearrange the tax system, we do it on the basis of fairness and need. That's why the rich had a 10% hike in their Capital Gains Tax, and those on the lowest incomes are now getting a £200 tax cut this year. The Tories on the other hand are all over the place on these universal benefits. Common sense? Not so much.


tris said...

Unfortunately, the cost of means testing is often greater than the money saved by introducing selective benefits...The cost of staffing and office/offices for the form sending, checking for liars, and applying the benefit.

Essentially I'm in agreement with you that it is a nonsense that under the Tory's plans, whilst the Queen would have a reduction in the council tax for Balmoral, there are people stacking shelves part time who would still pay the full whack.

I'd propose that any benefits like that could either be returned to the government (whichever one) by the recipient, if they felt they didn't need the extra, or given to an appropriate charity.

Rather like the two Dundee MPs who received pay rises of £1000 last year when everyone else was taking reductions. One gave the money back to the Westminster authorities and the other gave the money to local charity.

Caron said...

Thing is, Tris, people wouldn't necessarily return them if they didn't need it - and they would of course be under no obligation to do so. It's better to try to find some way not to give it to them in the first place.

For us, the £10,000 limit would take in an extra 20,000 pensioners. Those on Pension Credit already get exemption from CT. It's not going to be too onerous to local authorities to process extra claims from people between the pension credit threshold and £10,000, and the Council themselves won't lose out because the Scottish Government would make up the difference of any Council Tax lost.

cynicalHighlander said...

One LibDem seeing sense.

AndrewM said...

You make some very good points about targeting benefits to those who need them the most. However, what do you then think about the Coalition's plans for raising the personal allowance in April 2012? Unlike the April 2011 increase where the higher rate threshold was reduced so that higher rate taxpayers didn't get a tax cut, why is the same not being done in April 2012?

I'm all for taking more low-earners out of the income tax system and also giving a tax cut to basic-rate taxpayers, but given the current financial situation I don't see why higher-rate taxpayers should also get a tax cut.


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