The Liberal-Tories could not have been much clearer in where their loyalties lie. On the one hand they have looked after the interests of the Upper Middle Classes, and Small Capitalists with their cut in the 50p Tax Rate, on the other they have added to their previous attacks on the vast majority of society with additional attacks on Pensioners.
Clegg, Cable, Alexander, Cameron and Osborne claim that their budget has looked after the poor by taxing the rich. It is nonsense. First, of all the really rich, those who own the vast majority of the means of production, those who measure their wealth in billions, not just a few million, will have gained from this Budget, because the cuts in Corporation Tax, will push up the share prices of all those companies these billionaries own collectively. But, secondly the Taxes the Liberal-Tories claim bring in more tax than the 50p rate, do no such thing.
If someone buys a £2 million house the Stamp Duty they pay will now have gone up, which means they will have to pay an extra £100,000. However, they will only pay this once, when they buy the house. But, many of those liable for the 50p rate will save £40,000 from the cut in the rate. They will save that every year. So, someone only needs to stay in their £2 million house for a couple of years, and they will have got their additional Duty back!
But, worse is the attack on Pensioners. What has surprised me, though has been the response of the IFS after the Budget on this matter. The Liberal-Tories claim that they have not taken any actual cash from pensioners. But, no one is ever bothered about whether nominal losses have been made. Everyone is concerned about whether their actual incomes have gone up or down in real terms. And, there is no doubt that, as a result of these changes, Pensioners incomes will have gone down in real terms.
Pensioners get an additional allowance on top of the Personal Allowance that everyone gets. This year, the Liberal-Tories have frozen the Pensioners Allowance. That means that, as the pension rises, to cover the rise in inflation, the allowance does not rise with it, so a part of the rise is taken away in additional tax. The Liberal-Tories have tried to get around this by claiming that Pensioners have had the biggest Pension rise for years.
Of course, what the Liberal-Tories do not point out is that the reason there has been the biggest paper rise in Pensions for years, is because of the failure of their economic policy elsewhere. The Liberal-Tories have presided over a huge rise in inflation over the last few years, because along with the Bank Of England, they have pursued a policy of low interest rates fuelled by massive money printing. That has led to a collapse in the value of the Pound, which has pushed up Import prices. On top of that, the other Liberal-Tory policies such as increasing VAT, pushing up Tuition Fees, and other charges has also meant that everyone has faced rapidly rising prices.
The only reason Pensions have risen is to try to keep up with this massive increase in inflation. But, it has not even managed that, because the Liberal-Tories have linked Pensions to the CPI Rate of Inflation, which is more than 1% point (around 25%) lower than Retail Price Inflation, and the inflation that most ordinary people face, particularly Pensioners is even higher than that. Moreover, as they have done for the last four years, the Bank of England says that inflation is about to fall. Over the last couple of months, for technical reasons, as previous large rises drop out of the index, it has fallen slightly. But, last month even CPI did not fall as much as had been expected. On top of that, international markets are aware that a military strike on Iran is going to happen in the next few months. That is why Cameron and Obama agreed to release oil from the Strategic Petroleum Reserves, an agreement, which seems to have been leaked by mistake, because the announcement was quickly retrcted. But, already Oil prices are hitting new highs, pushing petrol prices in Britain to new records, which feeds through into all other costs. That has been made worse by the falling value of the Pound, which despite all the woes of the Eurozone, has remained relatively weak, even against the Euro. On top of that, the UN's Food and Agricultural Organisation, has reported that in the last few months, global food prices are again rising rapidly, as millions of new workers in China, India, other parts of Asia, Latin America, and Africa, begin to have the money to spend to improve their diets. The massive money printing done in the US, UK, and now in the EU, is finding its way into Bank Deposits of people in these other economies, and from their is feeding these higher higher global prices. That is why even whilst the economy stagnates in the UK, inflation will continue at high levels, with a particularly bad effect on Pensioners, and those on low fixed incomes.
But, the Liberal-Tory assertions, and the arguments of the IFS are worse than that. It simply is not true to say that these are the first attacks on pensioners, or that they have got off light until now. The reality is that it is pensioners, particularly poor pensioners, who will be some of the worst hit by the Liberal-Tory Cuts, which are the other side of their Tax Cuts for the rich. It is pensioners who will be the biggest losers from attacks on Social Services, and from Healthcare. It is pensioners who are frequent users of the Libraries and Leisure Centres that are being closed down as part of the Liberal-Tory Cuts - and Green Party Cuts in several parts of the country.
And, it doesn't end there. The other side of those low interest rates to bail-out the banks, and which have fuelled inflation, is the fact that Pensioners who rely on savings to top up their income are finding that they can get no interest worth having on their savings. In the meantime, that same inflation means not only that Pensions shrink, but any savings shrink too.
Its true, the Liberal-Tories have mugged our grannies, and their Cuts policies amount to systematic vandalism and looting. The difference with last Summer's riots, is that the Liberal-Tories can do it with trhe backing of the law, and of the Capitalist State.