The budget - the facts on pensions and tax

There has been much criticism of this week’s budget, especially from the Labour opposition and the press, particularly on the issue of the freezing pensioner personal allowances.

I think it is important to look at these changes in full and to take into account other measures announced by the Government in relation to pensioners.

1. We must remember that the freezing of the personal allowance has no impact on 5 million of the poorest pensioners. Of the 4.4 million pensioners above that there is absolutely no loss in cash terms to pensioners.

2. Whereas there is an average ‘real terms’ (taking into account inflation) loss of £1.60 per week as a result of the freezing, the Government has just announced that the pension will rise by £5.30 per week. This is the biggest ever rise in the state pension and comes at a time when inflation is continuing to fall. This means spending on the basic state pension is over £1.2bn higher in 12/13 than if the Government had stuck to Labour's uprating policy – equating to £120 extra a year on a full basic state pension.

3. We must also take into account that for the Government has now frozen Council Tax in many areas across the country, this has been frozen in the East Riding of Yorkshire for two years running. This tax almost doubled under Labour but our freezes mean that for the past two years Council Tax has effectively been cut in real terms. Pensioners in particular benefit from this as they are generally on fixed incomes.

4. It must also be remembered that all pensioner benefits have been protected. Winter Fuel allowance, free TV licences, bus passes etc. The Government has of course raised cold weather payments which were recently paid to local residents in our area.

5. The poorest pensioners also benefit from the triple lock in 2012/13 through the decision to uprate the Pension Credit Guarantee Credit to match the cash rise in the basic state pension; and the Warm Homes Discount means more than 600,000 of the most vulnerable pensioners will also benefit from a £120 discount to their fuel bills.

6. In terms of other pressures such as utility bills and fuel bills the Government has acted. Fuel is now between 25-30p per gallon cheaper than it would have been had the previous Government’s plans continued. The Government cut fuel duty by 4.4p per gallon when the coalition we came in to power and we scrapped Labour’s fuel duty escalator and we also delayed there inflation rise. Despite protestations by many local MPs the inflation rise will go ahead in August but there will be no above inflation rises until oil drops to below £45 per barrel. The recent rises in fuel are because of international demand and uncertainties, issues the Government has little control over. In terms of heating bills the Government made controversial changes to feed-in tariffs to avoid rises been put on to domestic bills.

There have been a number of independent assessments of the budget. One which is worth reading is the respected Institute for Fiscal Affairs who yesterday pointed out that pensioner households for the financial year of April 2012 onwards will actually see their average incomes rise above inflation to the tune of about 0.5%. Their assessment concludes that even after all the future changes are applied, pensioner households are the least affected of any income group in the country. They also confirm that the richest in our country are the ones who will see the greatest loss of income.

Much mention has also been made of the 50p tax rate. There was a reason why Labour only introduced the 50p rate for their last 36 days in power. That being that it was recognised that it could kill investment and be hard to collect. This has now been confirmed by the independent Office of Budget Responsibility who concludes that it has not brought in what was expected. The changes to the rate cost the taxpayer £100 million but the Government has off set that by increasing other taxes on the rich that will raise an additional £500 million in return. We must have a tax system that makes those at the top pay the most but that does not deter investors. Just yesterday as a result of these changes a major employer, Glaxo Smithkline, has said that they will now create 1,000 new jobs in the UK as the budget has now made the UK a place worth investing in again.

The public finances remain in a mess. This wasn’t the Conservatives doing and the Government still has to make tough decisions to bring debt under control. The changes affecting pensioners are not targeting them and hopefully you can see from reading the above the Government has done much to shelter pensioners from the worst of the cuts.

The East Riding of Yorkshire Council needs fair and transparent funding from Central Government

East Riding of Yorkshire ratepayers will have a small rise of 1.5% in their council tax charges this coming year.

The Conservative Controlled East Riding of Yorkshire Council has set a budget for the next financial year of £269 million, which requires a council tax at Band D of £1,212.20. The council tax increase is the lowest ever set by East Riding of Yorkshire Council and will mean that the increase for an average household will be less than £16 per year.

While the costs of providing services in a large but quite sparsely populated rural area like the East Riding are high - as with all Local Authorities the East Riding of Yorkshire Council relies heavily on the Central Government grant for funding; unfortunately over recent years the area has received less and less. At present we receive around £100 per person less than the national average, and significantly less then our neighbouring authorities, e.g. the East Riding gets only £384 per person compared to £600 in Hull. (please see table below)

The formula Labour use is so complicated it is impossible for most people to understand but it adds up to Central Government giving the East Riding a staggering £100 million less that it would if we were funded to the same level as Hull.

The unfairness in Central Government funding also applies to schools, with the East Riding pupils again receiving less funding per head then the national average and also that of our neighbours, e.g. East Riding schools receiving £337 less per pupil than Hull schools. (please see table below)

An extremely positive outcome of the 2010/11 budget is that the East Riding of Yorkshire Council will be carrying out its biggest ever building or ‘capital’ programme, with £148 million to be spent on improving essential infrastructure like roads, housing and schools. The programme has been boosted and accelerated by the fiscal stimulus of £100 million approved last year which is resulting in the council bringing forward many schemes to assist the local economy and support local businesses.

In addition, the council is undertaking a £33 million programme over the next year, which will see the first new council, homes in the East Riding for many years. Some 275 properties are to be built and more will follow as a result of additional funding that has been secured. This building programme will also help support local businesses, especially the construction industry.

In conclusion, despite being constantly squeezed by lower and lower Central Government funding year on year. The East Riding Council continues to deliver top level, four-star services, investment in infrastructure, and sound financial management, whilst keeping the Council Tax relatively low..... and strange as it may seem we also have a net influx of pupils from Hull attending East Riding of Yorkshire Council's high performing schools.

Please find the following from Prospective MP for Brigg and Goole Andrew Percy:

Labour Seek to Double Council Tax Rise

Submitted by andrew on Thu, 11/02/2010 - 21:01.
Andrew Percy has reacted with anger at an attempt by Labour Councillors to double the Council tax rise for residents in the Goole and Snaith area.

The East Riding Council met today to set the Council Tax for the next year with Labour Councillors trying to force a higher than inflation rise of 3% on hard pressed taxpayers.

Andrew Percy says, "With unemployment in our area still rising, and with the Humber area suffering the hardest from Gordon Brown's recession, you would have thought that Labour Councillors would have wanted to give hard pressed taxpayers a break. Pensioners in particular feel Council Tax rises especially hard, and after 13 years of putting up the bills of pensioners, Labour have clearly learned nothing!

It is only thanks to the vigilance of Conservative Councillors that this year's rise will be kept to 1.5%, well below the current rate of inflation. I don't always agree with everything the East Riding Council does but they have certainly made the right decision on this year's Council Tax.

The East Riding receives some of the worst funding in England from the Labour Government, meaning that keeping Council Tax rises down is no mean feat."

Lowest ever council tax rise set by East Riding of Yorkshire Council

East Riding of Yorkshire ratepayers will have a small rise of 1.5% in their council tax charges this coming year.

The Conservative Controlled East Riding of Yorkshire Council has set a budget for the next financial year of £269 million, which requires a council tax at Band D of £1,212.20. The council tax increase is the lowest ever set by East Riding of Yorkshire Council and will mean that the increase for an average household will be less than £16 per year.

As Councillors we had as a basis for discussion a budget prepared by the council’s corporate management team which indicated a 3% rise in council tax. However, this increase has been halved by taking money from various reserves and budgeting for a half per cent pay rise, which is in line with national expectations, and not from front line services.

I hope that this lower-than-expected increase will come as some relief to the many East Riding families who continue to endure the adverse effects of the recession, especially those on fixed incomes. This is more good news for Gilberdyke residents who will also benefit from the 30% cut in the Parish Council part of their council tax.

I think we certainly took our political opponents by surprise in announcing the 1.5% increase. It was sad that the Liberal Democrat group could not support our proposals, and even worse that the Labour Councillors not only failed to support the budget, but instead proposed a full 3% increase. I am not sure what message the local Labour Group is sending out but it has all the hallmarks of what we have seen with Labour nationally since 1997 – HIGHER TAXES!

I agree with Beverley and Holderness Tory MP Graham Stuart when reacting to our budget proposals he said,

“Labour has learnt nothing, the choice at the General Election is now clear – responsible government under the Conservatives or sky rocketing taxes under Labour."

http://www.grahamstuart.com/

Gilberdyke Parish Council Reduces Budget Precept Saving 30% For Local Residents

As a member of Gilberdyke Parish Council I am very much aware that Gilberdyke residents continue to feel the effects of the recession including higher levels of unemployment and having less money to spend.

Gilberdyke Parish Council has devised and agreed a budget precept for the year 2010/11 of £49,160 which equates to a real terms reduction of some 30% on the present year, without affecting the services it provides. The council has kept a very tight reign on this present years spending that has generated a slight under spend in a number of areas, which can be rolled over to next year.

The Councillors looked very carefully at each area of spending for next year, identified their priorities and looked for best value, which has resulted in the reduction in the budget. As the area pulls out of recession the precept may rise the following year to accommodate more capital spending.

The Parish Council have agreed to refurbish the bus shelter in the village as soon as possible, paid for with funds already allocated. (Picture of Gilberdyke pond taken by Paul Glizzard)