‘The richest fifth of the population are worse off now in terms of disposable income than they were before the 2007 financial crash, but the poorest fifth have typically become better off, according to official figures.’
“The economic downturn “had a negative impact on the incomes of all but the poorest fifth of the population” ONS
Remember this from last year? How times change…
A plan for working people, one purpose, one policy, one nation. Hurrah says IDS.
What hasn’t changed is the BBC narrative about austerity, tax cuts ‘for the rich’ and welfare cuts punishing the poor and that of austerity being a political decision not one based upon economic necessity….the BBC believing that we should borrow to spend and stimulate….Labour’s very own narrative….as the Telegraph amusingly suggests….Sketch: Labour should have chosen Iain Duncan Smith as leader, not Jeremy Corbyn
In fact here’s little Owen Jones, and Yvette Cooper, spinning that very line in 2012….note the subject, disability…note who defends the government and says he is proud of what the government is doing…
IDS has, as you may have noticed, resigned from his government post, and then gone nuclear much to Labour’s and the BBC’s delight. They, no doubt, cannot believe their luck that the former Work and Pensions Secretary should be parroting their narrative. Is it stupidity, foolishness, immense bitterness or a conscience driven self-immolation taking the Tory Party down with him?
Looking at the evidence it would seem to be a combination of all those things…he must know that all the points he states are Labour’s favourite attack lines and that the BBC would leap instantly upon them as indeed they have.
What do we have? The government is increasing unfairness and inequality, that it is not a one nation government, that austerity is a political decision and not a necessity, that reducing the deficit is important but the burden should be shared out more evenly, that the rich are not being made to pay to reduce the deficit.
Andrew Marr got the first interview.
Sue at is the BBC biased? says I thought Iain Duncan Smith was treated fairly. Personally I don’t. Marr didn’t really have to say anything just let IDS dig an ever deeper hole for the Tory Party. However Marr thought he could speed up the burial process..his first question being to ask IDS if he thought the disability cuts were immoral. This of course immediately indicates the Labour supporting Marr’s thinking….nowhere does IDS suggest the the disability reforms are immoral and yet throughout the interview Marr continues to frame the question in that way until IDS has to deny his position is based upon morality, however you would define that.
Did IDS really think the disability cuts were unfair? No, he supported them all the way…..read his letter and he merely says that he objected to the presentation of the cuts alongside the tax cuts for the better off….this made it hard to justify the disability cuts….but he still thought the cuts should go ahead….it was all a matter of perception.
IDS dodges about eluding the blame for any of the welfare policies it would seem despite, as Marr points out, having defended them and not objected to them at all vociferously.
IDS tells us that the welfare cap was ‘arbitrary’…well no, it’s not. There is a budget and that limits spending…the question then is how much of that budget does each department get…that decision is based upon a whole range of factors and can in no way be described as arbitrary, the money pot is not bottomless and cannot possibly meet all the needs or wants of all the people, therefore a cap has to be set at some point. IDS talks as if there is a limitless pot of money. All spending caps on such terms are ‘arbitrary’….who gets what is a judgement not a science.
IDS says that we must get rid of the deficit but the money must come from others and not just from working age benefit cuts….and finishes on the claim that the government is in danger of dividing the nation becasue of their policy of only using the benefit cuts to fund deficit reduction.
But how true is that? Marr wasn’t keen on questioning the claims so intent was he on claiming that ‘what’s happening now is immoral’ and that the government must change its austerity policy. How can he suggest the government’s policy is ‘immoral’ when they have raised the lowest paid’s disposable income, got millions more into work and made the rich pay far more than they were paying before?
We’ve seen IDS cheering madly the introduction of the living wage for the poorest in society, we’ve seen the lowest paid being taken out of income tax and we’ve seen millions of jobs created taking those reliant on benefits off those benefits and into the workforce along with higher tax credits and job seeker’s allowance. But what of the rich? They get away with it don’t they?
Did you ever see the BBC splashing the headlines with this in February?
Richest fifth in the UK worse off since financial crash, official figures reveal
The richest fifth of the population are worse off now in terms of disposable income than they were before the 2007 financial crash, but the poorest fifth have typically become better off, according to official figures which could spark controversy among anti-austerity campaigners.
The data from the Office for National Statistics, published on Tuesday, also reveals a generational split, with the average disposable income of retired households now higher than in 2007-08 – in stark contrast to millions of working households, who are typically around £900 a year worse off.
According to the ONS, in 2014-15 the typical household paid £7,700 in direct taxes, which includes income tax and council tax. After these are taken into account, the average income enjoyed by the richest 20% of households is around five and a half times that of the poorest 20% – £67,000 and £12,300 a year respectively.
However, the department said the economic downturn “had a negative impact on the incomes of all but the poorest fifth of the population”. It said the least well-off 20% of households were the only group whose average disposable income did not fall between 2007-08 and 2012-13. In 2014-15 the typical income of this group was £700 (5.8%) above its 2007-08 level.
By contrast, the average disposable income of the richest fifth of households fell the most following the downturn: by 3.2% between 2007-08 and 2014-15. It remains £2,000 below its previous peak.
The ONS said the increase for the poorest fifth was mainly due to an increase in average levels of pay for this group, along with higher benefit payments such as tax credits and jobseeker’s allowance.
How can IDS get that so wrong? The ONS says that “The economic downturn “had a negative impact on the incomes of all but the poorest fifth of the population” So the poorest in fact have been given a pay rise not a cut.
Even the BBC, in 2009, wanted to present the rich as paying their fair wack…a cynic might suggest they wanted to present Labour as a Party that made the rich pay…..but the Tories have made the rich pay even more and raised the disposable income of the poorest….and yet that’s ‘immoral’?…….
The people with the top 1 per cent of incomes pay very nearly a quarter of all the income tax, as the chart shows. So option d – the highest available – gets points. The other options are at best half the true amount.
We can also see from the chart that people with the top 10% of incomes pay more than half the income tax.
The Office for National Statistics’ annual publication about the effect of taxes and benefits (see internet links, above right) suggests that most people actually pay a similar share of their income in taxes when all taxes are taken into account, even up to the top 10 per cent as a whole.
It also says this….
Data suggest that people receive services from the state greater in value than the tax they pay up to about 70 per cent of the way up the income scale.
Here is the IFS, best beloved of the BBC, which asks, in 2010 just before the election..
Do the poorest really pay the most in tax?
The Liberal Democrats have, once again, claimed that the poor pay more of their income in tax than the rich, and that this gap has got larger under Labour.
The poorest fifth of households were clearly net beneficiaries from the tax and benefit system, to the tune of £2,151 a year, on average. At the other end of the scale, the richest fifth of households received £1,666 a year in income from the state, and so they are net contributors to the Government’s coffers, to the tune of £24,259 a year, on average.
These figures show what one would expect: the tax and benefit system as a whole takes money from the rich, and gives it to the poor.
In other words the poorest didn’t pay the most tax even as a proportion of their income…and you know what, that’s still the situation.
IDS seems to be as stupid as Osborne thinks he is, and the BBC is jumping for joy pumping out headlines like this…
Duncan Smith warns government risks ‘dividing’ society
Iain Duncan Smith has warned that the government risks dividing society, in his first interview since resigning as work and pensions secretary.
He attacked the “desperate search for savings” focused on benefit payments to people who “don’t vote for us”.
As I’ve said, it is curious that Marr never once challenged IDS’s claims and indeed went further trying to use them to portray the government as immoral. IDS has utterly betrayed the Tory Party and handed massive ammunition to its enemies in the Labour Party and at the BBC who are not at all eager to question anything he has said, happy to go along with the nonsense…..and the BBC were enthusiastically dodging the EU question on Saturday in relation to this but have since been forced to raise the matter as it is seen as central to the resignation by so many one way or another.
Finally here is IDS vigorously defending benefit sanctions as Labour claims people die due to them….
Funny how the BBC never mention the new dividend tax – an absolutely MASSIVE tax increase on small business owners. From a personal point of view, myself and the wife will be paying in the order of £6K p/a more in tax in 16/17 if we maintain the same dividend as previous years. So much for the Tories being in favour of small business. Even liebour left the rate of dividend tax untouched because they realised that small business needed an incentive to keep driving the economy. The current Tory government are interested in one thing, and one thing only – big business.
be careful with that argument Neilw. The use of dividends in lieu of wage payments has been a way for business owners to avoid paying income tax. To ask that business owners pay something in lie of their tax is actually reasonable – and I too will be paying more in tax for my dividends from my company.
Agree with all else you say, businesses, both big and small, drive the economy. The BBC has never understood that you cannot have welfare without wealth creation.
The BBC has never understood that you cannot have welfare without wealth creation.
Well said.
I’d include anybody on the Left and the brainwashed generations who never have this simple fact explained to them (except those with common sense parents) because it would undermine the Great Money Tree Deception.
Dividend in lieu of salary is what makes running a business worthwhile, or should I say was worthwhile before Osborn saw us as a softer target than Starbucks et al.
We can all argue until the cows come home about what is a ‘fair’ rate of taxation and what isn’t, but from a personal point of view, and I’m sure most small business owners will agree, what is the point in working 14 hour days, 7 days a week, and taking all the responsibility and flak for little extra reward than being salaried? You might as well go back to working for an employer, doing the hours (all 7.5 of them) and taking the money. If the current government penalise the wealth creators then people will think twice about starting a business, and existing small business owners might be more inclined to do work ‘off the books’. The current arbitrary rate of taxation for higher earners effectively caps income because who in their right mind is prepared to work exponentially longer/harder for an ever diminishing reward?
In a nutshell, the Tories will NEVER get my vote again for introducing this tax, and sadly, voting UKIP around here is pi**ing in the wind.
No-one should seek to run a business primarily to avoid paying the same rate of tax on their income as everyone else. The practice of paying oneself dividends rather than salary is a tax dodge that has gone on for for too long. The point of being in business is to earn maximum profits BEFORE tax. While business is inherently risky, there is the opportunity to have a much higher income than most employees if the business succeeds. Thats the potential reward for risk. If the business can’t earn profits to provide an income for the owner comparable to their being employed, efforts and resources are better used elsewhere. So George Osborne should not be criticised for this particular tax change.
EnglandExpects – You don’t run a business or receive dividends do you?
neilw Some people confuse personal service companies which are, in effect, disguised employments with genuine businesses such as the local greengrocer who is running his business through a company, not necessarily for solely or mainly for tax avoidance reasons .
There is legislation , guidelines etc. to counter pesonal service companies but HMRC are very slow in using them. I wonder why ? I guess you know this but maybe some other posters are unaware. Grant, Chartered Accountant and former self-employed ( ! ) Tax Consultant.
neilw
One can only assume that you paid yourself and wife a modest wage and a large dividend for some reason.
Now we all boo on here when told that the BBC encourages their talent to operate tax minimising schemes, so I doubt if many will sympathise with you.
The problem is that the tax system is far too complicated, but a Chancellor of the Exchequer is unlikely to simplify tax to a flat rate on all income, earned or not, Without that, accountants and tax advisers will advise you and anybody else who wishes to pay for their services how to “operate” the system while the Chancellor will always be one step behind closing the expensive (tax losing) loopholes that they do not seem able to stop themselves from creating in the first place!
Mallard, I don’t think NeilW said whether his company is a personal service company or not .
And the difference is – in terms of minimising tax paid?
Do not get me wrong, the rules are set down and most will minimise the tax paid (possibly including St Billy Bragg and others who want more government spending) but should not complain when Chancellors tweak the system to get nearer to what they would under PAYE for a given “income” from employment.
I believe the trick is to ensure that “pay” covers the minimum required to obtain full NI “benefits” only so both NI contributions and income tax are lost by those opting to go down the inflated dividend route.
Owen Jones ?
Not Welsh I hope ?
What has that little boy done as a ‘real job’ for most of his life ?
Yes, Alan, my heart, too, bleeds for the fatcats who have doubled their income since the crash, not.
If you want to follow TLC Spoonface and Gidiot over the cliff, be my guest. Most people, including conservatives I suspect, will be glad to see the back of them.
Being a UKIP supporter, I’m torn between wanting them to stay there and ruin the Conservative Party but in the process drag the country down with them and having some conviction politicians save this country, save the Conservatives but, possibly, damage UKIP just when they are on the brink of a breakthrough
“Yes, Alan, my heart, too, bleeds for the fatcats who have doubled their income since the crash, not.”
So The Lord, apart from footballers, would you like to provide some names and income changes please.
We can them see who you think they are and what they have been doing. I hope none of them are people who have started businesses and employ people, because not everybody can work in the public sector, and for every entrepreneur who makes it there are probably many more who go bust, but if they did not take the risk to start with the economy would be in a rather poor state.
While we sit pontificating on the internet many business owners will be putting in rather more hours than I do, and as such I do not begrudge them their rewards , unlike footballers of course!
I feel that IDS finally lost it with George Osborne. To be fair, he does have a face that deserves a good slap.
That is an excellent analysis which goes to show Labour – and the BBC on their behalf (how selective they are in their use of official figures!) – continue to spin lies about the so-called widening gap between rich and poor.
I used to have a lot of time for IDS – especially for his work on benefits where he has shown logic, dedication to his task and old-fashioned Conservative compassion for his countrymen with his desire to get people out of their degrading benefit traps and into the world of work where they can live with a sense of purpose and self respect.
I’ve no time for Cameron (dedication to the ‘climate change’ and EU causes refer) but the way IDS has gone about this is pure madness, playing into the hands of the country-wrecking Left and their mouthpieces at the BBC.
Only a liberal lefty like Marr dares to talk of morality in any context to suit him.
For isn`t the whole project of the Left intended to remove issues like morality and ethics from the public sphere…for how else do you test morality but through religion?
It`s a Greek construct that suited before Jesus Christ came along…but after Christendom was forged from Greek, Judeo-Christian and local national sources-then “morality” became measured only by that subtle interplay of religion , ethics, democracy and reasoned concepts that evolved over hundreds of years in Europe and the Anglosphere.
And this has all been binned since 1992.
So Marr can shove his “morality” up his hole-Mr Superinjunction has no claim to use that word in decent company!
And-next time the BBC tell you that gathering migrants from the shallow end is a “moral cause”…then think of Jimmy Savile.
If I were Eddie Izzard I`d avoid doing too many more marathons-doesn`t end well, when you`re perpetually desperate to run away from yourself in doing “good works”.
Jesus has something to say about that-so fuck Sports Relief and all other BBC vehicles of “morality”(Mt 6:1-4)
chrisH , Well said, good one !
Did anyone do an interruption count on the Marr / IDS interview?
i think we can guess how that compares with the Nigel and Boris interviews!
Mr Marr is a deeply moral man, he always pays his team of lawyers promptly after another visit to the High Court.
BBC majorly obsessing as usual about ‘equal rights’ for women.
First its shock horror that some people think female tennis players should not be paid as much as men. The tournament director at Indian Wells who suggested what many agree with, is duly hounded out. Anyone who has watched a boring base line tennis game played by grunting women would agree whole heartedly with poor Mr Raymond Moore. BBC sports reporter on Radio 4 (naturally a woman and extra tick for non Anglo-Saxon) leads on this story over international cricket. Crazy priorities. Further interview on same bulletin with women rower about women’s rowing and its equality with mens’ rowing. The BBC’s objective is to highlight women’s sport as much as mens whatever the relative standards and popularity.
Then we have undue emphasis on some report that women are not promoted enough in financial services. Yawn yawn.
The BBC must be annoyed it has to put so much effort into making us poor fools more politically correct.
Irrespective of the quality or attractiveness of the female tennis product, how anyone can claim equality of pay when one set of players (male) have to work three times harder for the same reward is beyond me.
As for female football ! Certain people including the BBC seem to want parity of reward and television time because of the huge amount of TV money now going to men’s football. Conveniently overlooking the fact that it has taken men over a hundred years to get to this point, after attracting millions of fans to attend live matches, which in turn attracted the television companies, generating revenue through advertising from a vast audience that had already been established. Women’s football seem now to want the rewards without doing any of the hard work to establish the popularity of their product. An agenda constantly promoted by the High Priestesses of Political Correctness in the BBC.