I revealed early in the afternoon that business is to be hit with a £1bn stealth tax based on carbon emissions.
The red book is full of other changes which will raise money fairly discreetly on the basis that few people will have heard of them. On their own they may seem fairly modest but in tandem they are raising billions of pounds – without the highly visible impact of, say, a rise in income tax.
Here are a few examples.
“Public Works Loan Board: interest rate increase“. This is part of the Treasury that loans money to councils. Raising interest rates will gather £450m a year by 2014/15, according to government figures.
“Working Tax Credit: increase working hours requirement for couples with children to 24 hours“. This will raise £390m by 2014/15.
“Working Tax Credit: Reduce payable costs through childcare element from 80 per cent to 70 per cent restoring 2006 rate.” This will raise £270m next year and more thereafter.
“Savings Credit: freeze maximum award for four years from 2011-12.” This is a perk for low-medium income pensioners. The change will raise £330m by 2014/15.
“Disability Living Allowance: Remove mobility component for claimants in residental care.” Raises £135m by 2014/15.”
“TfL Metronet: replace borrowing with central government grant“. This saves £325m next year. Don’t ask me what it means in practice…..
UPDATE
I should also mention that changes to child benefit – which we did know about – will in fact raise far more than the Tories told us during their annual conference. The money raised by axeing the perk from top-rate taxpayers will be £2.5bn a year, instead of the £1bn they suggested. It will also hit 1.5m families, not 1.2m as previously stated. Interestingly, officials have confirmed that ministers did want to remove the benefit from children aged 16-19. They dropped it at the end of last week when they realised they could live without the extra money.
Jim Pickard
Kiran Stacey