Conservative Party tax giveaways would benefit the rich ten times more than low-income working families, according to new research published today.
Figures compiled by the Trade Union Congress (TUC) show that higher-earners will be the biggest winners from ‘unfunded’ Tory tax cuts, while the lowest-paid would receive only very modest gains.
The damning research counters claims made by David Cameron earlier this week that the Tories are the “party of the working class”.
TUC looked at the average impact of tax proposals outlined in the Tories general election manifesto across a varying range of income scales. They found that the poorest would be no better off, while the second poorest would only get an extra £2 a year. This is in sharp contrast to richer households, who would benefit to the average tune of an extra £875 a year.
The research also found that the proposed increase in the personal allowance to £12,500 would leave basic rate taxpayers £222 a year better off. However, higher-rate tax payers will be rubbing their hands at the prospect of an extra £1,126 a year.
In addition, taxpayers earning between £50,000 and £100,000 a year would also benefit from Tory proposals to raise the higher-rate tax threshold. After tax, their incomes could rise by as much as £2,000 per year – ten times more than that for basic earners.
Furthermore, any tax gains for low-earners would be almost certainly wiped out by further cuts to in-work benefits and tax credits.
An alternative approach of targeting help to low and middle-earners through improvements to Universal Credit could result in middle-earners being at least £500 better off. Some families would be more than £700 better off, according to the TUC analysis.
TUC General Secretary Frances O’Grady said: “We should be targeting help where it’s most needed. But David Cameron’s tax plans will give ten times as much to the rich as to families on regular earnings.
“Families have just suffered the longest decline in living standards since Queen Victoria was on the throne. But before wages have even recovered, the Conservatives are prioritising special treatment for the wealthiest.
She added “The pledge to help minimum wage workers is a con. Most of them don’t earn enough to pay income tax, but Conservative plans for extreme cuts will hit their tax credits, children’s benefits and local services. All in all, low-paid workers and their families will be left much worse off.
“A better plan to help low-paid workers and their families would be to target support through Universal Credit. This would make low and middle-earner families hundreds of pounds better off, as well as giving a boost to businesses in their local economy.”