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Town mayor launches protest over Budget's 'granny tax'

Monday, 23rd April 2012.

Haverhill's town mayor, Cllr Maureen Byrne, has gone into battle on behalf of pensioners who will be hit by the so-called 'granny tax'announced in the recent Budget by chancellor George Osborne.

She is urging townspeople to write to Haverhill's MP, Matthew Hancock, supporting a campaign to have 'these unfair tax changes' reversed.

Cllr Byrne, a Labour councillor on both Haverhill Town Council and St Edmundsbury Borough Council, said: "The Government trumpeted it as a 'simplification of the tax system', but it has quickly become known as the 'granny tax', and there's a good reason for that. It's just not fair on our pensioners.

"So, you ask, 'what's all the fuss about?'. The answer lies in changes to the tax system made by Chancellor George Osborne at the last budget.

"We are all entitled to a certain amount of income without paying any tax on it, but since the 1920s the over 65s have been allowed a little more than the rest of us. Winston Churchill introduced this extra age-related allowance in the 1920s, recognising that many older citizens have less income, and fewer opportunities to earn money.

"I'm sure that's a situation we all recognise still applies today. But the Chancellor has decided to phase out the extra allowance for existing pensioners, and to stop it altogether for anyone who reaches age 65 from April next year so that we all get the same tax-free amount whatever our age.

"'Isn't that fair?' you might ask. The answer is a definite 'No'. Pensioners will be up to 323 per year worse off because of the change, at a time when they can least afford it because they face other attacks on their income: The Winter Fuel Allowance has been cut; pensions have been indexed to a lower measure of inflation; the increase in the state pension age for women has been brought forward; and last year's VAT rise added 275 to the costs faced by an average pensioner couple.

"Add to that the impact of very low interest rates on savings - because the Government hasn't got our economy moving - and cuts to vital services like the NHS, social care and local transport which hit older people harder than the rest of us.

"For many the rise in the state pension will mean nothing because of changes to pension credit, another benefit designed to help pensioners on low incomes.

"And as a final insult, the Chancellor plans to abolish the savings credit, a benefit paid to pensioners on modest incomes who have saved into a pension scheme. Another 'simplification', but unsurprisingly it's now being called 'granny tax 2'. Not looking so fair now, is it.?

"What's worse is that for high-earning pensioners, the extra allowance isn't available anyway because they don't need it, so they will be no worse off. The ones who will lose out most are those on middle incomes who have worked all of their lives and who have saved into a pension scheme.

"So, hard-working people who have saved money and aren't very well off in their retirement are being asked to pay an extra 1bn to the Government, so that they can fund a tax cut from 50p to 45p for the richest one per cent in our society. Now that's simple - but don't be fooled into thinking it's fair!

"For the sake of our pensioners or to protect your own future, don't let the 'granny taxes' go unchallenged.

"Tell your local MP, Matthew Hancock, that you want him to support the campaign to have these unfair tax changes reversed. Phone him on 0207 219 7186 or 01638 576692, email matthew@matthewhancock.co.uk or write to him at House of Commons, London SW1A 0AA."

Haverhill Online News

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