Budget blues: who will be the biggest losers?

A song is buzzing around my head. ‘It’s the same the whole world over: It’s the poor what gets the blame. It’s the rich what gets the pleasure; Ain’t it all a bloomin’ shame?’ It was triggered by grim new research from the think tank Resolution Foundation claiming that 85 per cent of benefits from promised income tax cuts would go to the wealthiest half of Britain. The Foundation says even when the tax-free personal allowance on income is raised – from £10,600 to £12,500 by 2020 – it will be the better-off who will be the winners because our 4.6 million lowest paid workers earn under £10,600. And, rubbing salt in the wound, hopes of global recovery are evaporating, throwing off Chancellor George Osborne’s calculations. Keeping the government’s tax cut commitments on track means the Chancellor finding an extra £2 billion over next two years. New austerity measures will be needed to pay for tax cuts – and they will hit low earners hardest.