Now a tax on hard work!

Hard-working families will suffer most under Alistair Darling’s stealth-tax Budget, it emerged yesterday.

STEALTH Alistair Darling STEALTH: Alistair Darling

Meanwhile, lone parents and households where no one works will be rewarded with a significant boost to their incomes.

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As experts began to analyse the small print, Philip Hammond, Shadow Chief Secretary to the Treasury, summed it up as “a bad news Budget for Britain’s middle-income families”. They will bear the brunt of Labour’s tax burden, according to the Institute for Fiscal Studies. In total, the average family is expected to be £110 a year worse off. [>

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There was outrage last night as full details of the blow to Middle Britain were revealed. [>

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And taxpayers were warned that Labour is secretly cooking up another £8billion tax bombshell for after the next general election. The IFS, an independent research organisation, highlighted a deficit in public finances which is almost certain to lead to more tax rises – as much as £330 for every household in the country. [>

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IFS director Robert Chote said: “Alistair Darling’s first Budget was the seventh in succession in which the Treasury has had to concede that the outlook for the public finances is worse that it had previously thought.” [>

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The IFS has calculated how the Budget, including rises in drink duty, car tax, aviation duty and other stealth measures, will affect households from a range of different social backgrounds. [>

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The analysis showed that middle-class taxpayers will see their incomes fall by about 0.2 per cent by 2010. Households on the lowest incomes, including those with nobody in employment, will have their incomes boosted by around 0.6 per cent. [>

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Lone parents, whether in employment or not, will see their incomes increased by 1.25 per cent. [>

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Working families with school-age children will have the effects of the tax rises slightly mitigated by an increase in child benefit. But working couples without children, or whose youngsters have left home, will also be worse off. They are set to lose 0.25 per cent of their income. [>

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The Tories seized on the analysis as fresh evidence that Mr Darling is hammering Middle Britain. Mr Hammond said: “We already know from figures published this week that the tax burden they face is rising faster than in any other Western country. Now they will feel the squeeze even more from steep increases in taxes on cars and alcohol at a time when the cost of living is already soaring. A Conservative government will offset any increases in green taxes with tax reductions on hard-working families.” [>

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The IFS analysis also revealed a hidden blow to pensioners. [>

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Mr Darling trumpeted rises of £50 in the annual winter fuel payment and £100 for those in their 80s in his speech on Wednesday. It later emerged that the measure is only for one year. [>

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By 2010, single pensioners and retired couples will have seen their incomes fall by 0.25 per cent. Shadow Work and Pensions Secretary Chris Grayling said: “This Budget has been yet another con trick by Gordon Brown and his team.  [>

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"This year pensioners are the victims. When you strip away the headlines, senior citizens will be much worse off, which is a disgrace.” [>

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It also emerged yesterday that changes to national insurance hidden in the Budget will cost millions of workers more than £500 a year. [>

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The earnings ceiling for exemption from the higher rate of contributions has been raised by £100 to £770 a week. It means workers earning £40,000 will pay £520 a year more. [>

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Mr Darling attempted to justify his crippling tax rises yesterday, stressing that he was taking a cautious view. [>

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But Shadow Chancellor George Osbourne accused him of trying to shuffle off blame for the crisis. [>

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