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| Osborne's tax summary dismissed as propaganda by the TUC | |
| (35 minutes later) | |
| An initiative to show millions of taxpayers exactly how their money is spent has been dismissed as 'propaganda' by the TUC. | |
| As promised by the chancellor, George Osborne, in 2012, taxpayers are this week starting to receive letters which detail where their money goes. | |
| The TUC said the letters as "party political propaganda masquerading as neutral information". | |
| But the government said they amounted to "a revolution in transparency". | |
| The letters show that 24.5% of government spending goes on welfare payments. | |
| "The chancellor is relying on the fact that many people think spending called welfare all goes to the unemployed," said the TUC's general secretary, Frances O'Grady. | |
| She said the government was trying to soften the electorate up for further cuts. | |
| 'Promise' | 'Promise' |
| The summaries will set out how much tax and National Insurance each person has paid, together with a breakdown of where it was spent - for example welfare, transport, health and education. | The summaries will set out how much tax and National Insurance each person has paid, together with a breakdown of where it was spent - for example welfare, transport, health and education. |
| "It's about people getting information," Mr Osborne told the BBC. | "It's about people getting information," Mr Osborne told the BBC. |
| "This is about people knowing where their money is going and how much tax they're paying. | "This is about people knowing where their money is going and how much tax they're paying. |
| "I think it is going to help as a country the debate we have about living within our means." | "I think it is going to help as a country the debate we have about living within our means." |
| Example of the Annual Tax Summary breakdown | |
| But the information being sent out also does not include indirect taxation, like VAT, fuel and alcohol duty. | |
| "Families and pensioners are paying more in higher VAT, but that tax isn't part of these statements," said the shadow exchequer secretary to the Treasury, Shabana Mahmood. | |
| Over the last ten years, the government has shifted more of the tax burden to indirect taxes, like VAT or alcohol duty. | Over the last ten years, the government has shifted more of the tax burden to indirect taxes, like VAT or alcohol duty. |
| According to Bloomsbury Professional, an accountancy firm, while direct taxes have increased by 38% over that period, indirect taxes have risen by 49%. | According to Bloomsbury Professional, an accountancy firm, while direct taxes have increased by 38% over that period, indirect taxes have risen by 49%. |
| Analysis | Analysis |
| By Joe Lynam, BBC News Business Correspondent | By Joe Lynam, BBC News Business Correspondent |
| No other European country gives its taxpayers such a breakdown of how their taxes are being spent. | No other European country gives its taxpayers such a breakdown of how their taxes are being spent. |
| Australia is the only developed economy that already does so. This chancellor, with his highly-tuned political antennae, will be fully aware of the impact of such statements. He knows that some income taxpayers will resent that a quarter of their taxes go on welfare payments. | Australia is the only developed economy that already does so. This chancellor, with his highly-tuned political antennae, will be fully aware of the impact of such statements. He knows that some income taxpayers will resent that a quarter of their taxes go on welfare payments. |
| He acknowledges it will provoke a debate and one that might benefit his party, which aims to cut welfare spending even further if re-elected in May. Of course the tax summaries do not break down the welfare payments into their constituent parts such as unemployment, child benefit, winter fuel allowance, in-work tax credit etc. | He acknowledges it will provoke a debate and one that might benefit his party, which aims to cut welfare spending even further if re-elected in May. Of course the tax summaries do not break down the welfare payments into their constituent parts such as unemployment, child benefit, winter fuel allowance, in-work tax credit etc. |
| Critics will say that is a deliberate omission. | Critics will say that is a deliberate omission. |
| One further notable element is the single smallest element of your tax bill is Britain's contribution to the EU budget at 0.7%. | One further notable element is the single smallest element of your tax bill is Britain's contribution to the EU budget at 0.7%. |
| There are almost 30 million taxpayers in the UK, and those who do not receive a summary can use HM Revenue & Custom's tax calculator to get similar information, the Treasury said. | There are almost 30 million taxpayers in the UK, and those who do not receive a summary can use HM Revenue & Custom's tax calculator to get similar information, the Treasury said. |