- Tax Credits cuts
“Osborne was in the firing line again as he initially pushed ahead with plans to cut tax credits for families as part of austerity measures announced in 2014.
“In a 2015 Spending Review that was also notable for John McDonnell’s decision to brandish Chairman Mao’s ‘Little Red Book’ in the House of Commons, Osborne surprised MPs by ditching the hugely controversial policy altogether after the plans were initially rejected in the House of Lords.
“At the time, Osborne argued the U-turn was the ‘simplest’ option – despite it blowing a £4.4 billion hole in his carefully crafted spending plans.”
- The Dementia Tax
“Theresa May’s 2017 manifesto that eventually saw her slim majority wiped out came under fire at multiple stages of the disastrous election campaign, but perhaps most notably for her policy widely dubbed the ‘Dementia Tax’.
“The Conservative Party’s proposed measures on social care would have seen the personal capital limit for which someone in care’s costs would be covered by their local council raised from up to £23,250 to £100,000 and to begin including the value of that person’s home, even if they were still living in it and required care at home. They also proposed that a family home would not need to be sold until after death to pay for care at home.
“Crucially, the manifesto did not commit to capping lifetime care costs, leading the policy to be dubbed a ‘Dementia Tax’ – a label that was always likely to sink it.
“Sure enough, May was forced into a U-turn on the policy and committed to capping care costs, famously claiming that ‘nothing has changed’ in relation to the plan.”
- Hiking self-employed National Insurance
“Back in 2017 Chancellor Philip Hammond was forced into a screeching U-turn over plans to hike National Insurance rates for the self-employed.
“Under the original proposals, Class 4 National Insurance Contributions, the rate paid by self-employed workers, were due to rise from 9% to 10% in 2018 and 11% in 2019. It was argued that the proposals represented a fair deal for self-employed workers, since the new state saw them given better access to the state pension
“Despite continuing to argue the policy was fair, Hammond abandoned the rise a week after it was announced after Conservative MPs questioned whether it was compatible with the party’s 2015 manifesto commitment not to increase income tax, National Insurance nor VAT rates – the so-called ‘tax lock’.”
- The Health and Social Care levy
“While today’s U-turn by the Chancellor on the 45p rate of income tax was undoubtedly more dramatic, it’s worth remembering this was not his first.
“Just before his mini-budget, Kwasi Kwarteng confirmed plans to introduce a new 1.25% Health and Social Care levy in April 2023 would be abandoned.
“Kwarteng and Prime Minister Liz Truss would no doubt argue that they never supported the levy in the first place, and therefore it isn’t a U-turn at all. However, both were senior Cabinet members when it was signed off and ultimately this remains the same Government that was elected in 2019 – albeit with different politicians now in charge.”
