How much extra tax will I pay under labour?

The answers is probably none.

After the media sent out conflicting scaremongering messages about the pledges in the Labour manifesto, I decided to look into it myself.

The current rates on income tax are 20% for earnings between £11,500 and £45,000, 40% for earnings between £45,000 and £150,000 and 45% for earnings above that.

If you earn £11,500 or less, you will pay no income tax at all. If you earn £11,501, you don't suddenly start paying 20% on all £11,501. You will just pay it on earnings above £11,500, i.e. on £1. So you would just pay 20p tax.

This is something that seems to confuse some people. You pay a percentage on everything you earn that falls within that band.

The proposal in the Labour manifesto is that the banding for the 45% tax rate will begin at £80,000 rather than £150,000 and there will be a new 50% tax rate for any income above £123,000.

I have created a chart below which shows these changes. The max tax for the band and max additional tax are the important numbers. If you earn up to £11,500, you can see that the maximum tax for the band is £0 and this is the same under both the current and proposed tax rates.

If you earn between £80,000 and £123,000, the current maximum tax you could pay (if you earn at the top of the band) is £37,899 per year. Under the new system, this will increase to £40,049, an increase of £2,150.

So for the majority of people, there will be no additional tax. Their proposed changes are intended to only affect 5% of the workforce who earn over £80,000. The current workforce stands at 31.95 million, so 5% works out to be around 1.6 million people. This sounds like a lot and the press have been using this number to attempt to make their readership angry about it.

However, it is important to remember this is only for the top 5% of earners. If we look at a list of salaries by profession, we can see the sorts of people who will be affected by this. The list is from 2015 so is slightly out of date. We can see that those professions where the average salary is over £80,000 include Chief Executives and Senior Professionals, brokers, aircraft pilots and flight engineers, marketing directors and sales directors.

You are not talking about your average Joe.

As well as the newspapers using the tax rises to turn the public against the Labour party, the Conservatives have plain lied about what the tax rises are. The tweet below was sent earlier this week. Whilst we have seen that just over a million people will be affected, the tweet uses the word "millions" which suggests that many more people will be affected than actually would be.

It also says that they will be increasing the basic rate of income tax to 25p. 25p in every pound would be an effective tax rate of 25% and as we've seen, this is not any part of the proposal and is an outright lie.

It is this sort of electioneering (along with the £350 million for the NHS bus pledge) which make the public disillusioned with politics and politicians.

It is my #publicduty to tell you about the destruction of social housing at the hands of the Conservatives

I have been thinking about writing this for quite some time. The recent #publicduty hashtag on Twitter has prompted me to do so as I love a good bandwagon.

I have worked for a housing association for around two and a half years. In that short time, I have seen the systematic reduction of social housing, using aggressive tactics to decrease the number of houses available for social tenant and making it more difficult for individuals to get and maintain social housing tenancies.

What is social housing?

Let me start by explaining what social housing is, as I didn't understand fully when I started working in the sector. Around half of social housing is what most people would know as council housing. The other half is housing through other social landlords, the majority of which are housing associations.

Social housing is characterised by one thing - it is available at less than the market rent. The average social rent in England is £82 per week. Whereas the median market rent in England is £650, which equates to around  £151, which is almost twice as much.

Why is social housing needed?

The reasons that people need social housing are varied. The classic stereotype is that people who live in social housing are unemployed benefit scroungers. Around 3.3 million in social housing claim housing benefit. This is out of a total of 4.1 million who live in social housing, so around 80% of social housing tenants claim housing benefit.

There are a number of reasons why people would need to claim benefit. The most obvious is that their income is not enough to allow them to live on whilst paying their rent. To counter the stereotype, it is important to now that only 8% of those living in social housing are unemployed. Others who living in social housing may be retired, disabled, carers or simply in low paid work which does not allow them to sustain their tenancy without financial assistance.

At some point, all of us may have the need for, or know others who have the need for social housing.

Why is social housing in danger?

There have been several attacks on the numbers of social housing numbers and social housing tenants since the coalition came into government in 2010. I will outline what I think are the key ones which have resulted in many people struggling to get or maintain a tenancy.

Affordable Rent

One of the first things that the coalition government did in terms of housing was to introduce what they termed Affordable Rent. They encouraged councils and housing associations to convert housing from social housing to affordable rent homes when they came up for re-let. As a result of this, the amount of stock in social housing has reduced.

Affordable Rent can be up to 80% of market rates. According to Shelter, The average is 71% compared to social tenancies which are generally around 50% of market rent. Tenancies are also less secure than social rented tenancies.

As a result of all of this, those in need of it are more likely to struggle to find somewhere they can afford at a social rent. They will then most likely have to look at affordable rent or private tenancies which they will potentially struggle to afford. As they have less security in their tenancy, they are more likely to be evicted if they fall into arrears.

Over 170 tenants were evicted every day in 2015, which is 53% higher than when the coalition government took over in 2010. There has also been an increase of 24% in Scotland since that point.

Right to Buy

The Conservatives have always placed a focus on home ownership. Originally brought in by Maggie Thatcher's government, the Right to Buy (RTB) was brought in to allow tenants to buy their council house under certain circumstances.

Whilst on the face of it, this looks like a good idea, it has had lots of repercussions that are bad for those in need of social housing. 40% of council homes sold under RTB are now being rented out in the private sector.

So instead of allowing people to own their own homes, it allowed them to become private landlords. It had the double effect of reducing the number of housing units available for social tenants and increasing the supply of the expensive private rented sector. Fewer social homes were therefore available for the same number of people who needed them.

The Conservatives pledged to extend RTB to housing association tenants in their 2015 manifesto. This met with resistance from housing associations because of the problem of reducing social housing stock as it did with the original RTB. Under pressure to comply, several housing associations grouped together to offer a voluntary RTB scheme to allow them to retain some control over the situation.

This new RTB is offering discounts of over £100,000 if you meet certain conditions. The way that this is being funded is by forcing councils to sell their own housing stock in order to reimburse the housing associations. This could result in the sale of 23,500 council homes per year, according to Shelter.

Whilst housing associations are being compensated in full, and expected to use the money to fund replacements on a one for one basis. There are problems with this which include the time it takes to build a replacement home, and also the availability of land in the area in which the home is sold. In overcrowded areas, it is unlikely that a home will be built anywhere near the one sold and this could result in social cleansing. The fact is that one for one replacement isn't working.

What the voluntary right to buy is accomplishing is removing two homes from the social housing sector for every one sold, with a promise that one of those two will be replaced in the near future. This results in a decline in social housing stock, meaning more bad news for those on the housing waiting lists.

Section 106

Section 106 agreements are part of almost every planning applications for large housing schemes. This meant that a certain percentage of every scheme had to be set aside for affordable housing. This generally meant that there was a large number of Affordable Rent units being built. However, changes to regulation meant that Shared Ownership properties were being classed as affordable. Shared Ownership properties are effectively part-purchase, part rent properties. They are great for helping people to get on the housing ladder. They are not great for helping those in need of social housing. The term affordable effectively becomes meaningless. The percentage of new social housing was reduced, resulting in further delays for anyone on the waiting list.

Rent reductions

In the 2015 Budget Statement, George Osborne announced a 1% rent reduction for those in social housing. This sounds like a great idea. If a tenant is paying their social rent, they will be slightly better off. If a tenant has housing benefit, the government will have less of a welfare burden.

If you scrape the surface of this, you will see what is also happening is that housing associations are getting less income. They are therefore not able to build as many new homes as they would have previously been able to. An estimate at the time was that 14,000 fewer homes would be built annually.

The policy was intended as a vote winner, attempting to attract those in social housing (generally not the Conservatives target demographic). The impact of reduced housing benefit is relatively minimal for the government, yet relatively significant for housing associations.

The result of the policy is fewer houses being built in the social housing sector, and possibly housing associations needing to remove properties from the social sector in order to make them financially viable. Genesis said that it was no longer feasible for them to build social housing, and others may follow.

All of this again increases waiting lists.

Welfare reforms

Another vote winner is the benefit cap. This was introduced as an upper limit on the benefits that individuals could receive during the year. This played well with some sections of the electorate, as those on benefits have been demonised in the certain sections of the media who call them scroungers.

The level of the cap is entirely arbitrary. It doesn't take into accounts the needs of individuals, and has left many struggling. After other benefits are taken into account, such as child benefit or disability benefit, many are left with a reduced amount left for their housing. A recent Panorama found that some people are being given just 50p per week housing benefit. This puts people at risk of falling into arrears, losing their tenancy and potentially becoming homeless.

Fit for human habitation law

This is not specifically for social housing but an important point that I want to raise. I use the word law but in reality this is a law that doesn't exist. Conservative MPs voted down an amendment to the Housing and Planning Bill which would have seen a law meaning that homes had to meet minimum basic standards before they could be rented out. 72 of the MPs who voted down the amendment receive an income of over £10,000 from properties each year. This suggests that they are happy to receive money from homes which are not habitable for human beings.

Conclusion

The changes in policy have been hitting social housing hard. Collectively they have resulted in fewer homes being available for social housing rent. This means that those in need of it are going to struggle more to find something that they can afford. Waiting lists go up. People become more desperate.

They are more likely to need to look at market rents which they may not be able to maintain and might end up evicted, and it will be easier to evict them as their tenancies in the private rented sector will be less secure.

A lot of these policies are vote winners, designed to attract certain demographics of the electorate with no thought for the consequences on individuals. As can be seen for the fit for human habitation amendment being voted down, the Conservatives don't care what conditions you have to live in.

It is a systematic attack on the people who are least likely to vote for the Conservatives in an attempt to gain votes from the middle ground. And human beings are suffering because of it.