December 10, 2009 9:31 AM

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Tax hike and cut in spending hits hard UK's middle class

In U.K, Ministers have defended the tax rises and spending cuts announced in the pre-Budget report against criticism from the opposition, business and unions. The Tories said Alistair Darling blew an opportunity to show he was serious about cutting the deficit by delaying decisions until after the election. The chancellor also came under fire for hitting low and middle income workers. Among his headline proposals are a 0.5 per cent rise in National Insurance and a 1 per cent cap on public pay settlements from 2011. Unions have protested that low-paid workers are being penalised for a recession not of their making and warned of problems ahead.The National Insurance increase which will raise about 3 billion pounds a year, has angered the business community, which says it is a tax on jobs when the focus should be on economic recovery. The increase limited to those earning more than 20000 pounds a year will hit about 10 million workers.

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