ALEX Salmond last night accused David Cameron and his cabinet of a fundamental failure to connect with ordinary people, as the Coalition lowered the top rate of tax for millionaires and imposed an unprecedented real-terms cut in benefits.
Speaking at Princeton University after the annual Tartan Day parade in New York, the First Minister said the changes demonstrated Coalition ministers' basic inability to put themselves "in other people's shoes".
Referring to the bedroom tax, which is cutting the housing benefit of 100,000 Scots in social housing by up to a quarter, he said: "Can you imagine that any ministers would make such cuts - if they had imagined what it would be like to be a disabled person forced to move? Or to be a single occupier facing a cut in benefits but without any viable choice of new accommodation?
Writing in the Sunday Herald today, right, Salmond explains the themes explored in his speech.
The Coalition yesterday dropped the top rate of income tax from 50p to 45p for those earning more than £150,000, on the grounds the higher rate only encouraged tax avoidance by the rich and had failed to raise enough to be worthwhile.
Labour said the change meant gains for 267,000 top earners, including 13,000 people on more than £1m, who will be an average of £100,000 better off.
Other changes included a real-terms cut in most tax credits and working-age benefits, including Jobseeker's Allowance, which were raised by just 1%, well below the rate of inflation.
The state pension rose 2.5% to £110 a week, while child benefit remained frozen for a third year.
Labour claimed all households would be £891 worse off on average this year because of cumulative benefit cuts and tax rises, citing a study by the Institute for Fiscal Studies which suggested one-earner families with children will be £4000 poorer because of changes under the Coalition.
Shadow chancellor Ed Balls said: "David Cameron and George Osborne are giving millionaires an average tax cut if £100,000 while they make millions of pensioners and working people on middle and low incomes worse off.
"Any gains ministers boast about from the rise in personal allowance are swamped by higher VAT, cuts to tax credits and child benefit."
However, when questioned on BBC Radio 4, Balls said he was not in favour of reinstating the 50p top rate if it didn't raise enough income.
"I would rather see every tax rate come down. I'm not a high-tax person, I'd rather get taxes low," he said.
Len McCluskey, general secretary of the Unite union, accused the Chancellor of "class war".
He said: "Millionaires will be raising a glass of champagne to George Osborne this weekend. But ordinary people will be furious he has chosen to give away £1bn to the super-rich while their fuel and food costs rise and wages are falling. His party knows no shame."
In response, the Coalition trumpeted a rise in the personal income tax allowance to £9440, giving basic-rate taxpayers an extra £267 a year.
However, the uplift was partly funded by making another 400,000 people pay income tax at 40% by lowering the threshold to £41,450.
LibDem Chief Secretary to the Treasury Danny Alexander said the change would help those on low and middle incomes and was a major step towards delivering the LibDem manifesto pledge that no-one earning below £10,000 should pay income tax.
Cameron used Twitter to declare: "From today 24m people will be paying £600 less income tax than in 2010".
He included a link to a new Tory poster saying the change was: "Help for Hardworking People".
A Labour poster ripostes: "Who Wants to Bung a Millionaire? Dave Does."
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