George Osborne has announced that the Coalition Government plans to scrap child benefit payments for families where one or both parents is a higher rate taxpayer.
Child benefit is currently paid to families (normally to the mother) where any children are under 18. It isn’t a means tested benefit: you have to apply and show you’ve got children, but there are no long, complicated forms to fill out where you give details of your financial situation.
So is the change a good idea? From my staw polling, most – but certainly not all – Lib Dems seem to think this is a change that’s long overdue. I’m certainly in that camp – for me, the benefits of saving a billion a year from people who don’t need state handouts (including me, for a good chunk of my working life to date) are worth it.
I have friends who use child benefit as a trust fund for their kids: each child gets around £750 a year put in an account, to be handed over when they’re 18. It’s a good idea, but can we really afford it as a country right now?
It would save large sums of money – around a billion pounds a year – it’s not chicken feed.
So what are the objections? Although I’m in favour of the change, you won’t see me arguing that these concerns are wrong. They all have something to them. My judgement is that the benefit we get from the change outweighs these, but you may feel differently.
But what if they lie?
The plan is to figure out which higher rate taxpayers have children…by asking them. Either in a letter or as a tick-box on a self-assessment form. Those who say “yes” will presumably have their records matched up with the child benefit records and their benefit stopped.
Fine, but what if they lie? The Treasury hasn’t quite figured out that bit yet, though there seem to be a few possible solutions with different degrees of complexity and cost.
It’s an anomaly captain
Simplicity breeds anomalies – small groups of people who lose out unfairly, gain unfairly or for whom the whole business just doesn’t make sense.
One of the reasons the tax system became ever more complex and labyrinthine under Gordon Brown was to root out these anomalies and try to cover every eventuality.
That isn’t being done here. This change is quick and dirty: save a billion a year.
If your earnings push you just over the higher rate tax threshold, you could find yourself losing money as the result of your pay rise. Indeed, if a single earner family with two kids was just below the higher rate tax threshold, they’d need to have a salary increase of around £3,000 just to stay even.
Then there’s the two-earner problem. If a family has two earners, both bringing in £40k, they get child benefit on a family income of £80,000. The single-earner family next door with one person on £45,000 doesn’t get a penny.
Don’t upset the middle classes
Another interesting argument against the change is that we need to give the middle classes something from the welfare pot, or they may turn against welfare altogether and the poor will suffer in the long run.
Split families
As people think about this in more detail, there will certainly be some oddities that are causes for concern. One is families where an abused wife is in hiding from her husband (or vice versa, though that’s rather less common). Can the husband stop the wife getting much-needed child benefit by dashing of a letter to HMRC?
More forms?
The Government seems keen to avoid big changes to the way Child Benefit is administered (sensible, as that would quickly eat up the savings). At the moment it looks like no-one who pays basic rate – or no – income tax – will have to do anything. That group continue getting child benefit as now without filling in a single extra form. That’s good, and it would be cause for concern if it changed.
Is it worth it?
Save a billion pounds a year without taking a penny from anyone genuinely in need. That’s the carrot being dangled.
If you feel the anomalies are so bad, or the implentation issues so troublesome, or the idea so just plain wrong that it outweighs the saving then fair enough.
I don’t. I’ve long supported universal benefits, not because I thought higher rate taxpayers needed them, but because the alternative was means testing which not only costs a lot to administer but leads to much lower uptake among the people who could really use that money.
This scheme has its faults – as they all do – but it seems to me to be worth going for.
Follow @libdemvoice.org on Bluesky
Like us on Facebook
Subscribe to our feed
Sign-up for our daily email digest
Six council by-elections, spread over two days
Carers remain forgotten in government's welfare overhaul
Steffan Aquarone's Commons debate on coastal communities
Getting things done - Saggar Street - an update #dundeewestend
Loving our neighbours
Getting the basics right
Roland
Joseph Bourke
Stephen Nash
Margot Wilson
127 Comments
To be honest I am not sure if this is a good idea or not. My concern is that like many other proposals it does not seem to have been thought through in detail or come as part of a more comprehensive package. Universal benefits are an area that need some sort of public discussion or even review before charging in with changes. Poor decision making on the detail of many proposals and the intention to cut fast and deep will increasingly undermine the Coalition.
I’m afraid I utterly disagree with you that this balances out. You have raised all the important points against this cut but the conclusion you have missed is how disproportionately it affects women. This lies within the single earner family issue, which you touched upon, because the vast majority of non-earners in that (substancial) bracket are women. In fact, CB was initially started to give those women some much needed financial independence from their husbands. In one stroke, this undoes all that good. I have also read that this cut also removes the NI contribution for those women, worsening the problem of mothers having no pension in later life.
Why on earth can’t the coalition focus on closing tax loopholes instead of going after women like this? Oh yes, because the Tory party is almost entirely comprised of rich men!
This is a misogynistic cut and I hate it.
I think we also need to broaden the focus of discussion from this particular change to the issues of principle.
It is de-universalising child benefit today, but what comes next? One could see this as a test case – in advance of a more fundamental assault on the structure of income transfers. Even if we are not too worried about changing eligibility for child benefit, it is the principle that is being changed/established that is important.
Presumably the Chancellor will take the political temperature of the reaction to this change with a view to the possibility of reneging on a range of other pre-election promises such as protecting the winter fuel allowance. Why stop there? There are all these households who have accumulated wealth over time and could self-insure against adverse life event. Why should the state support them as well? Do we really need a universal state pension? What about unemployment assistance – surely it isn’t unreasonable to expect some wealthier people to insure themselves against this types of eventuality? The state doesn’t need to. Etc. The fact that there are good economic (as well as social) arguments against this individualised approach won’t, I predict, stop the questions being posed. That is where the danger lies in terms of middle class commitment to the welfare state evaporating. If the only arguments that are mustered against these propositions are about perverse incentives then that is going to be a problem. A more fundamental argument about social justice and social cohesion needs articulating.
Obviously, the government aren’t proposing those things now (just to preempt comments to that effect), but I predict that is where we are heading. We might be sanguine about that prospect – but let’s at least do it consciously.
Nick Clegg, April 12th during his Jeremy Paxman interview on the BBC:
Iain, there is a worrying trend on LDV. You epitomise why the party is haemorrhaging support.
– Pre-election promises made
– Coalition agreement signed
– Pre-election promises broken
– LDV voice agrees with no dissent
This is the Coalition’s 10p tax rate. To have it 4 months after taking power is bad enough. To have it while the Lib Dems lap it up will be suicidal.
Thanks for your reflection, Iain.
I’m still to make my mind up on the announcement. The proposal will only affect a minority of claimants at the top. I guess it’s wrong to assume that most higher earners claim child benefit (although Cherie Blair didn’t have much of a problem with doing so!). With so few likely to experience any change to child benefit entitlement, will even the proposed change as it stands be cost effective?
I think some of the anomalies in the proposal you have referred to do need to be ironed out, for the sake of fairness. The way the proposal could be seen to penalise parents who choose to stay at home or work part time, while the other partner earns over £45k. Such a family won’t starve without child benefit, but will have a noticable drop in income, especially if child care costs are incurred.
Hi Iain.
I think the implementation is even more simplistic than you paint here.
In essence what Gideon has said is that:
– If you receive Child Benefit now, you will continue to receive it
– The CB claimant records will be matched with Income Tax records
– If you are in the 40% or 50% bands, you will have a corresponding tax rise to counteract the benefit
Hence why the anomalies will occur – because they’re really not all that bothered with making it fair – just with getting the money.
Ellie’s point is solid and I would clearly say that targeting middle class women for your first benefit cut is a piece of good politics. The CB is a convenient cover for the cuts to come and these will attack many more people much poorer. This cut allows the ‘we all in it together narrative’ to continue, although being told that by a couple of millionaire Old Etonians may not be their soundest tactic.
My question is this, when will the Lib Dem part of the coalition make its voice heard? Is no-one going to speak whilst the post-war consensus of the welfare state is dismantled?
right in principle, wrong it its execution.
it is indeed right that those on £44k-plus – lest we forget that’s double the median UK salary – should get fewer State handouts – but child benefit must be kept universal. To square that circle, simply tax child benefit progressively with income – as proposed by the IPPR and re-affirmed by Liberal Democrat conference in passing the Social Liberal Forum motion Fairness in a Time of Austerity.
not only does this avoid the issue over means testing (which Osborne has avoided too), it maintains the crucial underpinning values of the welfare state – that of universality in particular.
It is my understanding that CB used to be subject to a tax clawback – any advance on that?
It does seem surprisingly ill thought out. Simplicity is one thing, but how complicated would it be to apply to apply a threshold based on the combined taxable income of the parents rather than their individual incomes? Would it even be that complicated to apply a taper based on the combined income, considering that we have these wonderful things called computers to do the work for us?
And then there are the pledges made before the election _not_ to cut child benefit. Idiotic pledges to make in the circumstances, no doubt, but it concerns me how readily people seem to be accepting promises casually broken within a few months of the election.
I’d like to echo the point made by Cuse:
I understand that we are the weakest partner in this coalition and we cannot get our way all the time, or even very often, nor can we stop every Tory policy we dislike. But we really need to start standing back from those policies with which we do not agree and were unable to get the Conservatives to alter.
This coalition can and should work, but it will collapse if we are not allowed to point to the differences in our policies and stand apart from those decisions we disapprove of. I do not get the impression that the Tories are particularly against us doing that, it seems to be more that our own party lacks the will.
Oops, I think the point I was echoing was actually made by Ian, but you get what I am saying!
certainly the method is very clumsy.
Now have noticed (and maybe it is the reporting) a gender devide on this with a pragmatic acceptance trend in Male and a dislike in Female.
In any case no consideration of the rerasons for universalty seem to have been addressed juist put forward as a pragmatic cut. Now it may be that there is no longer a need to have a benefit that goes straight to the Mother on equalty or womans rights grounds (sort of thing) but it would have been nice to see a proposal put forward in a deligant manner; to see if it has unintended consequances or to see if there is something that was provided by the old way that needed preserving in the new way.
Ellie,
I struggle to understand how cutting a benefit for the very well off disproportionally affects women. Only households were someone earns more than £44k pa are affected, this broadly is the top 10% of household incomes. The change change affects both single parents and cohabiting parents. Single fathers and single mothers are treated the same – if they earn less than the threshold the keep child benefits or else they loose them. Single income cohabiting parents are treated exactly the same. If the single income exceeds the threshold, they lose the benefit. Duel income households where either parent earns more than the threshold lose their benefit. The only gainers are those households whose combined income is greater than £44k but neither individual exceeds this level. So far, mothers and fathers are treated the same.
I can only see two possible scenarios where your complaint may hold. The first is that you believe the number of single mothers earning over the threshold is greater than the number of single fathers earning the same amount and you feel this is unfair to women. I don’t accept this. Income thresholds are about what you earn, not who you are.
Second are households where the father works and the mother stays at home, but the father keeps his earnings for himself, leaving the mother to survive on child benefits and a small allowance. In the 1940s this may have been a problem. Is it really so today? Perhaps I’m a bit odd in having a joint account.
There may be something I’ve missed so please let me know. I genuinely cannot see why this change is unfair for women specifically.
The principle seems fine, it’s the execution which is wrong (and that comes from someone who won’t lose out.)
However, if we accept the principle here, then we must also look at the other universal benefits. Why, for example, is there still a universal state pension? Many people retiring now still have the “gold plated” final salary schemes of yesteryear, even if they work in the private sector. Does somebody with a pension income of £25,000 per year, no mortgage (which is the case for many, if not most,) and a higher personal allowance if over 65 really need another £5077.80 if they’re single or £8119.80 if they’re married – and that’s before any winter fuel allowance? Remember, the Government considers an annual income of £10792.60 (minimum wage based on 35 hour week over 52 weeks) for someone who’s working to be acceptable, and even if you increase that to a “living wage” of £7 per hour, that’s still £12740 per annum.
In fact, it’s acknowledged that by maintaining a universal pension, we’re stacking up problems for the near future when there simply won’t be the tax income to pay for it (and that was before the economy went belly-up.)
Frankly, if we’re going to look at child benefit because some people don’t need it, then for the same reason we have to look at pensions.
@ellie
“This coalition can and should work, but it will collapse if we are not allowed to point to the differences in our policies and stand apart from those decisions we disapprove of.”
why not go further and say
“and if not expressly stated in the coallition agrement abstain or oppose”
surly the broad statements within the agrement were not blank chequs and the LD can do this?????
@Ellie there’s nothing to stop an unemployed woman still claiming the child benefit. It will just be deducted from her husband’s wages. So it needn’t change anything in that respect.
Colin
“There may be something I’ve missed so please let me know.”
I think the point is that it normally goes direct to the mother.
I very much agree with Ellie and with Prateek Buch.
The proposed changes in child benefit weaken the principle of universality which is a core value of the welfare state. It has been said that benefits for poor people only are poor benefits.
If child benefit is restricted to parents who need it, how far do we go down the income scale to determine which parents would receive it? Those earning £30,000 a year – most probably no, £20,000 – borderline – £15000 – probably yes, – £10,000 -yes. So using the needs argument for payment of child benefit would restrict it to parents earning say £15,000 a year or less, or to those earning the median wage or salary.
Anthony Aloysius St
“I think the point is that it normally goes direct to the mother.”
But it isn’t Mother Benefit, it is child benefit. If it were Mother Benefit then it would be quite sexist. It is for FAMILIES with children not for one specific parent. The cut if for high income HOUSEHOLDS not high income mothers. That argument just doesn’t hold.
@Anthony Aloysius St
Posted 5th October 2010 at 9:00 am
if a public pledge is made clearly and unambigously (as in this case) surly it would be in order not to back this policy, and indeed vote against it becouse it was not expressly in the agrement???????
Colin
Just trying to explain. I thought maybe you had missed the practical point about child benefit being paid direct to the mother.
tony
I suppose there are two issues here. First, whether the government should cut child benefit having pledged only a few months ago not to. Put in those terms I think the answer has to be “No.”
But then there’s the wider question about whether universal benefits should be preserved in principle. I’m not sure that’s possible without increasing taxation, and that seems to be an option that none of the parties will countenance. Actually, I think both these questions are essentially about the honesty of politicians.
@Colin I think Ellie’s point is that one of the key reasons Child Benefit was established as a universal benefit paid to the mother (except in the case of single fathers) was that there was a serious problem with men not giving their then non-working wives enough money to feed and clothe the kids properly.
If there is evidence that this is still a problem nowadays in high income households then that would be a good reason to question this decision. If not, it isn’t.
Liberal Democrats purport to be concerned with fairness. This proposal is NOT fair. How can it be fair to children and families to withdraw the Child Benefit from families where one person earns over £44,000 and not to withdraw it from families where 2 people earn just under £44,000
@ Cuse – this is not the coalition’s 10p tax rate, because unlike that it doesn’t affect the least well-off.
Indeed, it actually only affects the most well-off in our society.
All that concerns me slightly is the plight of single-income-but-higher-rate families – as compared with dual-income-but-not-quite-higher-rate familes. However, I don’t see anyone currently complaining that a single parent earning £50K a year pays higher rate tax on some of that income, whereas a couple earning £30K each don’t . . .
@ Grace, because the alternative is to means test and waste more money on that than we might otherwise save?
I’ll re-phrase your question, and ask you:
Is it fair to levy higher-rate tax on families where one person earns over £44,000 and not on families where 2 people earn just under £44,000?
grace
“Liberal Democrats purport to be concerned with fairness … How can it be fair to children and families to withdraw the Child Benefit from families where one person earns over £44,000 and not to withdraw it from families where 2 people earn just under £44,000”
Short answer – it isn’t. The principle of withdrawing benefits from the most well off is fair. The way this proposal is drawn up clearly isn’t. I think George Osborne needs to re-work his idea. If not, the Lib Dem part of the coalition needs to make him. Simplicity is a good thing. The glaring hole in his policy is not, even if it does only affect a very few families.
I can only think that he worded it the way he did to create a public debate about high income families. He’s certainly done that. Perhaps he has a better version of his policy up his sleeve to be used once he’s created a bit of a news storm. Well I hope so.
Why is it fairer to raise the additional revenue my what amounts to a poll tax on higher rate tax payers with children than using the income tax system to spread the additional burden across all higher rate tax payers according to their ability to pay. Fairness applies between higher rate tax payers just as much as everyone else.
As for not understanding what Beveridge said about universal benefits!
@Iain
A surprisngly well balanced article infinately better (in my opinion) than some of the others you’ve written.
I am against it in principal becuase I fully believe that people with families should be given some help . 44K and single is a life of forign holidays 44K and 3 kids is not.
However with difficult choices this is something that is probibly bareable DURING THE CRISIS.
Where the coalition is going wrong is by NOT saying that this change is temporary . It makes it look like a Tory plan to dismantle the welfare state . Remember that the 50p tax rate is supposed to be a temporary measure . So if temporary measures are fine for those on 150K why not for those on 45K and with families.
If you take my point on board hey we might actually agree for once. Sadly I will be surprised if Nick and dave feel the same as deep down they may well be treating this as a way of eroding welfare rather than cuts.
DOES IAIN OR ANYONE ELSE THINK A TEMPORARY MESURE WOULD BE BETTER ?
If you are £1 over the HRT threshold and so become say £1800 worse off because you lose CB, you could always give £2 to charity via gift aid so that you are no longer a HRT. In that sense there is a 100% tax rate on families for £3k of income, but it is wrong to say that there is more than that.
I think that I should lose it – it makes no sense to pay benefits to people like me. But abolishing it altogether and merging it with the new universal benefit would have been better.
Oh and lets not forget the little point that none of this was put before the electorate.
Grammer Police – Is this the response you will give to people on the doorstep when canvassing ? They are going to want to know why attack Child Benefit at all when Banks and bankers (ie the really well off) go relatively unscathed.
I want to echo what’s already been said. I agree in principle to the idea of it but I think it has been woefully ill thought out when you look at the detail it falls apart.
The fact that two earnings of 43K will still get the benefit but one of 44K won’t is particularly ill-conceived. As this will no-doubt impact the greatest on single parents or single working partners however I do think it is ridiculous to bring up the 1950s argument of the wife/mother having to survive on Child Benefit to keep house.
our MPs must ask them to look at it again to iron out what are pretty big kinks. An why was something as massive as tailoring back one of our oldest universal benefits announced at a party conference rather then parliament?
@Anthony Aloysius St
raising tax has been needed for decades IMHO.
yes your points make sense
however my point here is that the agrement here does not morally bind the LD to support this cut, nor does it morally prevent them from voteing against it, personally I don’t trust the Tory’s (and can’t fathom out why this deal was done) however I do not think that the deal is a blank chq, I do think that it there is a clear logic to say this is outside the deal and that if the LD chose to oppose it then that is thier chioce.
Conversly I see a real danger in just accepting this as it could be read to be inplied by the agreement even though it was something expresslydenied by the parties before. If this was in contract law there would be a very good case for saying it was a breach of contract, fraud, breach of Estoppel etc etc and therfore I really think there can be no moral compulsion to vote for it.
The chioce that the LD party is does it think that this proposall is good or not, very simple and then either support the gov or say it is crap and oppose them, or sit on the fence and support the gov that way.
Overall I think this is a reasonable policy with some flaws in the detail.
It seems barmy to me that we now have a welfare system that pays several thousand pounds a year to households in the top 10% of incomes. Is that really what the welfare system is for? In my view this is a reasonable way to cut Government spending as part of a necessary package of cuts and in the long run, as things get better, the system can be recast to focus on those in need.
There is an issue with the anomaly, although it is being overplayed. Single parent households on £44K are not badly off, many will receive some support from the other natural parent, and there are probably not huge numbers of households with two parents each earning £43K. However, if a way can be found to deal with this issue then that would be good, possibly by combining it in with the broader (and sensible) changes to the benefits system envisaged by Iain Duncan Smith.
The other issue this raises for me is how far away from reality the response of much of the media and commentariat has been to the £44K income figure, with it being routinely described as ‘middle income’.
This is utter nonsense. £44K is a high income, in the top 10%, it is twice what the bulk of people earn, it is more than enough for anyone to live a reasonable lifestyle on. Some people will clearly lose out from this change, but no-one will be living in poverty as a result. (In fact it will help reduce income inequality at a stroke)
I do wonder whether there ought to be a policy at the Guardian that any writer commenting on tax and benefits should have to declare their own household income so that we can understand their perspective better!
The Orange Tories 2010 election manifesto promised to support existing childcare support arrangements. Funny way of doing it! I heard a Blue Tory say on the BBC Politics show last Sunday, “If you can’t feed them, don’t breed them.’ Nice people the Orange Tories have got into bed with!
@ many
As I recall the traditional way of readdressing these inequalties was via the Tax ststerm that is a progressive tax syterm kind of smothedv the way on universal benefits high tax earners would pay more tax would it not be just as simple to raise tax?
as it clearly is just as simple the Questionas to why this is not being done comes to my mind, that is why cut universal benefits ainstead of raising tax ? to which the answer is that that is not what the Tories want to do, now is ity what you agreed to and is it what you want????
This debate does raise a bigger question. Should we be taxed as individuals or as households? There is no end of complaint that a couple earning £43,000 each pay a lower rate of tax than a couple who have a single income of £44,000. There is also a complaint that withdrawing a benefit paid mostly to mothers is unfair (though no complaint that paying a benefit to mothers is also unfair). Perhaps the solution is to tax the household as a single entity and give benefits in the same way.
Personally I oppose this. I would rather tax and benefit individuals regardless of their spouses income but I acknowledge this too has its problems. What do you think?
@toryboysnevergrowup To be fair, neither was the financial mess this measure is helping to clear up.
No cut or tax rise is easy, but we have a £109bn structural deficit to fix.
I know opponents of the coalition hate the phrase “there is no alternative”, but, really, if we’re not to touch universal benefits, we do need to hear alternatives that will raise serious amounts of money.
This change will be cause a significant cut in the standard of living of single earner households with an income of 43k. They have less income than a dual income family with two salaries of 22k. And, if they have a heavy mortgage, they won’t have a lot of disposable income, so this cut will hit them hard.
But if we’re not going to save this billion, we have to save a billion somewhere else. Where do we want it to come from? Further cuts to local authority grants? Fewer police officers? Or do we want to defer the cut for six years, so a future government has to make the same cut, plus interest.
It’d be great if the easy suggestions to raise money were practicable. If there were easy, cost-effective, ways to cut tax evasion. If there were ways to tax the rich heavier without causing capital flight, and reduced tax income. If we could hammer the bankers without damaging the City of London. But I fear there isn’t.
Personally, I’d prefer to raise the basic rate of income tax, but that option is closed to us by specific past commitments from both Labour and the Conservatives.
I’m afraid the country faces very hard choices. And this cut is much less hard than some of the excruciating decisions that are going to be announced shortly.
Removal of child benefit for high earners is long overdue. I really dont understand this “unfair on a single earner” bo11ox. Incase the world hant noticed, people are taxed individually, which means that two earners of £40k are already way better off than a single earner of £80k because of income tax bands. The difference is over £5,000 in take-home in fact! I dont seem to remember the Daily Mail squealing that this existing setup is totally unfair on stay at home mums.
Those people desperate to avoid losing the benefit at £44k can just increase their pension contribution to lower their pay. Bingo.
If the Daily Mail was being honest to its usual attack line on “whinging benefit scroungers” it should right now be attacking those £50k earners moaning about having to shoulder their fair share of the public debt: “Waaa, waaa, I only earn £50k and I need my benefits to get by – I cant live without them! Waaa! Waa!”
Where is the Daily Mail we know and love? Oh yeh, I forgot – it’s actually nothing to do with fairness, it’s just about their own readers (a very small number of them) getting hit for a change.
As for the principle of “universality” I really think that child benefit – a post-war gimmick to encourage procreation – is very different to pensions. For starters, plenty of people dont have children, but nobody doesnt get old.
Liberal Neil
The OBR reported after the election that the deficit was about the same size as was reported during the election and during the previous Budget. You may also wish to not that the LibDems specifically said they wouldn’t seek to remove the deficit over one parliment – and the Tories only promised to reduce it signifcantly and more than Labour.
@MBoy
“Those people desperate to avoid losing the benefit at £44k can just increase their pension contribution to lower their pay. Bingo.”
I look forward to you telling that on the doorstep at the next election – families with children earning around that level will often not have the disposable income available.
“For starters, plenty of people dont have children, but nobody doesnt get old.”
When you find yourself typing nonsense like this, perhaps it’s time to lie down for a while in a darkened room …
@george
I really am tireing of this Tory lin I keep hearing “labours debt”
is this the same debt that is in greece ? is it the same one in ireland or spain or in anyone of the dozens of countries in economic Sӣ$ street no. Lets remember there was an alternative toi the current reduction, your party had this as its policy, during the worst days of the greece thingy there was an effective lame duck admin here and we did not collapse.
furthermore it is not labours debt it is as a result of a global reccession slump and Labours response to that, in time and not much at this rate this will become plain. The response was to support the economy and that cost money (even if I agree (and I do) that Labour should have raised higher tax prior to this in the good times (indeed this would have been putting right the fact the Torys did not do this before them)) the spectre of a double dip was rased prior to the election by GB know this is going to happen due to the cuts and you guys are really going to look silly (becouse you did a silly thing that only serves a narrow part of your party) in changing policy.
The downside will come when opinion changes and we are stuick in reccession with America pulling out following policies advocated by no other than Gordon Brown and the Labour party, I am certain that this will be the narrative that transpires and you will look silly with the orange flag on the Tory poll.
It strikes me that there are two points that should worry us all no matter what side of the argument your on, whether you support universal benefits or not
1 That this has been thought out by our chancellor, the person responsible for our finances, surely he must of realised how the would figures pan out, he must of seen this as unfair to say the least, if he didn’t then we are all in big big trouble.
2 A shift in the principle of universal benefits of this magnitude should not of been announced in the media first, it should of been discussed fully in Parliament. It makes me wonder what else will be announced in the coalitions name without proper discussion or recourse
@nige
point 2 is why (in part) I believe it is valid for the LD to oppose it and vote against it.
it is outragouse for the LD party to be bounced into this if they don’t agree
@tony
“Furthermore, it is not Labour’s debt”
Were you responding to someone else’s comment? I didn’t mention Labour at all. I just talked about the £109bn structural deficit, and asked what better alternatives there were to saving £1bn.
@ George
the £109bn structual deficit that has been labeled Labours debt (falsly), that when reffered to in the context you brought it up (that is as a justification for a Tory cut annonced at a Tory party conference) , and with an explicit agrument that says these cuts need to be made appears to be the one you a are putting on it.
what would be better to raise £1bn or indeed more would be to raise tax for the better of, this used to be LD policy I think, however now that the policy is to rubber stamp all Tory deccissions on revenue matters I suppose that is out the window.
My point is this was not part of the agrement therfore you can vote against it if you chose, it is deccission time is this something your party agrees with, oppossess or is prepared to be bounced on????
@tony: in what way is removing a benefit from the wealthiest 10% not equivalent to raising tax on the “better off”?
“Personally, I’d prefer to raise the basic rate of income tax, but that option is closed to us by specific past commitments from both Labour and the Conservatives.”
That seems an odd thing to say considering that cutting child benefit was also specifically ruled out by George Osborne before the election.
@mboy
in that not all of the wealthiest 10% are in reciept of that benefit as they may not have children.
my primary point is this that even if this policy is the best thing in the world(and it is not) niether party had it as policy prior to this week, it was not part of the agrement, nor was it part of either partys manifesto, therefor the LD are perfectly within thier rights to tell the Torys where to shove the thing if the LD want to.
I’m a so-called edge case. I currently earn a few quid short of £44k, but by 2013 I’d expect to be just north of it. I have two young kids, and my wife doesn’t earn. Of that £44k I actually take home around £32k – which is much less than we’d take home if we were both earning the median wage – so the £1700 per year we’ll lose sure ain’t sweety money – it’s about 5% of our disposable family income.
I’m not claiming poverty, but we’re hardly swimming in cash either. We rent – because there is no realistic prospect of our being able to buy a house. We drive a 10 year old banger. We haven’t been on a holiday of any kind, let alone a foreign holiday, since before our first one was born five years ago. We live from hand to mouth most months because what I bring in just barely covers the essentials. I’m not complaining about any of that – we knew things would be tight when we decided that my wife would stay at home to raise the kids rather than dump them in daycare and return to work but figured it was a price worth paying – but the point is things most certainly are tight, whatever percentile my salary says I’m in. This will just make things so much tighter.
It it unfair that we are receiving these benefits in the first place? I can see that there’s at least an argument to made there. But being one of those directly affected I think I’ll reserve judgement on whether we’re really “all in this together” until we see who else is getting hit, and how hard.
It semes absurd to me that I am paying tax so Nick Clegg can recieve child benefit for his three children.
Ok, so Mr Clegg has an income several times mine, so I might be biased. Even more absurd is the idea that stopping Child Benefit for Mr Clegg is an attack on his wife who has an even higher income than Mr Clegg.
Universality is not a great principle if it involves the state taking my tax money then giving it back to me, minus admin costs for no real purpose.
If anything the proposals don’t go far enough. Better to get rid of child beenfit all togther and reintroduce a 10p tax band with the savings.
MBoy
“in what way is removing a benefit from the wealthiest 10% not equivalent to raising tax on the “better off”?”
In that child benefit is only given to those people who have school age or younger children. Those earning above £44k who do not yet have children or who have grown up children do not receive the benefit.
@Mouse – good post.
I see nothing intrinsicly flawed in universalty as long as there is a progresive tax systerm then the imbalances spoken about above are ironed out.
if this is such a great idea why was it not such a great idea when the manifestos were written or when we had the election???
A few on this thread are resorting to weak, tribal, divisive + disingenuous arguments seemingly to avoid the strong arguments against the benefit reductions, something along the lines of
“Well, we’re sorting out the mess left by Labour”.
It doesn’t stack up. Why?
– Its being introduced in 2 years – why not now if the need is so great?
– Its a choice of Cameron + Clegg to remove universality, not a cause + effect principle.
Yet more of the Liberal malaise – you got into bed with the nasty party and you refuse to countenance disagreement.
@Cuse: Is it beyond your comprehension that many people might not agree with taxing the whole population in order to give £thousands back to the top 10% of earning families? It is the Labour Party who are transparent on this one.
“Is it beyond your comprehension that many people might not agree with taxing the whole population in order to give £thousands back to the top 10% of earning families?”
Apparently it was beyond the comprehension of the politicians who pledged not to cut child benefit when they were looking for votes earlier this year …
To take a specific example, here’s what Nick Clegg said on the Politics Show on 7 March:
“There are some benefits and I think child benefit is one of them, where actually I think it’s quite important that everybody, rich or poor, wherever they live, feels they have got a stake in it.”
http://www.mirror.co.uk/news/politics/2010/10/05/how-condem-government-has-changed-its-tune-on-child-benefit-115875-22610078/
Perhaps we can look forward to another of those interesting explanations of exactly when and why he changed his mind about universal child benefit.
This policy is an attempt to recruit more people to the campaign against universal entitlement to benefits, plain and simple. From your article it seems to be working.
If you don’t need it Iain, don’t claim it. In this big society that we are all supposed to be moving into, why is it only the civic responsibility of the poor we are calling on, why not the rich as well? We could maintain social cohesion and universality if we were to ask those who don’t need child benefit to give it back if they already claim it or not claim it in the first place. We are more than willing to look judgmentally on the poor who willfully or negligently claim more than they are entitled to, why not negatively judge the rich who claim it, ‘just because they can’? Why are we ditching a principle of universality and fairness and justifying it as ‘we can’t afford justice and fairness at the moment’, just because of these selfish rich folk who wont act voluntarily in the interest of the country? Similarly we could ask the wealthiest to volutarily contribute a portion of the wealth they are sitting on in assets and savings to the exchequer to pay off the deficit, they have more than enough. But we don’t ask, why? Because the policies that we are pursuing are those ideologically designed to see off the welfare state once and for all and have nothing to do with the deficit. How long will it be before the statements of ‘I don’t see why I should get this when I don’t need it’ turn to ‘I don’t see why I should pay them to have babies when they obviously shouldn’t be having babies they can’t afford to keep’?
The apparent selflessness of the desire not to take what you don’t need from society is false. It is a cover and a precursor to questioning the needs of others whose lives you can’t possibly know but wish to judge anyway. It is this willingness to judge the worthiness of others that is being preyed upon in this ‘reform’ and it runs through the subtext of your article and through the coalitions policies on health, education and welfare. If we spend our whole time trying to make sure some fabricated idealised scrounging person does not get slightly more than they are entitled to from the benefits system or we simply focus on making sure those in need are not left short (by the way, need is always genuine), we are not working towards justice, fairness or equality only alleviating the worst effects of inequality. Liberalism is a philosophy of equality and justice not of petty qualms about whose need is genuine and whose is not at the bottom of the pile. Social justice is not dependent on societies wealth. Child benefit is a recognition that we are all morally equal, as children at least. It is a social embodiement of liberal equality, saying symbolically that we are not only equally entitled to life we are equally entitled to the means by which to live. As is universally free access to health care, which will be next in line for questioning when you decide that you can afford to pay for yourself so why should you be taking resources from those in ‘genuine need’ when you could be paying, going first with the best of the surgeons available and leaving the rest to queue behind you secure in the knowledge that you didn’t take something you didn’t need. Furthermore why should that other idealised person who looks superficially just like me not be forced to pay because I can afford it and volutarily do so?
The money raised by capping child benefit could be raised much more easily with a smaller rise to taxation for everyone in this tax bracket, so why not do that? Why focus this tax rise on people with children? Why are people with children being targeted in housing benefit reductions and social security caps? There is no need for this apart from ideology, the ideology is that universality is wrong and that the state has no business in trying to promote equality. The housing benefit and welfare cap policies look designed to discourage poor people from having children. At the same time those who are paying taxes are to be financially rewarded for being married. Why might we want to engage in this kind of social engineering?
So instead of converting the tools needed to institute social justice into methods of providing a bare minimum safety net to stave off no more than the worst effects of destitution in order to solve the deficit problem, why not call on the good will of the people with the most wealth to voluntarily offer up a small portion of the wealth that they have accrued through simply being wealthy in the first place? Wealth that they are less entitled to than anyone who ever claimed child benefit or any other benefit for that matter. No need for tax rises at all, the deficit could be wiped out at a stroke simply by those in the wealthiest 10% of society who have on average around £4,000,000 each sitting stagnant in their bank accounts or assets donating a few percent of it each to the exchequer. Now that would be a Big Society in action.
Or we could just tax them. If there isn’t enough support for that then I’m sure it wouldn’t be hard to find enough of them who would do it voluntarily to start a campaign based on claiming that ‘I didn’t need that extra £x00,000 why should they get to keep theirs?’
IainM wrote
‘It it unfair that we are receiving these benefits in the first place?
Firstly I must say I am not affected by this as I’m not in that bracket (I wish I was) however I am personally unsure whether child benefit should be cut at all, maybe it should be kept universal as it’s an acceptance by the state that it has a stake in the child as well in so much that he/she are future tax payers therefore contributing to the welfare of us all in later life, if you consider this the argument about the unfairness of high rate tax payers receiving CB becomes less compelling.
@JRC
Good post
Mboy
If you want to debate, debate. Don’t resort to changing the issue every time some awful truth confronts you. I feel that most LDV threads follow this narrative:
Tories: “We’re cutting Child Benefit”
Me: “OK – but your measure is unfair”
Liberals: “We’re sorting out Labour’s mess”
Me: “OK – but how is it fair”
Tories: “We’re saving interest payments”
Me: “How is it fair”?
Liberals: “Gordon Brown”
Me: “It breaks another Clegg promise”
Liberals: “We stopped the Contact Point database”.
You have lost your way – and the electorate knows it.
It has always been unfair that people earning the minimum wage of less than £6 per hour should be taxed so that high earners in the top decile should receive hand outs. The implementation of this change are not ideal, although I am prepared to accept the argument that applying the tax change or means testing the benefit per household rather than per individual might lead to an undesirable increase in bureaucracy. I applaud the courage of the government in taking this step, full in the knowledge that the moaners will seize on it.
I am appalled at the stupidity of some of the usual Labour trolls, who would prefer tax increases for the poor, rather than tax increases or benefit cuts for the wealthy. The mentality is simply …. mental. We had years of such policies with that imbecile, Gordon Brown, who was quite happy to raise £5 in extra taxation at a cost of £2.50, in order to hand out £7 in benefits, provided he could borrow the difference. A ruefully corrupt form of political economics.
Given that the check is simply a check box “Do you earn more than X” why not change it to a checkbox “is your combined income more than X”.
I’ve no real issue with scrapping the child benefits for families earning a set amount, but this implementation is completely broken.
Michael – there is no checkbox.
If you receive or apply for the benefit + you are in the 40% bracket, your tax will will go up to match it. Or you will add it to your self-assessment return.
It is that rudimentary.
@George
Why not have the courage of your convictions? Re-instate the tax on banker’s bonuses, raise income tax and for good measure scrap the 3 billion quid nhs re-organisation. Then we can look at fair reductions in universal benefits.
There is no point in being in politics if your choices are wholly constrained by the policies of the other two parties. If we are all in this together how come people like me (high earning, no kids) are getting off scot-free? The debate should start with reversing Gordon Brown’s income tax cuts. It’s simple and fair whereas it’s extremely difficult to be both if you start tinkering with universal benefits.
If this was really being put forward as the lesser evil in terms of the deficit-cutting options, there might be an argument for it. But it isn’t.
It is being done so as to enable IDS to increase benefit payments to people in work. That is not worth it. Subsidising employment with state benefit payments is misconceived. It helps employers drive down the low wages they pay, so that the employee ends up no better off. It risks becoming part of a protectionist state subsidy for UK employment, to be matched by similar beggar-my-neighbour job subsidies from our competitor nations.
We haer a lot of emotive stuff about the poverty trap. The truth is that although a high marginal tax rate for the low paid is not pretty, it is the least worst option. “Solving” the poverty trap only causes more problems, which is why Labour gave up trying, and we would be wise to do similarly.
Was it my imagination or did LibDems only two weeks ago pledge to protect universal benefits at their conference. And Clegg sat there in the knowledge that this was to happen.
I earn £47k. I have three children and as the youngest is not at school my wife stays at home. So 5 of us live on one salary. We have no foreign holidays, have one rather old car and are currently only able to pay the interest on our £150k mortgage for our £250k house.
Tell me why I am better off than a couple with 2 kids earning £30k each or a single bloke earning £25k. Because when I was a single bloke earning £25k or part of a two-income family I was a lot better off!
jayu wrote
Was it my imagination or did LibDems only two weeks ago pledge to protect universal benefits at their conference. And Clegg sat there in the knowledge that this was to happen.
Correct, now that was an easy question, how about a harder one like how much credibility does Clegg now have in 1, the Party and 2, The electorate as a whole?
@jayu
LibDem’s are in the first phase of an illness of denial sometimes called Newlabouritis, It isn’t terminal but quite soul destroying.
I can not understand the lack of response from Lib-Dem MP’s in the news with regards to these changes in Child Benefits.
It strikes me as very odd that when Nick Clegg was first asked in Brussels yesterday to comment on the chancellors announcement, He said he was unaware of any such announcements and would need to talk to Downing Street before he commentated.
His Office later releases a statement saying that Mr Clegg was aware of Mr Osbourns statement.
Then their has been a distinct lack of response from Libdem MP’s. Considering the party conference voted last week against changes to Child benefit this is very odd.
Now to top it all off their now talking at the Tory Party Conference of introducing the married tax allowance. Something else that the Lib-Dems are not signed up to in this coalition.
It seems to me as though the nasty party are already showing their true colours and their total disregard towards libdems, their coalition partners and what they real think of Lib-Dems.
When are some Lib Dem Mp’s going to start coming forward and giving some honest opinions?
I somehow doubt that this will actually go through in the end and to be cynical was it only announced as a smokescreen to cover the benefit cap? This topic is causing furore because it is affecting the middle class casting the cap into the shade. It was foretold that as soon as they were targeted they would scream blue murder but they did not give a damn about the affects of the budget on the poor and the horrendous fall out there will be from the cap . I believe in universality though I do find it hard to sympathise when there is such a callous attitude towards the disadvantaged.
“It has always been unfair that people earning the minimum wage of less than £6 per hour should be taxed so that high earners in the top decile should receive hand outs.””
While I’m not about to man the barricades over this calling it a ‘hand out’ is pretty inflammatory. Higher rate taxpayers are net contributors to the nation’s coffers. Child benefit for these people is more like a tax allowance than a benefit.
You get to keep more of your own money in recognition of the extra cost and responsibility of bringing up your children. It’s sophistry to claim that those on minimum wage are subsidising this ‘benefit’. Higher rate taxpayers are still putting more in than they get out. A family of five living in London with a sole albeit well-paid breadwinner is going to be hit hard by this.
If you want the wealthy to contribute more then raise their income tax. It’s the fairest way.
AndrewR: Income tax on the wealthy just went up to 50%. You think it should go even higher?
I’m a strong supporter of the principle of universal benefits so I oppose this move. First child befit, then winter fuel payments then pensions and all of a sudden you have demolished the universal benefit system and undermined a key principle of all people paying taxes and all people getting benefits.
I suspect very strongly that this was a rushed policy to take attention away from the very chilling Channel 4 Dispatches programme which pretty much laid out the extent of the power of the Murdoch empire over our Govt and Police. Would Cameron be allowed to get rid of Coulson even if he wanted to? Doubt it. Does Clegg bow down to Murdoch too? Will our MPs have the courage to stand up to Murdoch’s empire if the govt will not and if they try will they be destroyed by Rebekah Wade/Brooks?
Will Nick Clegg have the courage along with Cable to do the right thing to protect our democracy before it’s too late. We need an independent PCC. Come on Nick!
Liberal Neil,
I think you miss some important distinctions. My gripe with this is the assumption that a household with one income (and this does not have to be single parent families – not everyone in a relationship can always work) loses the benefit where a hosuehold with 2 incomes will not if, individual incomes are <44K. While there may not be many houseolds with 2 incomes of 43K there will be very many with 2 incomes of 25K each. This is very much "middle income". Why should they recieve the full benefit where the household containing the childen in question has an income of 50K where the single income household with 44Kdoes not?
@MBoy
Increasing the 50% rate is hardly the only option. This cut is effectively a tax rise for the well-off. Don’t seem fair to me that people in my income bracket with kids now have to make exactly the same contribution that I do. I could happily and easily pay more income tax.
Val – well said.
Peter Oborne conveyed not only a sinister link between Cameron + Murdoch – but a terrifying one which has grave ramifications for the very democracy that Liberals strive to protect.
My guess is that Cable will do what he is told to do by Cameron, Clegg + Osborne – bow down at Murdoch’s feet and let the BSkyB takeover happen – at the same time as crucifying the BBC.
@JRC – Great post – Good to keep opening up the discussion to the bigger picture and exposing the narrowness of some of the arguments advanced by the government.
“If you receive or apply for the benefit + you are in the 40% bracket, your tax will will go up to match it. Or you will add it to your self-assessment return.”
It seems that it hasn’t even been decided whether it’s going to be done like that or whether the benefit will be cut off at source. Another indication of how half-baked this policy is.
I really think that the idea of universall benefits go hand in hand with progresive tax, that is sure peeps who are higher earners benefit from a) child benefit and b)state pensions but they alsdo contribute more in taxation, it is only if the tax burden is not progresive that low earners sub the rich. Now tghis measure is set to achieve 1bn I ask myself about the other 80bn.
this measure was not a measure put forward by the LD, it was not put forward bt the tories untill yesterday, it was not part of the coalltion agrement therefore you guys can vote against it can’t you.
So I ask is this a LD policy now????
I can go on to ask
who makes LD policy?
is the LD party relavant?
is the coaltion agrement relavent?
why the hell did the LD sign it?
The removal of child benefit, from 2013, to those on higher tax threshold reflects fairness and moral equity.It is clearly done in the spirit of Liberal principle and is necessary to pay down the national deficit and to help relieve child poverty for the two million children living in workless households, at the bottom of the ladder.
It also sends a message to the worst off mothers and parents intent to improve life and educational chances for their children who will also be beneficiaries of the new L/D abolition tax policy on the first £10K of earnings.
Nick Clegg`s speeches at numerous rallies and hustings have unequivocally stated his support for a concerted campaign to abolish child poverty for the worst off families via the new investment of the `pupil premium’.
The Remembrance Day Services to be held on Nov. 11th will mark the 90th year or anniversary of the Royal British Legion.This will be time to honour and remember and salute those who made the ultimate sacrifice for their Country and today`s children.
Many ex-servicemen in 1919 came home to discover a life and legacy of unemployment for themselves,spouses and their children.There was no child benefit then or and moreover often no social housing provided them,despite Lloyd-George`s pledge of `Homes Fit For Heroes’- that still in 2010 has to fully honoured.
Many higher tax payers today, do not use the CB for immediate daily expenditure on behalf of their children`s needs..Many parents do not claim it and others sequester it into a separate pot, that is either paid out ,as a family present, at age 18,to their children or it is spent on a holiday.This is not what CB is intended to do.Whereas, the really Needy families actually rely upon CB each month, to feed and clothe and buy expensive school uniform for their children.
The mean of higher tax earners is much higher than the £44K and is £75K.
Ther are circa £1.2 m families who will lose out on CB but the vast majority will not miss it from their life- style.
The vast majority of higher earners will not suffer, as it will not reflect one iota on the diminution of educational opportunities or welfare or importantly place and child into a poverty trap of any child.
It now for the `Coalition Government’ to target its sights on finding a more fairer pathway to ensure that those Bankers in the City, so championed by the gunhoe Mayor Boris Johnson, to make an equitable contribution to the tax purse, to reflect the £70K bonuses that they are now about to be paid, in one amount.
If the national defict is allowed to fester any longer at a rate of national debt of £200 M each day that equates to the cost of the Armed Services on the same basis, Britain as an Economy will no longer be fit for purpose.
Ther is a parodox in the abolition of CB freom high earners as the `Times’ and FT support it in principle in the spirit of fairness but Polly Toynbee the sage of the `Guardian’ claims that higher taxes would be more appropriate and believes that the universality of CB for those earning over £100K per year is right.
I do not claim child benefit but I am happy to contribute through to it because it is for the child. I see that the bribe is to make tax concessions to those who have lost benefit apart – of course – for the lone parent who earns 44 thousand a year – the lone parent who is usually a woman. Another sexist cut that hurts women and children. Try and explain that on the doorstep during the elections – oh I forgot – the idea is for a stich up next time too.
@ Patrick Smith
How on Earth can removing universality of benefits be described as liberal? It is like the term progressive being bandied around LDV – a catchall to be used when no other justification can be made.
How does paying a pupil premium, direct to schools to be spent however they choose (and at a level no-one yet knows) impact on child poverty?
Are you saying Nick Clegg didn’t state he would protect universality of benefits?
How on Earth do you get from child benefit to remembrance day?
Patrick Smith
My father fought in 2nd world war as a ‘ tail end charlie’. He wonders what he fought for now.
The pupil premium has nothing to do with stopping child poverty. It does not buy them food, housing or clothes.
@tony
I sense your frustrations and I don’t think you will get many Lib Dem Mp’s or activists speaking up any time soon.
I do think that the questions and arguments goes beyond whether you agree or disagree with cuts to child benefits or married tax allowances, and now include are the Tories making a mockery out of Liberals and the coalition?
It seems a fair question that many people seem to want to duck.
It is obvious that LD had no prior knowledge that the chancellor was going to be making these announcements to child benefits and then the further announcements which where made today about the married Tax.
That to me speaks volumes on how the Tories view their LD coalition partners.
If they don’t have the common decency to discuss these proposals with the LD party or even in parliament before making announcements too party conference, then what hope is there really of this coalition serving the full term?
And you have to wonder. If conservatives can announce what already are highly questionable policies at what is only a party conference without Lib Dems knowledge. What the hell is going to be announced at the spending review in a fortnight which the Lib Dems have no knowledge of?
I am not trying to bash LD here. I just think that party needs to step out of the shadow’s and start saying what they really think. Before they are railroaded completely by the Tories and banished to the corner of the room the rest of this term in Government.
This has actually just gone from being scary to being farcical. Cameron has briefed this evening that he will introduce a married couple’s allowance to offset some of those hit by child benefit being removed. It’s so surprising – that Chris Grayling was stopped half way through his interview with the BBC telling his party not to panic and revise tax policy and told the PM had introduced it.
To all those espousing the newly held Liberal eelief that ending universality is fair and just, I’d like you to now tell me that a middle-class married couple’s allowance is fair and just. And child benefit isn’t.
Clegg clearly didn’t know about child benefit being canned. He clearly didn’t know that today he’s also be signing up to married couple’s benefits.
In response to Cuse and Anne.
The relevance of the `pupil premium’ is that it is in the`Coalition Agreement’ as key education policy to invest more resources to afford more one on one help to the neediest pupils and to hopefully reduce classroom sizes.
I quote Sarah Teather MP LDV 27/7–`schools taking disadvantaged children will get additional money to provide the extra support.’
Also it is agreed that one of the main drivers in social mobility, is educational chances and is n`t the task to reduce the chasm of inequality that was increased and not tackled at all after 13 years of Labour Government?
Why is it that according to the RSA `Public Services Trust Report’ 2010 the Sutton Trust reports that only 3% of children eligible for free schools meals attend the highest performing schools.
The point I am making is that the more important tasks of Government are to address, as fairly as is practicable, the horrendous `National Deficit’ and to support L/D policies to reduce child poverty.
The removal of CB in the main from higher earners does nothing to encroach on the poverty on the children in these families.
I would commend the war record of any WW2 veteran and naturally would respect the service of a tail gunner.
Surely it is time to revise the Beveridge liberal belief in the universality element in child benefit that has stood firm since the 1970`s ?
“Surely it is time to revise the Beveridge liberal belief in the universality element in child benefit that has stood firm since the 1970`s ?”
If that were what the party thought (which we know it’s not, because conference has just voted in favour of safeguarding universality!) then the way to go about it would be to put the case to the electorate and try to win the argument – not to swear blind you would maintain universality and then go back on your word a few months later.
Patrick, you confuse me.
You stated in your first post that there’s a link between child benefit and the pupil premium. How? Are you saying that you trust schools to spend money on our children more than you trust us? That’s not very liberal. And you still claim in your second post that it will impact directly on child poverty. How? It comes to me – not to a child or their family.
You claim that it will help the disadvantaged pupils. How? I’m a headteacher. An actual headteacher. How will this help me as a head – when I can expect to lose 15 – 20% of my school’s budget in the coming cuts? And I can spend the PP on anything I please – including champagne if I see fit.
Inequality exists after 13 years of Labour, you’re right. But don’t pretend they didn’t try to fix it by throwing oodles of cash at the problem – squillions more than the rumoured £200 PP. And inequality is set to grow under this Coalition both inside and outside the school gates. How is that liberal? As hundreds of my pupils leave to go with parents forced out of the community that I serve because they will no longer be able to afford to live there because your Coalition removed their Housing benefit, and I lost the pupil premium for them – how is that Liberal?
Now tell me how child benefit being removed and benefits being capped is fair – as well as the married couple’s tax breaks now being introduced by your Coalition. Is that Liberal?
What on Earth are you talking about tail gunners for?
@Cuse
As a Head Teacher you would be aware that this `Coalition Governmnet’ is charged with bridging a massive `National Deficit’ whilst creating new skilled jobs,moving long-term unemployed from welfare to work and to set conditions for economic growth.
I presume that the role of Head determines largely the tagetting of extra school resources. I would suggest that you invite the Sec. of State for Education to do a Q and A with staff and pupils at a school Assembly on the points raised as it is hypothetical save for him, to answer your specific concerns.
The task of L/D`s is as stated on the Federal Constitutional preamble ( Membership Card) as I presume you do not have your own yet:
`to balance the fundamental values of liberty,equality and community,so that no one is enslaved by poverty…….’
I would consider that a yearly review be carried out by an emminent social research biody i.e. Rowntree Foundation-during this `Coalition Government’ to test the water on reporting back on the benchmarks and how to be know that we it is in fact reducing poverty and inequality’.
As you say Labour spent squillions on Education and Health without any way of measuring value for money.
It is not just Liberals asking for some answers here but all supporters of common sense and practical management.
@ #
Matt
yes and thanks for the post, I just find as an ex non party animal I have been totally ignored by one of the partys I floated to the LD….
the idea of this coalletion is flawed in my opinion that is the partys are radically different and should never of got together, the Tory party was always going to dominate the coalletion and this would only ever do one thing anahilate the LD party.
Now as the LD discuss and twist and turn on another policy, the Tory activests are realising that the LD party will just have to put up with the decisions that the Tories make, for crying out loud they are even saying as much to the BBC, the LD party has effectivly handed over its policy making to a bunch of Torys, frustrated ….grrrrr I am incandescent with rage!!!!!!!
I’m sick and tired of hearing rich people (usually Blue Tories) saying that they don’t need their universal benefit. If there are so many people out there who can get along without their universal benefit wouldn’t it make sense for the Government to send each recipient of universal benefit a letter asking them to tick a box if they actually didn’t need their winter Fuel Allowance, Child Benefit etc and were willing to forego it. Very few, would forego it, I suspect.
Cuse
Posted 5th October 2010 at 6:18 pm
its simples vote against the Gov or lump it
@Mack
none of the super rich would tick a box and willingly forego a benefit, be it Child Benefit which is said to be taken up by 97% who are entitled to it.
Most people prefer to look at the as TAX BREAKS rather than benefits as they feel somehow that makes them not part of the welfare state.
People pay accountants 100 and thousands to help them avoid paying tax, so they sure as hell aint going to tick no in a box to a benefit like Child Benefit and Winter fuel allowance, As they prefer too see them as tax credits rather than welfare benefits.
same would go to
@ Matt
You simply reiterate my point! But even though I am a socialist I have to ask why rich people should see themselves as cash cows. If they can get something back for all the tax they pay why shouldn’t they be entitled to it?
The Blue and Orange Tories have really shot themselves in the foot on this one
@AndrewR (5th October 2010 at 12:46 pm)
Sorry for the delayed response.
“Why not have the courage of your convictions? Re-instate the tax on banker’s bonuses, raise income tax and for good measure scrap the 3 billion quid nhs re-organisation. Then we can look at fair reductions in universal benefits.”
For the Lib Dems, because we didn’t get a majority and are in a coalition. As for me, I do have the courage of my convictions. I’ve already said in this thread that I’d prefer to raise income tax, and elsewhere that I have problems with the NHS re-organisation.
“There is no point in being in politics if your choices are wholly constrained by the policies of the other two parties.”
Indeed. That’s why the next election manifesto will propose very different policies from the Conservatives. But I also think there’s no point in being in politics if your refusal to compromise means your policies never get implemented. And, in my opinion, we are having a lot of influence on government policy, and some important parts of our manifesto are being implemented.
“If we are all in this together how come people like me (high earning, no kids) are getting off scot-free?”
I’d love to tax you more if that would raise a lot of extra revenue. Unfortunately, the advice from experts like the IFS is that this would reduce revenue. http://uk.reuters.com/article/idUKTRE53J2ID20090420 It’s frustrating, but much as I’d like to tax you until the pips squeak … we have a deficit to cut.
“The debate should start with reversing Gordon Brown’s income tax cuts. It’s simple and fair whereas it’s extremely difficult to be both if you start tinkering with universal benefits.”
Regarding tax, I agree. I’ve said exactly that earlier in the thread. Unfortunately, with Labour and the Conservatives resolutely opposed, we’ll have to await a Lib Dem majority government.
This proposal isn’t ideal. And there will be single income families on the margins who will be hit pretty hard. But I’d much prefer this cut to most of the alternatives.
Frankly, I find it surreal, that people are attacking this from the left with such venom. For those on the threshold, this proposal will be painful for some middle-income families. Almost any change (barring raising income tax) will throw up similar hard cases. But, mostly, it’ll take money from the rich.
Seeing so many leftwing opponents of the coalition making common cause with the Daily Mail, makes me think that they’d attack us whatever was proposed.
I agree that the issue of universal benefits is an important issue. In a thread I authored last July, it was obvious the principle of universal benefits would be question in the spending review, so I invited people to discuss it.
: “… I asked folk here if we need to consider cutting middle-class welfare. No responses so far. Anyone got an opinion? Any particular middle-class benefits that should be protected over others?”
https://www.libdemvoice.org/opinion-genuine-progressives-should-suggest-cuts-20352.html#comment-133769
People didn’t take me up on the invitation, and wanted to talk about other things instead. Fair enough.. But I find it a little surprising that this issue has suddenly become so important to them now.
@ george
I really fail to see why, the point is that even if this proposal is the best thing since sliced bread, it was not two weeks ago at the LD confrence, the point is that LD policy has been made at the Tory party confrence, the LD party has been made totally irellavant, now if this is OK then fine keep telling peeps they are wrong and you are right, but don’t be surprised when your party dies.
George Kendall, the reason I have a problem with this proposal is that it is an ideological attack on universality. You fool yourself if you think this has any financial basis at all. There is no part of it that could not be achieved in a fairer way. Even if you were suggesting that there be a binding clause that would require reinstatement of the universal principle once the debt was cleared it would demonstrate a commitment to equality. No such clause exists because that is not what this policy is about. It is a trojan horse designed as a gateway policy into an all encompassing attack on the notion of universality in all welfare and health care provision.
The question being asked with this policy is; do you accept the argument that the society should ensure equality or that it should only provide a safety net on a charitable basis. Once this principle of safety net is adopted it will be health insurance next, don’t forget the white paper on Liberating the NHS already proposes that social care should be privately funded through voluntary contributions and partnerships.
Come the next election there will have been irreversible measures taken to privatise the NHS. Among these the most significant is the one that removes the cap on private work undertaken by trusts. This incentivises Foundation Trusts to operate on the same basis as dental services, not many of us would describe that as universally available free at the point of delivery. When you have spent so much of your time arguing that it was ‘the deficit that made us do it’ will you brag about being the party that facilitated the destruction of the welfare state as much as these pages brag about how the Liberals invented it in the first place or will you be left with only the Ryder Cup to claim as the significant legacy of Liberalism to the progress of fairness and justice.
Ultimately the reason that this policy is being attacked from the left is that this financial meltdown can be dealt with in a just and fair way that recognises the principle of equality or it can be used as a tool to destroy the notion of equality and the welfare state. This policy is the choice of those who would follow the latter course.
So David Cameron takes another swipe at Nick Clegg and the LD. He just said in his speech that when he and Nick Clegg where in talks about forming a coalition. Nick Clegg set out his priorities as being Political reform, whilst David Cameron’s was on the Family.
If that’s not taking another swipe at LD I don’t know what is.
He basicly just said to the nation that he and conservatives are all for families, whilst all Libdems are about is self interest and Political reform.
I do honestly hand on heart think over this last week the conservatives have shown there true colours and disregard towards LD and it’s hide time people started doing something about it.
It might be ugly and LD might be reluctant to accept whats going on, through i do not know fear of looking as if they have been bullied by the tories. But it is only going to get worse the longer the party fails to do something about it.
Thats my opinion anyway.
The Lib dem party is ineffectual it makes policy that is reversed by the Tory masters meanwhile it spouts on nonsense about fairness whilst people get kicked out of their homes coz the Tory masters have slashed Mortgage interest relief. These policys are your policys, you are responsable for them becouse you have allowed them to happan shame on you.
@george
“But I also think there’s no point in being in politics if your refusal to compromise means your policies never get implemented. And, in my opinion, we are having a lot of influence on government policy, and some important parts of our manifesto are being implemented.”
i specifically ask you in relation to the cut from 6% to 3.6% (ish) on mortgage tax relief for some of the most vunrable in society what use is your “influnce”, will your smug glow from being in power keep them from being homeless, and will your manifesto keep them feed,clothed and warm this winter?
I had always been a labour voter before. But I switched to Liberal Democrats at the last election.
Norwich South where I am from, had been a labour city for years, with Charles Clarke as the MP
To be totally honest it was Charles Clarke who swayed my decision to switch my vote from Labour to Liberal Democrats as I didn’t like Charles Clarkes attitude and I didnt want to keep him as MP for my constituency
.I believed that over the last couple of years CK had done a lot of damage to the Labour Party and he needed to be gotten rid of.
However I must admit i had hoped that the election result would have been a Liberal/Labour coalition and not the Con/Lib we ended up with.
The results in my constituency where so close, that it now leaves me constantly questioning whether I did the right thing or not.
Simon Wright- Liberal Democrats got 13,960 Votes and 29.4% of the votes
Charles Clarke- Labour got 13650 votes and 28.7% of the votes
My point is. How many more people from my own area feel the same way that I do? after all Liberal Democrats took the seat by only 310 and votes.
Hand on heart I really had high hopes for Libdems.
Even though I had always been a labour supporter in the past, There where things with the Labour Party that i was unhappy with and I believed if the LibDems came into a coalition with them, Then the Lib-Dems would be able to put Labour back on to the path that I believed they should have been taking and together they would form a really strong Goverment that the British people could have faith in.
I believe the British public spoke what they wanted at the ballot box. They were not happy with labour but equally they didnt want a conservative Government either.
However I do think more people supported Labours and Liberal Democrats manifesto’s and that was that WE DO NEED CUTS, but not as deep and not as fast. And more fairly.
I dont think people voted for these Tory Policies that are being rushed through and forced upon us.
I really am waiting and wanting to see some action from Liberal Democrats. I guess what I am saying is,
I ended up puting my vote to a party that I believed was going to fight for a fairer society but was also going to have some back bone in this Government and prevent draconian policies that where going to favour the well off, the banks and major companies.
I forgot to say that Norwich had that forced local Election only last month, due to High Courts Decision. And Labour wiped the board more or less and increased there number of local councillors.
And that was just 4 months after the General elections.
Is this a sign of what is to come at the local elections in May 2011 for Liberal Democrat councillors?
I sincerely hope not and I am hoping that the party comes out of the Tory Shadows and start fighting and standing up for the people that Liberal democrats are supposed to stand for
As I said the other day on the wrong post – if you earn enough to pay for your kiddies without state assistance, you shouldn’t be entitled to it.
Let me know if that’s a simplistic view.
I find it difficult to get excited about. This is taking money off extremely well off people.
Sure pegging this to higher rate tax is a crude way of marking the cut-off point. And there is an anomaly where some families
But lets not forget a household with one higher rate tax earner *is* really well off. Not comfortable, well off. Even if the parent earning £44,000 (plus salary sacrifice to pension contributions, childcare and charity) is on their own, they are doing *really* well for themselves.
And what’s all this out of date nonsense about it being a benefit that is paid to the mother. Sure, in the old days of child benefit books it *was* paid to the mother. But these days it is usually paid into the family bank account. Yes, as a hang over from the origins of the benefit, only one parent is allowed to be contact on the child’s computerized file at the HMRC. It’s the child’s file indexed by the child’s CHB number (which in later years becomes the child’s NI number). There is, these days, nothing in writing to say which parent must be in control of the benefit file. If the child lives with both parents it can be either, the days where the authorities insisted it went straight to the mother are long gone.
@Rosalind
I believe that the universal benefit should be kept and the wealthy pay more in tax. This policy may start with the better off but I honestly fear that is the start of it being withdrawn altogether along with others such as the winter fuel allowance. I depended on my child benefit and would hate to see it removed from people who need it for their children as I did. I do not trust the coalition to safeguard it.
@anne
if you dont trust the coalition then you dont trust Lib dems by defintion as they are part of it.
now the same is true of the cuts they are Lib dem cuts, so when peeps are out on the street due to the cut in Mortgage support that will be down to the Lib dems as they are the Gov or part of it, it is very simples really the Lib dems are going to start making peeps homless in the next year due to the Lib dem cuts.
There’s some interesting gossipy coverage from the Indy on this:
“The concern about the controversy extends to the Cabinet. The Independent understands that Iain Duncan Smith, who as Work and Pensions Secretary is responsible for benefits, was not consulted in advance of Monday’s announcement. It is believed to have been finalised by Mr Cameron and Mr Osborne on the eve of the conference.
Cameron allies insisted the child benefit change had been under discussion “for months” and that Mr Duncan Smith had been involved. But one senior Tory said: “It’s a complete mess. If people had been consulted, they could have sounded a warning. You can impose policy from the top like this in opposition but it shouldn’t happen in government.” ”
http://www.independent.co.uk/news/uk/politics/tories-in-turmoil-as-child-benefit-backlash-gathers-strength-2098910.html
Pinch of salt and all that, but it makes some sense. IDS is many things, but he isn’t dumb enough to draw a line this unfairly in the name of simplification. And Steve Webb is certainly pro universal benefits, from what I recall. I wonder if it’s partly a case of Osbo and Dave charging ahead with a stupidly executed idea, and partly a case of IDS and Webb having won some battles on overall welfare reform (which Osborne was originally opposed to because it’s more expensive in the short term) so are grudgingly allowing this through.
@ Tony
Spot on!
Has anyone thought about women ( mostly ) without income who currently get credited with a national insurance contribution which is triggered by their receipt of child benefit?
@Tilly
This does not seem to have been raised at all. Home responsibilities protection for the state pension depends on receiving child benefit. They have not thought this out have they?
George Kendall:
” ‘If we are all in this together how come people like me (high earning, no kids) are getting off scot-free?’
I’d love to tax you more if that would raise a lot of extra revenue. Unfortunately, the advice from experts like the IFS is that this would reduce revenue. http://uk.reuters.com/article/idUKTRE53J2ID20090420 It’s frustrating, but much as I’d like to tax you until the pips squeak … we have a deficit to cut.”
A cut in child benefit to high earners is effectively the same as a selective tax rise, applied to those high earners who have children, only. Why do you suppose that a tax rise on all high earners would “reduce revenue”, but a selective tax rise on just child – rearing tax earners would not?
Sorry, last line should read “on just child-rearing high earners would not?”
@David Allen
“A cut in child benefit to high earners is effectively the same as a selective tax rise, applied to those high earners who have children, only. Why do you suppose that a tax rise on all high earners would “reduce revenue”, but a selective tax rise on just child – rearing tax earners would not?”
A fair point. Let me elaborate. The IFS estimate that the optimal tax level for maximising revenue is about 43%.
If that’s the expert advice, I’d then be inclined to raise the higher rate of tax. Unfortunately, there’s no way we’d get that past the Tories. And I don’t think Labour would support it either.
Cutting child benefit for high earners is another way to achieve a higher effective tax on high earners. It’s a pretty messy way of doing it, and throws up anomalies, but in the absence of alternative ways of getting high earners to contribute more to reducing the deficit, I’m backing it.
@Alix Thanks for the link. If true, that’s interesting.
@george and are you backing the torys cutting Mortgage interest relief for the poorest in society for another reason backed up by research by an august body???
its all BS to me George, you are in gov and you are about to slash and burn ordanery working peeps and thier families, stop pretyending you are anything other than members of a thatcherite regime, please.
@matt we are in watford and there is to be a byelection in one ward, will let know if Labour get in in that ward, am reckoning it is in the bag for them.
George,
OK – I see that the IFS believe that raising a tax rate from 40% to 43% gains revenue, while pushing onwards to 45% starts to lose revenue again. Perhaps they should have added some decimal places to that 43% figure, just to emphasise how badly you can get over-confident in the brilliance of your own maths! I would have thought it also depends very much on how hard we try to prevent tax avoidance and evasion by the rich. If we spent as much time on that as we spend on low level benefit fraud, maybe we could jack up the break-even figure to 50% or 60%, and then clobber the people who put us into this mess and have profited from it.
However – You’re saying it is worth supporting a messy, unfair, and probably rather unproductive measure because it does manage to clobber a segment of the rich, and it does get rid of around 1% of the deficit. As against that, it deals a weighty blow against the principle of universality, as Anne and JRC have pointed out. Well, you weigh these opposing arguments one against the other, you balance them, and you decide which side to come down on.
I somehow suspect that if we still had a Labour government, and they proposed a cut like this to deal with the deficit, Lib Dem HQ would be booing from the rooftops!
@David Allen “I somehow suspect that if we still had a Labour government, and they proposed a cut like this to deal with the deficit, Lib Dem HQ would be booing from the rooftops!”
Maybe.
I agree that there are arguments either way on this policy, and I don’t blame Labour for opposing it. Unfortunately, we have an adverserial political system, and there’s a strong incentive for the opposition to oppose government policies. And would have been if the Lib Dems were in opposition.
I do think Labour are unwise to oppose it so loudly. Because it begs the question … if they oppose a cut that affects higher rate tax payers, what cut wouldn’t they oppose? Ed Miliband clearly wants to move away from the image of deficit deniers. That’s clearly sensible. But I think Labour’s response to this proposal will make that harder for him.
@ george could it be that The Torys did this on purpose just to cause this type opf thing, and BTW although Labourish peeps on here have made a bit of fuss I really think that in the mainstream they have been more focused on there shadow cabinet posts.
Maybe this is another good idea that needs a little tweaking. Higher earners should not be penalized for being higher earners. We all make our choices in life including how much we are prepared to put into it as to what we get out. We choose how many children to have too.
Perhaps the CB should only pay for the first child across the board, making it a fair system. We should have to pay for our own children, if we can’t afford to bring them up ourselves maybe we shouldn’t be having so many. This will ultimately ease the strain on an already over stretched system of care for vulnerable children and families not taking responsibility. Of course I don’t think this should come into force straight away, I don’t think you should take money away from people who depend on it, but a new rule could gradually be enforced with a cut off date.
Before you think I am sitting pretty in a waterfall of financial splendor then you are wrong. I am a single mother who gets no financial support from my children’s father, I work full time and pay my own bills. I just got off my backside, went to college and got qualified at something…