Child Benefit – What are the Tories up to ?

Chancellor George Osborne

I woke yesterday morning to see Chancellor George Osborne on Breakfast TV announcing his plans to scrap child benefit for Higher Rate tax payers from 2013 – as detailed here BBC News – Child benefit cuts ‘tough but necessary’ say ministers

There’s been a lot of talk already about this (as one would imagine) – much of it focused on the anomaly of married couples earning just below the higher rate tax threshold being able to earn a combined income of over 80,000 without losing the benefit.

Personally I think that this is one anomaly that will be smoothed out – and not really worth getting uptight over. However there are a number of things that really puzzle me about this announcement.

What hits me straight-away is that although Mr Osborne repeatedly said that this move has got to be done urgently because things are so desperately bad, and if they had any choice they wouldn’t do it, but what with the state that Labour have left things in, we can’t afford to waste time, and we’re all on this together and I’m sorry but tough times call for tough solutions, and we’re all in this together, and it’s all Labour’s fault, but it’s really urgent, and we’re all in this together, yada yada yada …   Despite all this it’s not going to be introduced for three years. Three years ? If it was really urgent they could do this next week.

So it’s not really urgent then – it’s something that can wait three years.

But what intrigues me more is exactly why the Tories are trailing a cut which will primarily hit families with a single wage earner in the lower reaches of the higher rate tax bracket. Just the kind of people by the way, who would be likely Conservative voters.

Now there are those towards the left of the political spectrum who’d rationalise this quite easily – don’t give money to relatively wealthy people – give it to the genuinely poor who need it more

There are those on the right wing who’d defend it as well – don’t nanny us, make the state smaller and allow people to make their own way in life, without contributing to the welfare of others unless they choose to, and without resorting to ‘big state’ support.

In Britain though my feeling is that we have rather more people who don’t go with either of those views. We have rather a lot of people who are somewhere in the middle. People who don’t think there’s anything wrong with turning a profit, doing well in their chosen profession or business and becoming relatively well off, but who equally don’t have a problem with the state being structured in such a way as to help ordinary people – whatever their earnings – during the times when they need it the most – not just when they’re in desperate need, but also at strategic points in their life where they are relatively more in need of a little help.

When we think of “National Insurance” – we tend to think of it as insurance against the disaster of unemployment or disability. Insurance can provide for other less drastic eventualities though – and can be a way of providing for the future benefit of our families – and the nation’s families.

This is put fairly well (by a Conservative mind) in this article on Conservative Home : George Osborne’s child benefit cut shouldn’t be permanent – thetorydiary by Paul Goodman (who I confess I have not come across before – I believe he’s the former Tory MP for Wycombe).

I don’t think this measure naturally appeals to many in any political party right now – though perhaps some of the more extreme libertarians in the Tory party like it. It could conceivably drive a lot of middle income voters towards Labour.

It could of course be justified as an “emergency measure” – except as I said at the beginning – it’s not ! – We’ll wait three years for this.

So I really don’t what the Conservatives are up to with this – I am suspicious of the Conservative tactics. I don’t think they’ll ever implement this cut in its current form, and I worry about what they will actually do instead. I usually go for ‘cock up’ over ‘conspiracy’ every time – but this time I’m not so sure.

Just a thought !

Related Articles

• Is this the coalition’s 10p tax moment? (newstatesman.com)
• Letters: Child benefit must be universal (guardian.co.uk)
• Child benefit changes ‘fair’ insists David Cameron (independent.co.uk)
• George Osborne’s child benefit plans make things awkward for Labour (guardian.co.uk)
• Benefits feel the squeeze – but the City doesn’t (independent.co.uk)
• Child benefit row: David Cameron holds out promise of tax credits for couples (telegraph.co.uk)
• Top earners to lose child benefits (independent.co.uk)
• Top earners to lose child tax credit benefits (independent.co.uk)
• George Osborne: good cop and bad cop in one (economist.com)
• Ten policy headaches for the government on child benefit (leftfootforward.org)
• PM facing child benefit criticism (bbc.co.uk)
• Time for Ed Miliband to speak up on child benefit (newstatesman.com)
• Child benefit plans could be revised, says Children’s Minister (telegraph.co.uk)
• Tory right warns George Osborne over child benefit curbs (guardian.co.uk)
• Cameron faces criticism over child benefit cuts (guardian.co.uk)
• Government set to introduce tax break for married couples (guardian.co.uk)
• Tories raise alarm as George Osborne ends child benefit for all (guardian.co.uk)
• George Osborne’s patriot act (blogs.telegraph.co.uk)
• Osborne buries universal child benefit (newstatesman.com)
• Conservatives scrap child benefit for high earners (guardian.co.uk)