Thursday, 7 October 2010

Child benefit to be cut for higher earners; Cameron "sorry"

A couple of weeks ago, I argued in favour of maintaining the universality of child benefit (The future of child benefit?). I was even caught on camera by the Daily Politics making this point, and I'm not going to apologise for it now.

Earlier today, in a facebook discussion started by Jo Swinson, I repeated my arguments. It goes against my liberal instincts to make distinctions between the deserving and undeserving. The views of various charities and support networks, who work on the frontline and have an understanding of the realities many politicians lack, should be listened to. The amount of money "saved" is questionable as the system will now become more complex and, by reason, more expensive to administrate. And, finally, the Liberal Democrats have a historical position, founded on solid liberal principles, which I don't feel should be so easily surrendered in the name of austerity.

In response to this, one man wrote: "Great contribution, though it looks like many historical positions are being surrendered all too easily!" This is an oversimplification, but it is true that here is an example of pragmatism overtaking principle.

Yesterday's Guardian led with "Cameron 'sorry' child benefit cut was not in manifesto". Cameron is reported as being "forced to apologise for breaking an election promise with his decision to withdraw child benefit from 1.2million higher rate tax payers". He is quoted as saying: "We did not outline all those cuts, we did not know exactly the situation we were going to inherit. but I acknowledge this was not in our manifesto. Of course I am sorry about that."

It was a remarkable admission. Firstly, it made him look rather stupid for apologising for what is now Conservative policy. Secondly, as Iain McWhirter observed in today's Herald, it appears the Tory tactic is "to antagonise the middle classes and, therefore, make it easier, in future, for Mr Cameron to soak the poor." And that's exactly how it will come across to Average Joe. It's as if he wants to get this one in early, ahead of announcements about deeper cuts, to counter claims that such cuts will hit the poorest disproportionately. Cameron might want to be seen as not overty protecting his own, but the potential political costs - not only of cutting benefit entitlements but of going back on manifesto commitments - are likely to be great.

Labour have already condemned the move. That much is to be expected. But, as McWhirter accurately discerns, it is a rare achievement indeed "to unite the Guardian’s Polly Toynbee and the Daily Mail. Ms Toynbee likes child benefit because it goes to the mother direct and therefore can’t be “drunk by the husband”. The Daily Mail likes child benefit because it helps mums to stay at home. Both use antiquated images of domestic life to argue for a form of universalism that is long past its sell-by date. I have difficulty disagreeing with Iain Duncan Smith’s remark that giving child benefit to people earning over £50,000 is “bonkers”. But under the Tory scheme, er, they’d still get it if they split their incomes."

It is this inherent unfairness that most Tories object to. A family with two adults earning £80,000 would still be eligible for benefit, but a family with a non-working parent living on a single income of £44,000 will get nothing. Not only is this inately unfair, it suggests that very little thought has gone into the detail of how this will work in practice. This lack of planning is acutely embarrassing. The suspicion that the planning behind the policy was classic back-of-an-envelope stuff seemed confirmed when culture minister Jeremy Hunt confirmed on Newsnight that "I did not know about the timing of these announcements. I did know these options were being discussed." He then, unhelpfully, went on to argue that those having "too many children" should be denied support: "The number of children that you have is a choice and what we're saying is that if people are living on's not going to be the role of the state to finance those choices." This unguarded statement hinted at motivations beyond mere savings.

I have been watching parts of the Conservative Party conference, and much of the discussion was stimulating and relevant. Unfortunately, the timing of the child benefit announcement overshadowed some of the many positives to come out of the conference. Even the Prime Minister's emphasis on "fairness" seems empty and hypocritical when the government pursues policies that are plainly anything other.

The Guardian speculated that the "government has made [its] first big mistake". "Is this the coaliton's 10p?" asks Jonathan Freedland. It could be, especially if it hits the core vote of either of the coalition parties. However, a YouGov poll found 83% of people backed the cut and a Daily Politics survey of Lib Dem members at conference revealed similar results. MPs Tim Farron and Menzies Campbell stated their belief that higher earners should not receive benefit and no-one blinked an eyelid.

I fully understand the arguments in favour of ending universal entitlement to child benefit in hard times. Even although I am opposed in principle, I fail to comprehend the furore, which seems based on certain misconceptions.

What I find most difficult to stomach is that it appears to be being made, in part at least, to fund the regressive, unfair and utterly discriminatory tax break for married couples. The government claim the child benefit cut will save £1bn (of the total £100bn structural deficit), but what is the likely cost of introducing the marriage tax break? I haven't looked at this in any detail, but yesterday's Herald reported the cost of introducing this tax break to be around £550 million, rendering any savings from the child benefit cut so minimal as to defy belief.

This in turn raises questions about the government's judgement. Does it really make so much sense to sacrifice principle, or to risk so much politically, to save a mere £450 million and fund a backward-looking, discredited tax break?

I can just about grasp the notion that, in certain circumstances, reducing entitlement to child benefit for higher earners could be considered fair. Offsetting that with a Tory plan to "reward marriage" is plainly not fair and makes a mockery of Cameron's credentials as a man motivated by a sense of fairness.

As for whether "rewarding marriage" in this way will take some of the bite out of the child benefit cuts - come on, David. Even Daily Mail readers won't fall for that one.

1 comment:

Auntie Freeze said...

My God, you can write!

Interesting, not so sure about the value of the opinion polls especially as it was conducted for The Sun newspaper. You have it in one though when you say it raises questions about the government's judgement. It seems that the Tories are so obsessed with the whole marriage thing they're prepared to risk so much including their own credibility to make it happen.

I also see our local Labour Party have already taken to calling us the "CON-DEMS" and blaming us for the cuts.