Posts Tagged ‘Child benefit’

Reverse the child benefit cut and the politics of the 50p rate become irrelevant

29/01/2014, 12:46:12 PM

by Kevin Meagher

Of all Gordon Brown’s decisions – both good and bad – the most questionable, perhaps the oddest, and certainly the most irritating, was to award a peerage to Digby Jones and invite him into his government as trade minister.

What on earth was Gordon thinking? Jones – a corporate lawyer and former head of the CBI – is also a blowhard’s blowhard and has snapped at the hand that once fed him ever since. He can be relied upon as a rent-a-quote Labour basher these days and was at it again, jowls a-quivering, at Ed Balls’ pledge to restore the 50p top tax band for those earning over £150,000 a year. Reaching new heights of self-parody, he claimed:

“In the last few months we’ve got, oh, ‘if it creates wealth let’s kick it’ – really go for energy companies, really go for house-building, bankers, this time it’s going to be the high-earners.

“I am amazed he’s going to keep it at 50[p]. I’d expect if he [Balls] becomes Chancellor of the Exchequer we could be looking at 55, 60 on the excuse he gave today.”

But the outriders for the wealthy like Diggers can’t have it both ways. If raising the 45p rate to 50p is an inefficient way of raising revenue, the contention of august institutions like the Institute for Fiscal Studies, then the well-heeled clearly aren’t losing out very much, so it can hardly be catastrophic.

The economics of making those with the broadest shoulders pay the most to reduce the deficit, Ed Miliband’s phrase to describe the move, is sound enough, but the politics of tax rates are, of course, tortuous stuff for Labour.


Facebook Twitter Digg Delicious StumbleUpon

A man for all seasons: Dan Hodges interviews Peter Hain

15/10/2010, 09:00:36 AM

Hain. A signature surname. No introductions necessary.

Some politicians travel on a journey. Peter Hain streaks like a comet.

Anti-apartheid insurgency. Letter bombs. Arrest. Conspiracy. Sensational acquittal. Liberal activism. Labour defection. Left wing standard bearer. Moderniser. Cabinet minister.

It’s a biography most politicians would die for. And those are just the highlights. Where, Uncut wonders, can Peter Hain possibly be heading next.

“Chairman of the national policy forum”.

Oh. Er, that’s a bit prosaic isn’t it? What about policy guru? Or supremo? Ed Miliband personally selected you for this role. Surely it must come with some grand honorific?

“I’m also Ed’s representative on the national executive”. Representative? Not capo? Consigliere? We’ll work on it.

“What I want to say to followers of Labour Uncut is – ‘I’m interested in your ideas. If you’ve got a new ideas or policies, I’d like to hear them’”.

Brilliant. Uncut’s followers – we do like to think of ourselves as something of a cult – are all ears. This is fresh. Innovative. Hain – the Peter Hain – is reaching out to us. The doors of the policy forum, the inner-sanctum where Blairite alchemists concocted their heady third-way brew, are to be thrown open. How will it work, Peter? Tell us. Bring us within the fold.

“Well, at the moment, you know, I’ve only just been recommended for this post. I’m just interested in new ideas basically”.

Ideas. Well, I’m sure we can come up with some. Maybe need a little steer though. Bit of guidance. Know it’s a fresh dawn and everything. New politics. Inclusivity. But after all those years of visionary leadership and iron discipline, perhaps a little nudge?

“It’s my job to act as funnel for Ed Miliband’s vision and strategic objectives to be channelled through. And then for the party to be engaged in that”.

So what is Ed Miliband’s big vision?


Facebook Twitter Digg Delicious StumbleUpon

Child benefit and middle class single mums: the sums, by Lesley Smith

07/10/2010, 12:39:34 PM

Much guff has been talked about the effect of the loss of child benefit on the so called aspirant middle class. Yes, a family with one earner taxed at 40% and one at 0% will be hit. And, yes, it’s a grand less towards the school fees. But the tax system already looks after happy couples. (Two people, two tax allowances).  And Cameron and Osborne knew that there was little appetite to defend them.

So who does lose out? And does it matter? Well there’s not much sympathy for working single mums who’ve managed to go up the income scale.  Sure, they’re not the worst off. One blogger points out that the median income for working single parent families is £21,035 a year (compared with a median of £32,158 a year for a two parent family with one worker.) (I’m assuming this is gross.)

But single parents earning £45k aren’t an urban myth. And nor are they leading the life of Riley.

Unless she has stumbled on a lottery ticket, a single mum on £45k is out at work and shelling out on childcare, paid out of already (higher) taxed income. (Funny that an accountant is tax deductable but a nanny is not.) So her net income is far, far lower than that of the couple who generate the same income but only pay 20% of it to the tax man. (And she’s up half the night cooking and cleaning as she hasn’t time in the day or money to pay). (more…)

Facebook Twitter Digg Delicious StumbleUpon

Thursday News Review

07/10/2010, 07:15:58 AM

Child benefit backlash

George Osborne’s announcement on cutting child benefit for those on higher tax rates was meant to signal that the party is willing to hurt even its own people in the pursuit of fair cuts. But it caused outrage in the ranks among back-benchers, and seemed only to confirm that David Cameron and his inner circle had in reality bought into the Lib Dem view of life and were “essentially anti-marriage”. In fact it has turned out to be the Conservatives’ 10p tax moment – similar to the fury caused when Gordon Brown scrapped the bottom rate of income tax to help fund a basic rate cut to help the better-off. – The Scotsman

The collateral damage from the Government’s ham-fisted plan to withdraw child benefit from higher-rate taxpayers has been severe. It has overshadowed the first party conference in 14 years at which the Conservatives can celebrate being in power. David Cameron was forced to spend much of yesterday touring the broadcasting studios on a firefighting mission; George Osborne had to write to all Tory MPs explaining that he had no alternative but to use such a blunt instrument because a fairer mechanism based on household incomes would “create a new complex, costly and intrusive means test”. Both men hinted that tax breaks for married couples or even a transferable tax allowance would be introduced by the end of this Parliament to soften the impact of the benefit withdrawal. – The Telegraph

Cameron’s big moment

David Cameron pressed all the essential pulse points for committed party members, slating a lengthy list of Labour’s failings, pledging to roll back the power of the state, emphasising fairness, promising to create an environment in which the Tory virtues of entrepreneurship and self-reliance would thrive and describing Baroness Thatcher as Britain’s greatest peacetime Prime Minister of the past century. It all received the standard standing ovations but will have done nothing to reassure the wider public, particularly floating or Liberal Democrat voters apprehensive about the cuts to be set in motion by the public spending review in two weeks. – The Herald


Facebook Twitter Digg Delicious StumbleUpon

Wednesday News Review

06/10/2010, 08:07:04 AM

Osborne & Cameron face backlash over child benefit grab

There was a massive backlash because the cut targets stay-at-home mothers, who protested they would be unable to cope and would be better off divorced. That is because two working parents can get more than £80,000 between them without being hit, while next-door neighbours with one earner on £45,000 will lose out. Shadow work and pensions secretary Yvette Cooper said yesterday: “This is a shocking attack on children. Families of all incomes are being hit hardest. “Government Ministers clearly have no idea of the pressures ordinary parents face and how hard people are working to support their children.” – The Bristol Evening Post

The coalition talks about creating a fairer tax and benefits system… then allows a couple earning £86,000 to keep payments someone on £44,000 would lose – and produces a marginal tax rate which means a £1 wage rise could cost a dad of three £47.10 a week. Panicked Cameron is suddenly disinterring a married couples tax allowance. Forget for a moment the injustice of penalising unmarried mums and dads – where, pray, would he get the cash to pay for it? Rob Peter to pay Paula? Suddenly George Osborne admits £11billion cuts in the Budget hit the poorest hardest to justify the child benefit lunacy. The Chancellor denied that very charge a few months ago. – The Mirror

There is that storm on the horizon, the hurricane conjured by Mr Cameron himself and his apprentice, George Osborne. You could call it Grandson of Poll Tax. It does not mean, this time, that an economic experiment will be visited on Scotland first. But amid a Scottish election campaign, and amid the ensuing debate, that’s how it will feel. Received wisdom has long held, of course, that “the cuts” were ominous for Tories and Liberal Democrats alike with elections due in May. What was overlooked was the precise nature of the losses, their specific geographical – and devolved political – circumstances. The north of England is to catch hell: so much has been noticed in parts of London. But the defence review looms large, for better or worse, the length and breadth of Scotland. The Scottish grant, by its very nature, will raise a slew of issues as Mr Osborne sets merrily to work, not least for Scotland’s Tories and LibDems. – The Herald

David Cameron will today try to bribe married Tory voters with a tax break to make amends for his ruthless child benefits axe. After the chaos and anger over his slash-and-burn attack on the welfare state, he will offer the compromise to try to win back middle Britain. His keynote speech has been hastily rewritten to stop the Tory annual conference being wrecked by the move to cut child payments for 1.2million families where one person earns over £44,000. But the Prime Minister’s tax break for high-earning married couples is also set to spark fury as it discriminates against single mums and families where both husband and wife work. – The Mirror


Facebook Twitter Digg Delicious StumbleUpon

Child benefit cuts reduce Tory MP Margot James to radio gibberish

05/10/2010, 09:46:04 PM

Tonight George Osborne has written to Tory MPs to explain the cuts he announced to child benefit. It’s a good job. The ill thought out plans seem to be catching out Tory MPs from the PM down.

A red faced David Cameron, with watery eyes, struggled to explain how the announced reform was “fair”, to Sky’s Adam Boulton, hinting at other tax breaks that could level the playing field. Later he stonewalled Five News when asked what the tax breaks would be, offering a line which should inspire confidence in all parents:

“We’re only going to announce one measure at a time. You have to look at all the measures together”.

Iain Duncan Smith floundered in a similar fashion when questioned, saying: “Like all these things, that will all be smoothed out as and when we reach the transitional point”. Thanks for that Iain. You may as well have stayed quiet.

But the prize for the most confused Tory MP has to go to Margot James. The Stourbridge MP, who was elected in May, must have been delighted when she realised that the conference would be on her patch. What better opportunity to get in the local media than the whole conference jamboree coming to your backyard? (more…)

Facebook Twitter Digg Delicious StumbleUpon