Child Benefit

The news this week has been dominated by the Tory's announcement that they will stop Child Benefit for higher rate taxpayers. Much of the fury over this policy seems to be generated by a sense of unfairness. The reasons for this unfairness vary but I do agree that the whole policy is remarkably ill thought out.

I think a great deal of this sense of unfairness is coming from Conservative supporters themselves. After all, this is their government and surely any benefit cuts should be aimed at those undeserving, asylum-seeking scroungers living in an expensive Knightsbridge townhouse with their multitude of offspring. Now, apart from the fact that this is a tiny minority of people, even if they do exist outside of the fevered imagination of Daily Mail journalists, the government has announced a benefit cap and, no doubt, a very special place in Hell put aside for anyone in that situation. I can only be thankful that I am not employed as a social worker because I really wouldn't want to pick up that mess. But I can understand the fury of the conservative voters - particularly as the politicians appear to have been very lax with the truth before the election.

The next group who have expressed a sense of unfairness are Labour supporters and politicians. On the face of it you may think that higher rate taxpayers are not the prime concern of Ed Miliband's new improved left-wing Labour; but I think there is a greater principle here and that is the concept of universal benefits. Universal benefits such as pensions, sickness benefit, child benefit and the free health service have proven hugely popular since they were introduced by the Atlee government. Originally, this was because most people could remember how awful the country was prior to their introduction but as the country has grown in prosperity they are maybe not as necessary as they once were. However, I heard an interview with Roy Hattersley a couple of months ago in which he defended universal benefits. His argument was that if everyone received a benefit regardless of income then they were much happier that everyone else should receive the same. If some people are excluded from this then there is growing resentment, usually amongst the chattering classes, that anyone receives these benefits at all. I think this is were Labour are coming from - if the middle classes don't benefit from Child Benefit then there is a good chance that no one will in the near future.

Another group who are outraged are feminists and women's rights groups. This is easy to see as it is, more often than not, women who will lose out on this - particularly stay-at-home mothers. In fact it was largely for this group that Child Benefit replaced Child Allowance as the aim was to ensure that it was the primary carer that would receive the money rather than the main wage earner who would be perceived to spend it all down the pub. This isn't exactly the first shot across the bows at the stay-at-home mother - a much maligned and undervalued individual and one that has been (and often still is) the backbone of the community. These are, after all, the ones that can volunteer for local good causes, help at school outings and parent support groups. All this extra work is unpaid - it will be paid even less now.

As for me, I will have to see how I am affected in a couple of years time. I haven't been a higher rate taxpayer for a few years. The last time I was, I switched jobs as the one I had was far more hassle than it was worth. That decision could only be made easier if I would be financially better off as a result. As I have three children I would have to be earning £4,000 per year more as a higher rate taxpayer to break even and this is really where the Tory policy loses the plot. Many people get stuck on benefits as they are in a poverty trap. The benefits are not generous but they allow families to scrape an existence. More often than not, any low paid work will result in the withdrawal of benefits to a greater extent than any extra income may bring in and, as a result, they are trapped in benefits dependent poverty. The Conservatives' Child Benefit policy will create a similar situation for middle earners. Taking a small promotion or pay rise, or even doing some overtime, will lead to families becoming worse off. That, I think, is really what is unfair about the whole idea.

There is one fundamental policy which I think all parties should adopt: work should always pay. It doesn't matter whether it is someone on a minimum wage or a millionaire - if they have done an honest days work they should be better off as a result of it. Unfortunately, when I look at our politicians I see very few who have ever done an honest days work in their life so I would never expect any of them to understand how people operate in the real world.