Today, on Twitter, I made the comment that changing Child Benefit was something I believe Labour should have done a long time ago. Not in the way that George Osborne plans to do it, but in terms of preventing the super-rich from being able to claim it. The responses I received were broadly in agreement - I asked the question: Why should the Beckhams be able to claim it? Why should £20 of taxes paid by working people be given to David and Victoria towards the upkeep of Brooklyn?
This is the issue: the very wealthy do not need it and by giving them this universal benefit, it prevents the money being targeted more effectively. The issue is not about single-parents, I would question whether a single-parent earning £250k per annum should claim it too; neither is it about multiple-income households, it is a hugely complex issue and it appears that George ran out of room on the back of the postage stamp he is writing his ideas on.
George Osborne is making a huge mistake in trying to pretend he is making the rich pay more. As ever, he has tried to over-simplify a very complicated issue and come out with completely the wrong result. Yes, there should be a review of how Child Benefit is paid, but doing so with no consideration to overall household income, is not the way to do it.
There is however an argument that the amount to be saved by taking CB away from those (like the Beckhams et al) who clearly don't need it, isn't worth the cost of implementing such a system (as unpalatable as that may be).
ReplyDeleteEqually there's the (admittedly nerdy and unlikely to win popular support) argument that universal benefits are only successful because they are universal (thus commanding popular support and avoiding the 'them and us' of most benefits) [Horton and Gregory 2009; The Solidarity Society. Fabian Society]
This argument leads to the view that move away from universality is the first step to marginalising and stigmatising the recipients and leads over time to the reduction of the benefit in real terms as it becomes a soft (because it's now unpopular) target for cuts.
So, yes it's complicated....
Neil
My main problem with the announcement was the suggestion that it will count per parent so that if both parents are earning just under £44k then they will get to keep their benefits. Whereas a single parent just over the borderline wouldn't... Doesn't that stigmatise single parents? So much for no idealogical agenda.
ReplyDeleteThe great thing about universal benefits is their high take up. Compare the 98% take up of child benefit against the 75% take up of tax credits. The down side is, as you point out, the Beckhams receive them. However providing the Beckhams pay their income tax at 50%, I am happy to live with this anomaly.
ReplyDeleteThanks for your comments.
ReplyDeleteRon, you make a very good point regarding take-up. The down side of the Beckhams argument (or anyone who could be classed as very wealthy) is that they will always have very thorough tax accountants who will make sure they pay as little at 50% as possible.
Neil, I too am worried that this is just the first (easiest) step in attacking all universal benefits but alas, I think it is one we should have looked at ourselves.
CharmedLassie: I understand your point, but think that this is less of a social choice issue than an economical one, there is no consideration given to whether someone is part of a single or joint income, just an incredibly over-simplified attempt to 'do something' with child benefit.
You're absolutely right to bring up the question of tax evasion. I believe the best response to tax evasion is tighter enforcement not the withdrawal of Child Benefit.
ReplyDeleteIs the Beckhams' entitlement to free child benefit really that different to their entitlement to free state education or free NHS treatment?