Three reasons why the child benefits fiasco is a Tory master-stroke


9:05 am - October 7th 2010

by Rupert Read    


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The Tories right now are laughing all the way to the ballot box. Whether they intended it as such or not, this cut in child benefit for the richer is proving a political masterstroke.

That sounds an extraordinary thing to say, given the sustained attacks they are suffering over it, and the apologies that they are being forced to make.

But consider the following three points:

1) As they deal with these attacks from the Mail et al, and are forced over and over again to respond to criticisms from broadcast journalists, what do the top Tory brass say? Over and over, they say: ‘Look; with this deficit we have to make tough choices; and it is only fair that the richest 15% give up this benefit in order that there is more money to go around.”

It enables Tories to identifying themselves with fairness and remove the impression that they are all about helping the rich. If they have to suffer a few days’ media discomfort in order to rebrand themselves in this way, it is a price well worth them paying.

Contrary to Sunny’s argument here, this attack on child benefit for the rich may be the way that the Conservatives finally escape the label ‘the nasty party’.

2) Meanwhile, the frenzy that the Mail et al are lathering themselves into works tacitly to the Tories advantage too: because the Mail are going on and on about protecting ‘Middle England’, while quietly ignoring the fact that someone earning £45k a year (the very least that someone now about to lose child benefit will earn) is earning twice the median income.

Twice the median: that is hardly the middle. So, the media furore is quietly stoking a sense of the country as richer than it really is, and of the rich as just part of the ‘middle class’: perfect for Tory ideas of how to reposition Britain’s sense of who it is, and of who matters.

3) Most crucially, all the attention on those poor parents earning anywhere between £45k and £Infinity is taking attention away from what really matters about this: the negative impact it is going to have on the welfare state because of a universal benefit being taken away from the rich. The poorest welfare states are in fact those which are designed only for the poor.

Thus the Tories get the best of both worlds: they get to look tough but fair, while actually doing something that profoundly undermines fairness and the entire Beveridge / Attlee agenda. Truly a masterstroke.

Lefties/greenies etc need to stop gloating on about how the Tories are shooting themselves in the foot and about those poor stay-at-home Mums, and start talking simply about defending the principle of welfare state universalism.

Otherwise, this cut will be the thin end of a very large wedge, and before we know it we will be looking at taking away NHS provision from the richest, on the grounds that they can afford private healthcare… I hope it is at least obvious to readers why THAT would be bad for us all. But it is nothing more than an extension of the logic of Osborne’s clever move here on child benefit.

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About the author
This is a guest post. Rupert Read is a Green Party councillor and ran as a MEP candidate in Eastern region in 2009. He blogs at Rupert's Read and Comment is free
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Story Filed Under: Blog ,Equality ,Labour party ,Westminster

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Reader comments


I don’t think this was planned, but you make very good points.

2. Yosemite Sam

I tend to agree with these sentiments. Some of the articles attacking this move have been beyond parody. The Sun poll gave overwhelming support, and the move deflected attention away from the benefits cap. Furthermore, where are these infuriated mothers to go? I cannot believe Labour will pledge to restore this if reelected – on the whole Labour has been very quiet about it. In the grand scheme of things this little local difficulty will prove to be a long term advantage.

The first two points are spot on – however, I think this government has a habit of shooting themselves in the foot. They produced a list of wrong 750 schools as well as they botched up the implementation plan for this policy.

While the policy is good, it shows it was not thought through. A family with an income of £80 K receiving child benefits while one on £44K not receiving it does not come through as really fair. The Government has until the spending review to sort this mess out – and most likely they would do it.

However, Labour has the opportunity to produce a plan which is fairer than the current proposed plan. But knowing the labour party thinking, someone is going to come up with another tax credit. Hope that’s not the case.

The third point does not really work – because universal benefits system really comes under attack when a large minority is taken out of the system.
Taking around 10% of the population out of a particular benefit does not mean the end of the universal benefits system.

Good article, suspect you’re right if only by assumption. Additionally, the old ‘Tory faithful’ will just knuckle down and accept it (cuts) as fact because there is now nowhere else for them to go politically.

Thank you for making the important point #3.

To many people on the left are secretly supporting this cut because they see it as hammering the rich. Universality is a vastly important concept. It is so important that losing a tiny bit of money by including the rich is a price worth paying. Anyway as long as you tax the rich sufficiently there is no “price”. When you start to talk about it being too costly to pay universal benefits to the rich then you are really saying that we are not taxing them enough. And that is easy to solve, isn’t it.

Perhaps the Left needs a better strategy than bribe the upper middle classes to support the welfare state.

It is a brilliant political move. The tories want to portray labour as deficit deniers and unwilling to come up with alternatives of what they would cut. They have therefore set a trap for Milliband – if he opposes this then he has to logically oppose every cut (this is probably the least worse cut to welfare and basic services that is coming). It also puts him in the strange position of having to argue in 2015 that he would spend a billion restoring this benefit to wealthy people.

It also has secondary advantages; it will demonstrate you can take on the Daily Mail and win (which alone deserves great credit). One of the better aspects of the government is the way in which a coalition is proceding to reform with the enthusiasm we would expect from a single party 3 figure majority (which further demonstrates how much Blair pissed his period in office down the drain). This will demonstrate to labour how to really go about doing things in office; you assume you have 4/5 years and don’t give a shit about what your opponents think.

Thanks for comments so far. I think btw that Cameron’s speech yesterday (I wrote this before seeing the speech) confirms and underlines everything I wrote above. Cameron’s big theme in the speech, which seems to have gone down well, was ‘We’re all in this together’. Normally, it is radically implausible when a Tory PM (especially a posh one with a PR background) says that, except in wartime. But their move on child benefit, _especially_ given the furore about it, has suddenly made it sound plausible to many ears.
So here’s the rub: every time a leftie blogger writes about what a dreadful mistake the Tories have made here, alienating their own supporters, creating anomalies, taking money away from stayathome Mums, they are (by so writing) _helping_ Cameron. Helping to make him look like a brave beleagured PM making tough decision against the interests of his own rich backers and in the face of howls of criticism. Helping to make him look fair-minded, ‘progressive’. …And helping thereby to hasten the cuts agenda and the decline of the welfare state…

9. Luis Enrique

do people really think the Tories would dare to introduce means-tested access to core NHS services?

In the long run the child cut benefit for the richest will turn into a tax cut for the richest because they will start to wonder why they pay all the tax but receive nothing back.

I would agree wholeheartedly with this, were it not for the sudden rush to plug the gap with the proposed marriage tax break being extended to high earners. This shows genuine panic amongst Tories that they cannot withstand the criticism being hurled their way.

This platitude also defeats the sense of fairness, it destroys any argument that the CB cut is a deficit-cutting measure (since marriage tax breaks will cost even more than is saved) and so I think exposes the reality than in fact this was just a badly thought-out, rushed measure which had unintended consequences.

I am afraid I think we are far too quick to credit our very modestly intelligent politicians with great foresight and cunning when in reality, beneath the surface, they are paddling furiously to stand still.

12. Illuminatess

I disagree. Let’s remember that the Tories got the largest party vote, not enough for govt, but enough to indicate that many voted for economic growth above everything else. They may be accepting the loss of child benefit graciously on the outside, but I think fear lurks underneath. Having a diluted down Tory government, there is a risk that the middle-classes will be cowering at the knowledge that they are sandwiched between the very rich (untouchables) and the poor (who they see as getting free cake and sympathy) and who will end up paying back the deficit? I think this marks a small start to the middle classes having to swallow increasingly bitter pills and swallow they must out of “fairness”. Their sense of “fair play” will in fact be used against them to repay the super-riches windfalls. And they know it. How long before the LibDems have to extract themselves from the coalition to save their slice of Middle England?

6
Bribing the middle-classes to accept the concept of welfare is a fait accompli which happened in the 1950s. For example, it took a lot of bribing to get doctors to join in with the NHS. But, just like an unwanted pregnancy, the welfare state has now become the fully grown child, and it has taken on more meaning than merely a money pot for when you are on your uppers.
Of course there are economic implications about CB, but never believe that it’s as easy and irrelevant as just taking a few quid from the middle-classes.

7. Planeshift

This will demonstrate to labour how to really go about doing things in office; you assume you have 4/5 years and don’t give a shit about what your opponents think.

Excellent point.

What a waste.

7
You missed out the full stop after ‘and don’t give a shit’.

16. Alisdair Cameron

@ Luis Enrique

do people really think the Tories would dare to introduce means-tested access to core NHS services?

Not immediately,no. Down the line, yes. They’re playing a longer game with the NHS. The woeful White paper is only their first salvo in that campaign. Private,insurance-based healthcare by 2020, I’d say,alas.

“do people really think the Tories would dare to introduce means-tested access to core NHS services?”

Access to core services, I think probably not. Means-tested charges, quite possibly.

You make very valid points, Rupert – I really liked this article. Again, I don’t think it was planned (in the sense of actually being attacked by the Daily Mail), but I do think that the way in which the Tories have used the opportunity has been disturbingly fantastic – and the way in which they manage to retain power.

I’m trying to see what the Left can learn out of this (repetition makes real, rephrase messaging to a right-wing crowd), and the way in which we can message ourselves cleverly to tackle the ideology & stupidity of CB cuts. Any analysis on this aspect would make a good follow up article.

Access to core services, I think probably not. Means-tested charges, quite possibly.

These were first introduced within three years of the NHS’s foundation.

20. blanco libre

The point is that most people do not see this as an issue of universality, Rupert – to them, it seems intrinsically fair that when benefits are being cut, those going to the rich should also be cut. £44k is, as you say, twice the median income – even a one-parent family with a single income of £44k DOES NOT NEED £20 a week extra.

I don’t see how you plan on communicating the issue of universality to most ordinary people, most of whom will not have heard of Attlee or Beveridge, and who don’t support universality across the board – with the NHS, yes, but not on public transport, or education, or most other public services.

Wow – Osborne and Cameron have morphed from buffoons to evil geniuses rather fast, haven’t they?!

“Private, insurance-based healthcare by 2020, I’d say,alas.”

Alas indeed that our healthcare might end up like that of continental Europe.
While they of course gaze with envy at our approach – so obviously brilliant that, erm, no-one else has dared copy it.

Please carry on with this defence of how poor little rich yummy mummies having CB cut is a slashing attack on the basis of the welfare state itself. You know it’s cobblers and we know its cobblers, but I suppose it wiles away the hours.

Where has this bats*** idea that if targetting replaces universalism and the upper middle classes don’t get anything from the welfare state, they’ll march out to vote to abolish it for the poor come from? Quite aside from the fact that you’re assuming utter selfishness on their part, you assume a political party would be stupid enough to propose this sort of thing.

I bet it all comes down to the idea that Tories are evil poor-loathing baby-eaters, doesn’t it? Upper middle class types are Tory, so yep the assumption they’re all selfish must be true. And the Tory party, well they’re Tory too, so they’ll be putting kids up chimneys and the reintroduction of slavery in the next manifesto. Ergo, surefire abolition of the welfare state by 2016. It all slots into place now.

Grow up.

It’s not just the Mail BTW.

This in the Guardian was pure gold – needless to say the comments are entertaining.

http://www.guardian.co.uk/commentisfree/2010/oct/04/osborne-child-benfit-war-families

Best line: “not since China’s one-child rule has there been such a penalty for having kids”

24. Mike Killingworth

[9] Luis, there has always been means-tested access to NHS dentistry and opticians. Perhaps teeth and eyes aren’t part of your core, but they certainly are of mine 😆

25. R. O. Vinton

I thought when the figures were announced that they were far above the average wage, I would be more than happy to make do with just £44,000 per year as it would multiply my pension by 10.

26. Luis Enrique

OK, so there have been elements of NHS provision that are means tested for ages.

What I am asking is whatever it is that the OP is worried about here:

before we know it we will be looking at taking away NHS provision from the richest, on the grounds that they can afford private healthcare

is that regarded as a serious possibility? I’d have thought it would be a vote loser

“Best line: “not since China’s one-child rule has there been such a penalty for having kids””

I’m still pissing myself at that. Waiting for the Josef Fritzl jokes about this now.

28. charlie reynolds

Too late by the way – the ideological fools on the left have already blown the gaffe.

Articles on how stopping CB for those paying higher rate tax is an attack on women / children etc look foolish. They will now be applied as showing how ridiculous and unreasonable the left are. Well done everyone! Thanks for that.

Paying benefits to higher rate taxpayers is bonkers. Simples. The idea that top rate tax payers feel it is ok to be paying tax cos they get it back in benefits is plain wrong. Step away from the ideology on universal benefits.

Can we also lay off the Tories on access to the NHS – they were the only ones who guaranteed NHS funding would increase in real terms at the last election. It looks ridiculous for the left to be moaning on this.

Osborne must be laughing his head off.

29. blanco libre

I agree with Parasite @22 – where is the proof that if the rich don’t get the same benefits as the poor, they will demand the poor don’t get any benefits at all?

Bear in mind, many of “the rich” are part of Labour’s client state – NGO heads, quango chiefs, political civil service appointments, NHS managers, head teachers, and so on.

The right has played a political blinder, according to Rupert Read, not least because their economic ideology should\ve been discredited after the credit crunch, and yet it’s social democracy that’s in retreat across Europe. The left hasn’t got anything.

30. Luis Enrique

Paying benefits to higher rate taxpayers is bonkers. Simples.

No it isn’t. You have to look at taxation and benefits in tandem. If for some reason levels of taxation were fixed, it wouldn’t make sense to pay benefits to the rich if you wanted to be progressive. But taxation is not fixed. You can achieve the same degree of progressiveness, assuming that’s what you’re after Charlie, with different combination of tax/spend. There is no reason to think that putting the progressiveness on the spend side is the right way to go about it, and it is certainly not “bonkers” to want to put the progressiveness on the tax side.

Incidentally, I think this is why it is wrong to think that paying benefits to the wealthy always increases support for those benefits amongst the wealthy. It would if taxes were fixed (because then being paid benefits simply makes you worse off) but taxes are not fixed and I think people are quite capable of realizing that they a given level of benefits entails them paying in tax than they receive. And depending on the nature of the income distribution and taxation schedule, the group of people who are net losers can extend into “middle England”, however defined.

It’s possible that voters also make the error of thinking about taxes / benefits is if the other is constant – if so it’s very hard to second guess going to play out, because it’s incoherent and would involve voters flipping between thinking about taxes as if benefits are fixed, then thinking about benefits as if taxes are fixed.

I think the article is correct on what the political statergy of the cut was.
I’d also add that the Tories had to be seen to take a hit for the good of the coalition as the LD’s seem to have been copping all the collateral damage up to now

Where I disagree is that from Osbornes speech onward we saw something else happen to the Tories.
They panicked and became incoherent.

The chief reason seems to have been that this policy was ‘a clever bit of sofa govt’ that hardly anyone knew about so when they were interviewed they had no line to take .
Thats why we had waves of Tory M.Ps forced into making idiots of themselves on local as well as national media and thats what set the hares running amongst the media .

David Davis saw another easy position to take against cameron.

The tory whips then had to pull rank to rein in the backbench criticism’s

The shit storm started working its way back up the Tory Command until Cameron had to personally intervene with ‘marriage tax’. which undermined the original point of the CB cut and bounced the LD’s into a position they oppose

That had a number of consequences
1. increased the sense of ‘an incompetent govt’ that makes stuff up on the hoof.
2.Showed the govt to be weak and easily intimidated .
3.Increaed tension with The L.D’s

32. Luis Enrique

NB there is tons of research by political economists about how support for spending various with incidence of spending… but I’m not going to take the time to find it right now

33. Luis Enrique

sorry, in comment 30 there is a “worse off” that should be “better off”

Hi Rupert,

At the next election, will the Green Party really prioritise spending £1 billion extra on payments for families earning at least £45,000 in order to defend universalism, instead of using this money to reverse savage cuts in public services, help people on low incomes, reduce carbon emissions or create new green jobs?

I just don’t think this is remotely credible.

There’s another way of looking at this, which is that the overwhelming majority of people want to redistribute from the better off to middle and lower income earners. That’s why at least three in four people back a mansion tax, higher bank levies, cuts in child benefit to the richest 15%, keeping the 50% top rate and so on.

These benefit cuts are helping to fund paying more state benefits to low paid workers – this is hardly a catastrophic defeat for the Left unless we choose to make it one by insisting on a conservative defence of every line of the current welfare state.

35. Mike Killingworth

[26] The short answer is “it depends”. Acute care will be free to all (think childbirth) whilst chronic care is already on the means-tested side of the fence (think psycho-geriatric homes).

Still, it’s good to know that – just as with the 10p tax rate fiasco – making a pig’s knickers of tax/benefit reform is not the private property of any particular political party. Perhaps Rupert would care to outline the shape of the Pooh Trap for Heffalumps a Green government would fall into…

36. blanco libre

I agree with Don. If we believe in progressive taxation and giving back to those who need it the most, it makes sense not to give benefits to the rich whilst taking money away from the poor. If the left is saying, “but we need to bribe the rich with £20 a week otherwise they’ll demand we send the poor to extermination camps!” then a) they have no idea how little £20 is, and b) they must think the rich are evil beings, with a natural disposition to fuck everyone else over.

Seriously, who is coordinating Labour/the left’s political strategy these days? Coalition policies are more in line with what most people think is common sense and fairness, minus the middle class people who depend on Labour’s client state and those professional trade unionists/left-leaning bloggers.

37. Luis Enrique

here is the introduction to a great paper on the political economy of benefits that you can read here

During the 1995-96 debate over the federal budget in the USA, the question of whether to means test Medicare (a health insurance program for the aged) benefits was raised. Representative Charles Rangel, a liberal Democrat who represents Harlem, a predominantly African American and poor district, argued against targeting. As the proposal was to trim the benefits of those households with incomes over $200,000 this was defending the view that the rich should continue to receive exactly the same benefits as the poor. Speaker of the House Newt Gingrich, a conservative Republican from an prosperous Georgia suburb, argued in favor of targeting Medicare benefits. He argued that the rich should receive less generous benefits than the poor. At first glance, such a situation seems a curious political inversion: one politician who regards himself as the defender of his poor constituents arguing in favor of spending on the rich, while a politician usually associated with defending the interests of the wealthy arguing against spending reaching the rich. Moreover, such political behavior seems to contradict both common sense and a fair bit of economics. Common sense suggests that fewer people sharing the pie, means larger slices: means-testing, or targeting, means more for the poor.

Firstly, can I point out I was saying this was evidence of George Osborne’s political nous a couple of days ago. Nice to see others coming round to this point of view (see also http://dizzythinks.net/2010/10/labour-triangulated-on-child-benefit.html). So I’m feeling justified.

But on a couple of other points, firstly a connection between welfare reform and NHS reform cannot be made automatically. Health and welfare, although linked, are seperate – seperate departments, seperate histories, seperate legislation. Ideologically and pragmatically, cutting any access to healthcare would be a no-no (remember there was a pledge to ring-fence spending on health, not welfare). Put bluntly this is because most of use the NHS at least a bit in between elections, whilst far fewer of us need welfare in that time.

And the way in which I suspect the NHS is envisaged as moving under the present government is towards more private supply but still free at point of use – effectively breaking the state monopoly on provision. I doubt they want to adopt an outright insurance-based model, if only because they don’t work.

So I think arguing that we have to defend the NHS by opposing cuts to the rich’s child benefits is going to be a no starter – firstly, because it makes unjustifiable assumptions about your political opponents based on what you believe not what they say (not a good way of winning an argument – its the political equivalent of sticking your fingers in your ears and sining ‘La-La-La-La’ very loudly). But also, because there is a clear conceptual difference between welfare – which is a universal benefit, not something to be universally applied – and healthcare, which is universally applied.

This is not to mention the fact that in coming up with this announcement, Mr Osborne knows exactly what Mr Duncan-Smith is planning with welfare – I would suggest that if you are right that univeralism is an issue, this will be dealt with there in one way or another.

Overall in fact, I would suggest politically the wisest thing for left-wingers to do here is nothing – I cannot help but feel that there is a possible second wave of traps and plans waiting for you if you go round condemning this on any grounds. The government have the initiative, and they are currently using it well (perhaps because they are not constantly coming up with ideas, but focussing on a few).

39. Luis Enrique

Don in light of your comment @34 would be interested to read your reaction to arguments made in paper I link to @37

40. Shatterface

There does seem to be a swing in favour of the cut finally – or at least a less irrational reaction to it. Everyone accepts the idea that limited resources should be targeted at those who actually need it whatever the ideological advantages of giving to the rich in the hope of gostering solidarity with the poor: we don’t give JSA or IB to working or fully fit people, for instance, so ‘universalism’ is hardly, um, *universal* in any case.

One thing not mentioned so far is that the administration of a fairer system gives the civil service a stronger defence against job losses – surely there are those here who would support that?

@Luis

I agree with these arguments in the paper:

“the first conclusion is obvious, but often ignored: a policymaker who accurately takes into account the reaction of voters to targeting can always do better than one who ignores electoral politics”

“If leakage is large so that middle income agents are very likely to receive the targeted transfer, then there is always some positive amount of targeting that will increase poor agents’ utility in political equilibrium”

I think the CB changes meet these two conditions – reaction of voters has been overwhelmingly in favour of the principle (though not implementation) of these cuts, and the amount of targeting proposed increases the advantage to lower income people.

I’d also argue that advocating tax rises instead will end up with worse outcomes for the poor, as it ignores electoral reality of unpopularity of tax rises.

It is a very interesting paper, thanks.

42. Shatterface

‘In the long run the child cut benefit for the richest will turn into a tax cut for the richest because they will start to wonder why they pay all the tax but receive nothing back.’

Six weeks after the rich lose the benefit they’ll have forgotten they ever had it.

43. blanco libre

Labour needs to come up with a better vision of the welfare state than “we should keep it the way Clement Attlee wanted it 60 years ago”, FFS.

Rupert –

“someone earning £45k a year (the very least that someone now about to lose child benefit will earn) is earning twice the median income.

Twice the median: that is hardly the middle.”

I don’t think you’re right on this point (though I’m very much in agreement with most of what you say).

When working out where somebody sits in the income distribution, you have to take their dependents into account: so a single person living on £45k is certainly near the top, but a family of five living on £45k a year before tax would actually be very much in the middle – i.e. around 50% of people would be better off than them. You can crunch the numbers on the IFS website here:

http://www.ifs.org.uk/wheredoyoufitin/

I think there is something in the argument that the removal of the universality of CB is designed to weaken some groups attachment to the state. I remember reading after the election some Tories complaining that the electorate maths meant they simply could no longer win outright. The feeling was that too many groups had some monetary attachment to the state and therefore were skeptical about a party promising to shrink the state. However, it is doubtful that this change in eligibility is going to get the affected demanding penury for the poor in revenge. I’ve been getting this benefit for five years and do not need it. Personally I send it to Save the Children UK. Although I can see the universal point I think it would be better just to give more to the people who need it most.

Shatterface –

“Everyone accepts the idea that limited resources should be targeted at those who actually need it whatever the ideological advantages of giving to the rich in the hope of gostering solidarity with the poor”

So everyone accepts that state pensions should be paid only to people without adequate private provision, do they? And that the NHS should only offer treatment to those who can’t afford private health insurance? And that state schools should not admit pupils whose parents could afford private education? Oh no, hang on a minute – *hardly anyone* actually accepts that. On the contrary, most people (on the left, anyway) think these things should not be ‘targetted’ at all, and that if our resources start to look too ‘limited’ to keep it that way we should simply squeeze some more resources out of the better-off through taxation.

“we don’t give JSA or IB to working or fully fit people, for instance, so ‘universalism’ is hardly, um, *universal* in any case.”

This is just silly. We don’t give chemotherapy to healthy people, or old age pensions to six-year-olds either – but everyone knows what it means to say the NHS is a universal service and pensions are a universal benefit. It means everyone, rich or poor, has access to them *at the appropriate time* – the NHS when they’re ill, a pension when they’re old.

47. blanco libre

Is the appropriate time to receive child benefits when you are earning in excess of £44k, Richard W?

48. C'llr. Rupert Read

Alasdair, I think you are right; means-testing for the NHS may be close now. AS LC and leftFootForward have been warning:Watch out for Lansley, darling of the healthcare companies.
Have a read of Alyyson Pollock’s ‘NHS plc’ – the NHS is now ripe for full-scale privatisation.

49. C'llr. Rupert Read

Don (34): you are probably right about this. But that is what is so clever about this proposal now, and why it should be opposed and understood clearly now. Once the principle of universalism has been abandoned, it is almost impossible to claw it back. The Tories have made a move here that is going to change British political culture permanently. Whether they intended it that way or not( and I suspect that they did), it is an act of dastardly political genius, a real long-term reframe which makes things very hard for us.

50. C'llr. Rupert Read

@22 @29: Look at what has happened in many latin American countries. The rich essentially opt out of the state altogether, and try to demand that it becomes stripped down to provide absolutely minimal provision.

51. blanco libre

The idea that giving richer people a measly £20 back from their taxes will stop them from demanding the government take less off them in the first place, is nonsense.

Promote what the government does give everyone, rather than trying to bribe them with twenty fucking quid.

52. C'llr. Rupert Read

Further to @50: Do follow the links that I put in the original article. See also http://www.fabians.org.uk/images/stories/pdfs/The_Solidarity_Society_Exec_Summary.pdf , for example this from p.19 thereof:
‘Perhaps counter-intuitively,
welfare systems which are focused on addressing
‘poverty’ do worse in poverty outcomes than broadlybased
systems which aim to reflect a shared sense of citizenship
across society.’

53. C'llr. Rupert Read

Thanks for all the great comments, btw, including G.O at @46, Nishma’s, etc. . I think the comments string here may offer us some resources for not making the same mistakes in the future.

54. blanco libre

Rupert, I pay far more into the state than I get out in terms of cash – but I do get the NHS whenever I need it, I get subsidised public transport, I know that if I lose my job I will get unemployment benefits, I can send my kids to primary and secondary schools without paying fees – so what you need to do is promote what the state provides with people’s taxes and what we get for our taxes (pound for pound).

£20 doesn’t make a difference to me.

The biggest problem you’ve got is that while “universalism” – or your rather literal definition of it – might be the reason you wish to oppose the CB removal, that reason isn’t going to resonate at all with voters, certainly not the 90% of voters who earn less than £44,000, is it?

You will have to come up with another reason.

What’s that going to be?

I think Ed M would be wise to go on the attack on this issue, but not in the way that some suggest – simply on the grounds that Cameron and Clegg and Osborne and Cable all spoke up for universal CB before the election. Ed could frinstance quote them all verbatim and score an easy win. But as Don has already implied there are going to be much bigger battles to fight over the next few years, complaining constantly about taking benefits from the rich makes the left look a wee bit churlish.
Oh and Ed should also play up the fact that a family on £83K can still get CB when a family with £44K won’t (so long as the two-earners family both earn just under the threshold) – that blows a huge hole in the so-called “fairness” agenda.

57. blanco libre

Rupert, the left needs to come up with a political strategy that isn’t just “attack the Lib Dems/oppose all cuts/re-elect Labour and some Greens”.

What’s the vision? What’s the alternative that the public will buy (i.e. don’t try to say no cuts are needed at all, and that the size of the state, and all the quangos, and all the waste are perfectly fine as they are, and let’s borrow even more!) ?

It’s like John Harris says in his last Guardian video, the Tories/LDs have an idea about what to do with work/pensions/benefits/taxes. There is a gaping hole in those ideas on the left, where all I can see is pleas to make things as they used to be, to stick to 1945’s vision.

@blanco libre

You make it sound like the coalition has had an original idea. They haven’t – their entire ideology is an amalgamation of Victorian self-help and Thatcherite small-state, with some fluffy words about “the big society” and some Orwellian words about “the national interest” added into the mix. Hardly revolutionary.
Yes, the left needs some new ideas, and thank Christ that David M didn’t win the leadership contest. But don’t pretend that this gov is anything other than a reactionary throwback to some of the most loathsome political philosophies that have infected British mainstream politics in the past 200 years.

“But that is what is so clever about this proposal now, and why it should be opposed and understood clearly now. Once the principle of universalism has been abandoned, it is almost impossible to claw it back.”

I don’t think this is right, though I understand the concern.

There is nothing stopping us from proposing new universal services which would be popular. Labour introduced all kinds of universal extensions to the welfare state which were popular. We could accept that child benefits go only to 85% of families, but argue in favour of universal childcare, for example.

btw, echoing others, I think this has been an excellent discussion, very interesting points on all sides.

47. blanco libre

‘ Is the appropriate time to receive child benefits when you are earning in excess of £44k, Richard W? ‘

Of course not, Blanco. That was the point I was making. I will not get it now but never needed it in the first place. Moreover, I am skeptical whether it has much effect as a bribe so to speak.

This is a very interesting and important piece. I agree with your three points, and especially that this is the thin end of a very large and dangerous wedge, about which we need to be absolutely clear-eyed.

However, introducing means testing would have created robust debate whenever it was announced, including in the context of the full package in a couple of weeks.

Its still not clear to me why it was announced on Monday, and especially why cabinet colleagues were not informed of the timing of the announcement. There seems to have been a sudden change of plan. Why?

I doesn’t quite make sense to me that they would screw up their conference just to get the political advantages that would come to them anyway if it were announced later. There must be a reason why the speech was changed at the last moment (say late on Sunday evening or on Monday morning).

The Telegraph thought it was to put Ian Duncan Smith on the wrong foot in their hard-fought inter-nicene struggle, which is possible. Duncan Hothersall suggested it was to divert attention from the extremely grave allegations made in Channel 4’s Dispatches the previous evening (http://dhothersall.blogspot.com/). I find this really plausible, but widely undiscussed.

If diversion of attention from criminality is the reason, this would be extremely serious, given the gravity of the allegations made against Andy Coulson and the Metropolitan Police, and indirectly against Murdoch himself and all his flying monkeys.

Moreover, if this was the stratagem, exposure of it would give Labour and the rest of us a huge advantage in responding to the whole budget cuts framework, and, not unimportantly, help to put a stop to the terrifying reality of Murdochism being administered intravenously into our political system by Mr. Coulson’s dark and sinister presence in No. 10.

It would be both interesting and potentially important, I think, if Liberal Conspiracy would address this question of why Cameron and Osborne suddenly added the announcement of means testing to the conference agenda, without consulting their colleagues.

cjcjc –

“The biggest problem you’ve got is that while “universalism” – or your rather literal definition of it – might be the reason you wish to oppose the CB removal, that reason isn’t going to resonate at all with voters, certainly not the 90% of voters who earn less than £44,000, is it?

You will have to come up with another reason.

What’s that going to be?”

Fairness.

In general, someone with kids has less money to spare than someone on the same income without kids. Therefore they should make a smaller net contribution to the national piggybank. (Child Benefit started life as a Tax Allowance, and that’s the job it’s still intended to do.)

And on deficit reduction in particular: if we want higher-rate taxpayers to contribute £1 billion to the cause, we should put up their taxes so that they all pay a few hundred pounds, rather than those with children paying a few thousand.

64. blanco libre

@Mr S Pill

Are you kidding me? This is just an extension of what Labour were doing. Your party laid the groundwork. Whatever solution there is to this miss, it won’t come from your party.

@blanco libre

Source, please, for the statement: “This is just an extension of what Labour were doing.”. Bear in mind that no party put this policy in its manifesto… and it didn’t even make the Holy Bible of the Government known as the Coalition Agreement (reality – if you Lib Dems let us Tories fuck over the public sector then you can have an AV referendum).

Also: if Labour aren’t going to have the solutions, where do you imagine they will come from? The Green Party – much as I love ’em – have neither the political clout nor public credibility to make the arguments. I highly doubt you are recommending consultation of the SWP/Respect gang.

You may of course think that the LDs are going to come up with the answers, but I’ve not heard a peep out of any of the Yellows thus far. And I’ve not heard Clegg disagree with anything the Tories have done or got planned. This is a “coalition” in the same way that the UK and the US have a “special relationship”.

“In general, someone with kids has less money to spare than someone on the same income without kids.”

So do people with horses.

Is it fair that the taxes of a childless 20k earner support the spending of a 45k (and +++) earner simply because the latter may have kids?

That is the obvious response.

Also see link to Guardian comedy gold @23.

Shorter Joseph Harker: “but it’s not FAIR, my five kids need their music lessons…”

I wouldn’t use him as your poster boy anyway!

69. Luis Enrique

cjcjc

yes but the honest and accurate (left wing) response would be that we designed the tax system so 20k earners are not paying child benefits for 40k earnings, because 20k earners are net beneficiaries and 40k earner net payers. 20k earners pay less in tax than they received from the govt spending. All the system does is give 40k earners with children a break relative to 40k earners with out children.

you may be right that no politician is going to dare explicitly state the truth, and will witter on about fairness

Yes, but I thought the argument was about making sure the kids were not starving.

Not that the childless well-off should subsidise well-off parents.

71. Luis Enrique

sorry, I should have written “All the system does is make sure the children of the poor aren’t starving, and then as income rises its shifts from being a net benefit towards merely giving high income parents, who are net payers, a break relative high income individuals without children”

or something like that.

really, unless you look at tax and benefits as a whole piece, you go wrong.

perhaps, however, politicians need to take into account that most people instinctively do not consider the two together

72. Cllr. Rupert Read

I agree with G.O at @63 (and with Don at @60 🙂
In answer to blanco libre: The positive programme I myself would stand by right now is pretty much the Greens’ manifesto from the General Election. Central to which are the Green New Deal, opposing the cuts as economically illiterate, pressing for Wilkinson-and-Pickett-style egalitarianism (ie. keep benefits, but increase TAXES, etc.) and then over time, having stabilised the economy, move toward a dynamic equilibrium ‘steady-state’ economy and society. See e.g. http://rupertsread.blogspot.com/2010/07/against-growthism-and-how-to-understand.html
http://rupertsread.blogspot.com/2009/11/shared-progressive-agenda.html
But probably this is a subject for another post, and not something that we need to be obliged to discuss (let alone agree on) here…

cjcjc –

““In general, someone with kids has less money to spare than someone on the same income without kids.”

So do people with horses.”

Sweet Jesus.

I don’t know what to say to this, really. If you seriously believe that, when assessing the net contribution someone is able to make to public finances, we should view their dependent children as luxuries they can choose either to spend money on or not to spend money on, I don’t see that we have enough basic values or beliefs in common to be able to engage with each others’ points of view.

@cjcjc

That argument would have some credibility if horses and cats grew up to become productive and helpful members of society and if it was in everyones interests that they had the best possible start in life.

And that’s why I have no problem with CB up to the point at which it starts to be spent on (adult) clothes and booze.

“Child benefit is spent, at the margin, on adult-assignable goods…it is parents who benefit from unanticipated variation in child benefit.

They estimate that for a couple not on other benefits with one child, a £1 rise in child benefit is associated with a 49p rise in spending on alchohol, a 40p rise in spending on adult’s clothing, but only a 1.4p rise in spending on children’s clothes.
For lone parents, 70p of a £1 rise in child benefit is spent on women’s clothing and 21p on alcohol.”

http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2010/10/who-really-gets-child-benefit.html

“In the long run the child cut benefit for the richest will turn into a tax cut for the richest because they will start to wonder why they pay all the tax but receive nothing back.”

DING DING DING…… WE HAVE A WINNER.

I am sure the wealthy will put up with it because they can look forward to big cuts in inheritance tax in the future. But the break will be damming to the idea of universal benefits which is what this about. The rich will increasingly go for a “I got mine,, fuck you” attitude which is what the tories want to encourage.

Shorter sally troll: all tories are brownshirts, you are all tories, ergo you are all brownshirts

79. Charlieman

@77 Sally: “I am sure the wealthy will put up with it because they can look forward to big cuts in inheritance tax in the future.”

Logic query.

Inheritance tax is paid on the estate of dead people. The tax payer (for whom the executors are agents), in this instance, cannot benefit from a reduction in tax because they are deceased.

Some people may expect that Uncle Fred will drop dead next year and deliver a healthy estate. They might hope that government increases inheritance tax thresholds that come into effect in April 2011 or beyond. Short of murder, it is difficult to imagine scenarios where potential beneficiaries might modify the date of demise. Potential beneficiaries are depending on luck of timing and Uncle Fred’s whim.

The threshold for IHT is relatively modest but few estates meet it. And anyone with an ounce of sense who has a big estate will have employed an accountant to minimise IHT liability.

Thus “I am sure the wealthy will put up with it because they can look forward to big cuts in inheritance tax in the future.” makes no sense. Unless the wealthy come up with a device that allows them to take money with them when they pass over.

79

Do people pay capital gains tax on their inheritance?

Why not? It is a capital gain.

Because the tax has been paid on the estate of the dead person.

Scrap inheritance tax, and then charge capital gains tax on the beneficiary. Fine by me.

Rupert, Haven’t some Green Party folk argued for removing CB for all families who have more than two children – and indeed other benefits. I think it is to do with population reduction – is this a left-wing or right-wing policy?

82. Martyn Churchouse

Great and accurate piece.

Another reason that this is a Tory masterstroke, and one that many on the left don’t seem to be interested in, is that it hits the very people who make up one of the largest growing sectors of support for the Labour party. In other words people who are very unlikely to vote Tory anyway and who can be discounted. On the other hand it may appeal to, and bring back to the party, the ‘Sun’ reading masses who may not have voted at the last election.

Plus, as you rightly say, the froth and focus of the media gives the Tories space to appear ‘fair’ on this one issue when they should be answering hard questions, not only about the strange anomalies that this policy throws up, but also about how their other, deeper cuts will affect very much poorer people.

I don’t believe, unlike some sections of the left media, that this was a ‘rushed’ policy. I think this smacks of being planned to the last word and effect. In other words we have been lied to for five months – I’m not altogether surprised.

Thanks for the article.

Steve; yes, a few Greens have argued that. They haven’t got anywhere, though.

I’m flabbergasted that a “green” should actually want to subsidise people to produce children. As though there aren’t enough carbon-emitting human beings in this country, and the world, already.
You’re no green, Rupert. You’re a member of the Green Party.

Turns out I followed Rupert’s advice, having not even read this until now.

http://www.betternation.org/2010/10/fairy-tales-on-the-economy/

Thanks Martyn, and nice piece, James.
Trofim (Sp.? – presumably that should actually read Trollfim): If you think it is G/green to penalise the life-chances of kids born to parents who have chosen to have large families, then you don’t understand much about being g/Green. We are about being caring and sharing, and not just about trees…. Furthermore you seem to be implying that people are induced to have children by the current level of child benefit. An unevidenced, offensive and ludicrous piece of Reaganite urban-mythery.

Rupert Read@86:

People are certainly rewarded for having children, if not induced to, by the present system. “we are about caring and sharing”. Caring isn’t a function of governments, nor sharing. And as for “Reaganite urban-mythery” – you’re showing your level of intellectual honesty here. I bet Howard Kirk is your role model at work. (Oh, I mean, apart from Flora Beniform – after all, I wouldn’t to say anything offensive).

88. Mike Killingworth

[87]

Caring isn’t a function of governments

I have just returned from visiting my wife – who has had a diagnosis of MS for most of her adult life – in the long-stay hospital in which she is resident. Do you think, Trofim, that the government is wrong to pay for (the great bulk of) her care there?

@Trollfim: My turn of phrase was of course tongue in cheek: but I actually do believe that government should be about encouraging caring. And sharing!

The debate is effectively continuing here, in this useful piece:
http://liberalconspiracy.org/2010/10/08/four-reasons-why-we-should-be-defending-the-middle-classes-too/
[Though the second reason given here is mistaken, and the fourth just repeats more briefly the key reason that I have already focussed on: the need to defend the principle of universalism, if we want to end up with any welfare state at all apart from a threadbare miniature safety net.]


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  1. Liberal Conspiracy

    Three reasons why the child benefits fiasco is a Tory master-stroke http://bit.ly/bdzLub

  2. yorkierosie

    Three reasons why the child benefits fiasco is a Tory master-stroke | Liberal Conspiracy http://t.co/XnbGQAS via @libcon

  3. Pete Owen

    RT @libcon: Three reasons why the child benefits fiasco is a Tory master-stroke http://bit.ly/bdzLub

  4. paulstpancras

    Three reasons why the child benefits fiasco is a Tory master-stroke | Liberal Conspiracy http://t.co/3lgPcf2 via @libcon

  5. Maureen McLaughlin

    RT @paulstpancras: Three reasons why the child benefits fiasco is a Tory master-stroke | Liberal Conspiracy http://t.co/3lgPcf2 via @libcon

  6. Parlez~me~'n~Tory

    Very interesting piece by Rupert Reid (liberal Conspiracy) worthy of a read: http://bit.ly/9Ryzsv

  7. the credo

    RT @Parlez_me_nTory: Very interesting piece by Rupert Reid (liberal Conspiracy) worthy of a read: http://bit.ly/9Ryzsv #ukpolitics

  8. Sarah Murison,

    RT @yorkierosie: Three reasons why the child benefits fiasco is a Tory master-stroke http://t.co/XnbGQAS via @libcon

  9. sallymumbycroft

    RT @libcon: Three reasons why the child benefits fiasco is a Tory master-stroke http://bit.ly/bdzLub

  10. Linda Jack

    “@libcon: Three reasons why the child benefits fiasco is a Tory master-stroke http://bit.ly/bdzLub”>interesting perspectve

  11. Gareth A Hopkins

    RT @sallymumbycroft: RT @libcon: Three reasons why the child benefits fiasco is a Tory master-stroke http://bit.ly/bdzLub

  12. Alex Wilks

    RT @libcon: Three reasons why the child benefits fiasco is a Tory master-stroke http://bit.ly/bdzLub

  13. Stuart Carter

    Three reasons why the child benefits fiasco is a Tory master-stroke http://t.co/FAPNyLC #libdem #tories

  14. Kieron Flanagan

    RT @libcon: Three reasons why the child benefits fiasco is a Tory master-stroke http://bit.ly/bdzLub

  15. Gavin Duley

    RT @libcon: Three reasons why the child benefits fiasco is a Tory master-stroke http://bit.ly/bdzLub

  16. andrew

    Three reasons why the child benefits fiasco is a Tory master …: RT @Parlez_me_nTory: Very interesting piece by R… http://bit.ly/9ZDcNv

  17. Rich LLoyd

    RT @libcon: Three reasons why the child benefits fiasco is a Tory master-stroke http://bit.ly/bdzLub

  18. Richard Honeysett

    RT @libcon: Three reasons why the child benefits fiasco is a Tory master-stroke http://bit.ly/bdzLub /via @alexwilks

  19. James Evans

    RT @kieronflanagan: RT @libcon: Three reasons why the child benefits fiasco is a Tory master-stroke http://bit.ly/bdzLub

  20. Ben Coleman

    Three reasons why the child benefits fiasco is a Tory master-stroke | Liberal Conspiracy http://t.co/kizxdgc via @libcon

  21. Three reasons why the child benefits fiasco is Tory master-stroke…. « Broad Left Blogging

    […] article was cross-posted from Liberal Conspiracy with the kind permisssion of it author, Councillor Dr. Rupert Read. Rupert Read has been a Green […]

  22. Jason Kitcat

    I agree with Rupert's analysis RT @GreenRupertRead Three reasons why the child benefits fiasco is a Tory master-stroke http://fb.me/LsIRuiJ7

  23. Louise Richardson

    Evil genuis RT @libcon: Three reasons why the child benefits fiasco is a Tory master-stroke http://bit.ly/bdzLub

  24. links for 2010-10-08 « Embololalia

    […] Three reasons why the child benefits fiasco is a Tory master-stroke Most crucially, all the attention on those poor parents earning anywhere between £45k and £Infinity is taking attention away from what really matters about this: the negative impact it is going to have on the welfare state because of a universal benefit being taken away from the rich. The poorest welfare states are in fact those which are designed only for the poor. […]





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