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Child benefit cuts threaten us all

Why do I feel so strongly that the child benefit cuts announced by George Osborne are wrong? One of my first reactions was that it might help reduce the numbers of four-by-fours parked outside the primary school. It is a feeling not far removed from that of Deborah Orr in the Guardian today who writes:

It is difficult to tax the rich, we’re often told, so it seems rather silly also to continue giving the rich unneeded benefits to spend on what are to many families quite unattainable luxuries. The idea is that child benefit makes the wealthy feel that the welfare state is on their side too. The reality is that too many of these buggers need reminding of how much they gain already.

Yet, I feel the principle of universal benefits needs to be preserved. They don’t have to be taken (eg sending children to private schools instead of using the state sector or having private health insurance) or can be passed on to charity (winter fuel allowance). But they are there for all as a bedrock for a stable society. Cutting child benefits or the wealthy makes the next assault on universal benefits easier.
The fact that the proposal is ill thought out is beside this point but it is very worrying that this comes from a Government whose Prime Minister is hammering on about fairness.

As Richard Murphy in his Tax Research UK blog points out it is a “massive boost to the tax avoidance industry”. Before explaining several ways of avoiding the cut he writes:

For a family caught by the change the parent of two children  with income of just over the limit faces an effective 100% tax rate on all income in a rage from about £44,000 to £47,000. That is a gift to the tax abusers.

You would expect a blog called Left Foot Forward to be against the restrictions on child benefit, but I was taken with a quote from Richard Titmuss, the pioneering social researcher, who said, “Services for the poor will always be poor services.”

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