Every little hurts

It's strange to see Labour and the usual lefties on the news channel moaning about a cut in benefits to high income earners!

'morally indispensible.'

Presumably you mean indefensible.

The child benefit removal will prove to be Osborne's 10p tax rate moment. When his backbenchers realise how many of their mid-incomed constituents are going to be at least £1040 worse off a year they will force him to either means test it or give it back.
George policy on the hoof got Brown into trouble learn quickly please.

I have to say that this is an atrocious policy. That may be Nimbyism at its height but George will remove £2500 from the economy when he takes this away from me. I am the single earner in our family and due to inflated rents caused by housing benefit I have no spare cash to spend. I will have even less in 2013.
I look into see getting on to incapacity and then into the black labour market. Then it might be worth working for a living.

Nick Robinson.

"So, why has the Chancellor risked the charge that he's broken his promise to preserve child benefit in order to save just a billion pounds?"

why does Mr Osborne delay introduction of the new rules until 2013, losing an additional £2bn?

"In part because this all makes it politically easier for them to tackle a welfare state the Chancellor calls financially unaffordable and morally indispensible."

but does he government need reasons? as long as they can keep us innundated with FUD (terror attacks 'imminent', migrants 'swamping' the country, etc, etc), they can do as they please, and knowing the cynical career opportunists that masquerade as politicians these days (the Blair's and the Cameron's of this world), they will. I would not be surprised if, a few years down the line, we will have to doff our caps again.

100% behind George on this one...if only it had been done years ago! Great work George!!

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I remember the Labour Government breaking promises. For instance they promised not to privatise Air Traffic Control. They also promised that "Things would be better...!"

So I don't really know why we have election campaigns, if we can't rely on anything that is said during them....

Having said that, I think George Osborne is absolutely right to break that promise. I've actually encouraged him to do so, via my own blog, by writing to my MP and via the public consultation exercise. He retains my full confidence and continues to recieve my full support. He's doing the job that so desperately needs to be done. The consequences of him ducking his responsibilities are unthinkable. We had a taste of it two years ago, but UK PLC going bust would be far worse than the problem we had with the Banks...

@HowDoYou

It is the interweaving of compassion and intelligence within your answer that will no doubt impress someone.

When my children were growing up I was a higher rate taxpayer. I thought it absurd that the state was paying me this money which I didn't need. It went towards the holidays.

Quite right Mr Chancellor, there must be better ways of spending public money!

How can it be possibly fair that this doesnt apply to the total household income ??? so 2 people on 40000 will get it whereas 1 on 45000 wont ???typical of our political class they they would see something like this as Fair

madness....

its about time we had the details of how many Mp's we are going to lose in ALL the parliaments afterall we are all in this together and we have to be tough....

In principle it's absolutely the right thing to do and should have been done a long time ago. As to whether the finer details of the changes are a good thing or not, we'll have to wait and see how they stand up to close scrutiny.

Makes alot of sense to me. why should those that dont need the benifit use it. give the children of the poor a way out of poverty. dont give money to the rich and spoilt so they can have even more

Under this reform if my employer offers me anything more than a £150 pay rise then me and my family would be about £2000 a year worse off!

Is this the clear and understandable system that we should look forward to? What kind of system leaves me worried that my employer will offer me a pay rise

I don't mind loosing it, but I feel very sorry for those single earners on £44,000 who do when they look over their shoulder and see those on 2 x £40,000 who do not...surely it's fundamentally unfair...and even more surely a simple calculation based on a computer search for a shared address for the majority will seek out those £80,000 duo earners who should be loosing this...it's not rocket science.

Labour supporter but good on him! £44,000 pa per household is a lot of money with either one or two earners in the family whichever way you look at it. Surely most other Labour supporters couldn't gripe at this one., Beats me how they're still too generous to the " haves" in my book. And yes, we did earn £45,000+ (just) between the two of us in the recent past and, believe it or not, felt ourselves fortunate to do so.As for £26,000 benefits pa, it also beats me that anyone would be incentivised to work if they could clear that sitting on their lazy butts.Blimey!! I'll be called a closet Tory, but let's get real and stop being a honey trap for people all over the place deciding they'll take us (the tax payer, that is) for a leisurely ride at our expense.

The real problem with this is the claim that it is 'fair'. How is it 'fair' to remove a benefit from a household where there may be one income of £44,000, but allow it to stay for a household for two incomes of £43,000.

How much close scrutiny does it take to work out that a couple on £80,000 continuing to receive child benefit while one on £45,000 losing it is wrong! Child benefit may have been due for reform but this is ridiculous. Come back Gordon, all is forgiven.

You're doing it too, Nick: "So why has the Chancellor....in order to save just a billion pounds."

What do you mean "just a billion pounds"? Don't be ridiculous. The chancellor needs to reduce spending by hundreds and hundreds of billions of pounds, so that we caan start to pay back debt. This will not come from any one place. We all have to cuut back on everything, and pay more tax.

Stop echoing messages that talk of "only a billion" or even "only a million." Big money is often made in individual tiny pieces (think of a chocolate company or a dairy); likewise savings.

I don't understand all this objection to the cut in Child Benefit. My parents and others like them had no support whatsoever for any child. It was considered that the husband would provide both for his wife and any children that were born, so why should people now consider it as a right to obtain extra money from the State to look after their children. You, as parents decided to have children, so provide for them yourselves.

@12 djlazarus

Exactly. All the people throughout this site complaining that they won't manage now on 'only' a minimum of £45k/year upon losing child benefit. Where have these people been for the last three years? Did they really think they would remain unaffected?

So many insulated people in this country of ours, they tut-tut at the news but think they're somehow special and above all of that. The howls of indignation, the squeals of anguish will be heard for many, many months to come and hopefully one day when we pass through to the other side and realize that paying £5 for a coffee at Starbucks probably wasn't such a great idea after all this country won't be full of people full of their own inflated sense of self worth.

I can only hope.

@9 stratstrangler

I'm not interweaving anything, just being brutally honest. Even now people refuse to see what's coming. They'll be the first who find themselves unable to 'cope'.

People on lower incomes are the ones that need the child benefits not the very wealthy. I can understand if you have paid a lot of tax over the years you could be annoyed when you don't get the weekly allowances in reality they don't need the money. what is worrying me as much is how much tax benefit either families or single people on low incomes will lose to the cuts.

In principle I agree with George Osbourne's approach as it does seem strange to award those earning over £44K child benefit while we are trying to get the economy back on track. I am in a household that will be affected, but we all have to feel the pain.

Where I think he has failed (or at least mis-calculated) is that it should be calculated on total income rather than on any single salary. It does seem strange that families with around £80K of income would still receive child benefit. It does kind of contradict the central message.

Hi Nick,

I just thought I would use this conduit to say how embarrassing it was to watch the shambolic interview of the Chancellor by your business correspondent on Breakfast Television. Even as George Osborne was talking, I could see the problems with the proposal that Child Benefit eligibility should be determined by the highest earner rather than total household income. I was willing your correspondent to raise this issue. Instead he got launched into a disagreement with the Chancellor as to the threshold salary for the higher rate of tax. It turned out that your expert didn’t understand the difference between gross pay and taxable pay. I work as an Engineer, but I know more about finance, business and taxation than he does. He earns a lot more than I do and he has zero charisma. Why is the BBC employing him? If they wish to cut costs, then they could easily employ someone twice as good for half the pay.

A while back your regular correspondent wasn’t available, so instead we got a lady whom at 7.20 am mistook the closing figure for the FTSE with the current price. Apparently, her expertise didn’t extend to the knowledge that the Stock Exchange is not open at that time of the morning. This is all so insulting to the intelligence of your viewers.

I don't get the fuss, a family of two earning £43,875 each historically have paid a lot less tax than a single earner of £87,750 in the same family setting. Nobody cried foul about that long-standing fact in all these years, not one word of outrage from Mr Robinson and co. So just why all of sudden is this kind of anomaly such a huge outrage for the bbc and it's commentators?

HowdoYou,
"You can't manage on a salary of £45k+? You're beyond hope then."
A salary of £45K takes home around £2.5K per month after taxes, NI, pension deductions etc. Paying a mortgage, council tax, utilities, insurances, running a car, maintaining your home, feeding and clothing a family of 2 adults/2 children easily amounts to that figure.
And what if that single earner is also a single parent - mortgage and childcare alone would leave you with less than £1000 for all the other mentioned costs.
Yet double income households earning just less than twice as much are exempt. Why not just set the bar at a higher individual salary?

Apart from the obvious anomaly of a couple earning £43k pa each keeping CB while a single earner of £45k pa losing it, this is great idea! Surely the easiest way to get round this, without the need for a white elephant complex and expensive IT system, is to scrap CB totally and increase CTC accordingly? Or is that too simplistic and/or sensible?

I offered my wife a choice - keep the child benefit or divorce me. I told her she had two years to think about it. When i got home from work she said she's decided to stick with me and give up the cash :)

Hey,why not make benefits universal.Thus there would be no disincentive not to work,ie. you would lose no benefit if you did work. This would have two major advantages:
i) Everyone would be committed to the system
ii)It would be far cheaper to administer

Marginal rates of tax would disappear and monies given to the wealthier could be clawed back via progressive taxation.

Some chap called Beveridge had this idea sometime ago...

Today, Osborne finally began the process which kills it off...

Who created the "lifestyle choice" to be on benefit ?

Invalidity/Incapacity benefit claimants 1979...700,000
1997...2.5 million
2009...2.6 million

(www.publications.parliament.uk/pa/cm201011/cmselect/cmpubacc/404/40405.htm)

The fact is long-term unemployment began in the early 1980s and ballooned under the last Tory govt. The ploy as you can see from the above figures was to hide this in IB. This was perpetuated by NewLabour but as you can see the figure between 1997 and 2009 has hardly changed.

Benefit dependancy in no way started in 1997...in fact it has been kept in check since then.

Oliver Letwin said today that under NewLabour the economy has become "over reliant on welfare with mass unemployment accepted as a fact of life..."

He is wrong.

Does anyone on £45000 a year really "need" to be receiving state benefits? It's a nice bonus of course, but need is another matter.
How the limit is applied will always be contentious, and will involve an element of rough justice. If the limit is household income rather than individual income, there will be arguments about what constitutes a household; is it just married couples or does it include cohabitation? What about couples who separate etc? There is no answer that will please everyone.
The couples on £80000 who get it under the current proposals should just count themselves lucky. The £45000 plus group who lose it just have to shrug their shoulders.

This is a an attack on stay at home mums who choose to take care of their own children. I cam get no clarity on what the situation is with Ni stamps that are credited to the payee of child benefit I guess they'll penalise us again by removing that. George Osbourne is out of touch with real hard working parents. It's the type of policy that will drive families apart.

If a woman cares for children at home and receives CB her NI contributions are maintained and thus her state pension protected.

Now,if her partner earns £45K + then does it mean as she does not receive CB her NI contributions are not maintained and thus her state pension protection stops ?

Or haven't they thought of that...

OK so it was just too difficult to get it working properly so lets just come up with something and call it reasonable and everyone paying their share. Lazy.

Why not just put up the 40% tax rate to 41% (or probably even less than that to raise £1bn), could even shove the 50% one up a bit too.

I reckon that would take out a bit of the anomaly in this half-baked measure.

(I realise this would hit people without kiddies - sorry)

Just in case this attracts any insults from some of the wackier bloggers, I will (happily) lose out under both these suggestions - the good one and Osborne's one, more so under the good one because of being lucky in life.

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@26 blueskysunshine

Yes fantastic idea, let's make it £100k, we wouldn't want people going without now would we?

So please enlighten me as to how all the people in this country earning the national average of 25k manage to get through each month without starving to death? Oh I know, they'll still get £1k/year in child benefit, silly me.

You need to get your head out of your self imposed cloud.

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"How is it 'fair' to remove a benefit from a household where there may be one income of £44,000, but allow it to stay for a household for two incomes of £43,000?" - 17

Probably isn't (fair) but one point occurs: where there are two incomes it means both are working, which in turn means childcare costs are more of an issue - thus they need the money more. Maybe.

It's also in line with the tax principle of treating each adult as an individual.

It's not that this isn't a quick saving which I can see makes sense even though it's going to mean a personal loss of £2400 a year which upsets me most - it's that it has only taken 145 days since the new government was formed and already they have broken a promise which was so easily made in opposition and so quickly broken in government. How much longer until every other benefit is means tested - TV licences, winter fuel payments, basic state pensions?

Never agreed with Child Allowance - period.

Perhaps once justifiable as an after the War encouragement to swell the population, but maybe today a "No children allowance" would be more relevant.
If you can't afford kids, then don't have them.

Like a previous commentator in principle I agree with George Osbourne's approach, but I cannot support the fact that the loss of benefit is not calculated on total parental income rather than on any single salary. It does seem strange that families with around £80K income from joint earners would still receive child benefit. It does kind of contradict the central message. All the political parties shy away from 'means testing' but I believe its the only way to be seen to be fair.

For somebody allegedly so intelligent Mr Osborne finds it difficult to understand the difference between fair and unfair.

The proposals are sensible, although I would have liked to see households with the limit, rather than individuals. That would get over the problem of the double income households with two incomes each just below the higher rate tax. The problem is the bureaucracy needed to administer more complex systems. The Revenue used to do this before computers were used when husbands were taxed on their wives' income. Funny how computers make things more difficult to do!

I would tax all benefits but immediately raise the personal allowance to £10,000 or more and reintroduce child allowance to the parents so that their total personal allowances were greater. So a couple with two children would be allowed to earn and receive in benefits of all types £10,000 for each adult plus £1,500 for each child, making them only pay tax on earnings and benefits in excess of £23,000. The allowances would be fully transferable between husbands and wives, so that it would not matter who earned the money. It will never happen because it is too expensive and the present system is too cumbersome to adapt.

Here is the reality check form brown and Blairs utopia! Simply lets look at this in the cold light of day we .. yes us the taxpayer lent the banks £600bn pounds to keep the financial mechanism alive or realistically propped up a collapsed system that lent money else where, or more aptly bought Junk bond debts!

So now the financing of the bail out must come from the 'dear old skint taxpayer' as well as the system we have created to support the less fortunate.

How many successful retailers rely on paying the minimum wage so that the taxman can finance the 'poorly' paid.. the solutions several fold.... a city tax on all bonuses over £30K @ 50% and on share trading after all the paper money guys profit in a recession and in a boom!

A simple small levy on every share trade, bank transfer of money related to capital market transactions will rake in the money, plus shouldn't we get it back in some form; after all tax those who got us into the mess in the beginning. Second step... pay those workers on 16 hours a fair wage not a minimum one, whilst our poor hard hit retailers make billions a quarter in profits and share price gains! and finally limit working tax credit to those on less than 30 a year, in other words the real needy!

Dickensian economics are needed since the Government has issued its own junk Bonds Gilts!!! Oh finally two things where did the money go and when are we getting it back please? This goverment's kitty is oh so rash and he's after all our cash!

I earn £50000 and understand the need to make a contribution to the pain that the cuts will bring, losing 2% of my income, equivalent to the loss of £1000 child benefit, seems justifiable. But I want to see all of us in the 40% tax band lose 2%. If we all shared the burden, then the government could raise £8 Billion fairly, rather than only £1 Billion by picking on a narrow section of high earners.

It is obvious that George Osborne is protecting the interests of those earning over £400,000 (or with no young children). Raising £1B fom upper rate tax payers would require either a tax rise of 0.25%, or a £1000 flat payment from parents. (£1000 is 0.25% of £400,000)

The child benifit cut is unfair. If you earn over £100,000 mabe, but a £60,000 salary bring up four children this is a big loss. If the government wanted to upset middle England they have done it. WELL DONE!!! There are so many other possible savings.
(a) Why can a public servant retire after 30 years on a full pension If you start at 20 you can retire at 50.
(b) Why do we pay some over 16's £35 to stay on at school.
(c) Why are bankers getting bonuses deffered to a future date. Tax them at a higher rate.
(d)Why do teachers still work for half a day and have so many holidays. Give them 6 weeks a year and take them when you like. Then schools can do more to support those that work form 8am to 6pm for 48 weeks of the year.
(e)If over thirty and have no children why not pay a higher rate of tax to support those that are raising the future.

WELL that is me done!!

I am a higher rate tax payer and I am most certainly not rich. My wife doesn't work, she gave up work 5 years ago to bring up our 3 children. Despite the fact that our household income is less than many working couples, we pay the higher rate of tax, whereas they just pay the basic rate.

We have 1 (UK) holiday a year. We live in a 3-bed house - we need 4 as our 12 year old currently shares with his 5 year old brother, but we cannot afford to move.

Now we are going to loose £2,000 from our budget which all went into my wife's account (her only source of income) to pay for our children's clothing, food etc. I cannot see how we are going to make up this shortfall apart from me to stop paying into my pension. Meanwhile other households with far higher incomes than us will keep their child benefit because it is easier. This is apparently fair.

The Tories have said on numerous occasions they would not cut child benefit, this is apparently good politics. I know what to do with my vote the next chance I get to cast it.

This is partly a 'conditioning' issue, in that over time, this is a benefit that many parents may have come to expect 'as a right'.

As some have pointed out, in earlier times, people in this country were more resilient and tended to try and stand on their own two feet and if help was needed then close family would do their best to help out, with the Government being a last resort.

The Welfare State has evolved, mainly by politicians handing out benefits like sweeties, into what has suddenly become unaffordable.

Now it is being reined in, maybe somewhat clumsily, and the withdrawal symptoms are only just beginning to be felt.

This blogger has some sympathy for the general public, gulled by decades of 'benefits' into thinking, not unreasonably, that the politicians who dreamt this benefits system up, would always provide.

However, with such systems, fiscal reality rudely intrudes at some point, and so what politicians largesse, (with tax-payers money) has provided down the decades is now being taken away.

PS. I write in a semi-detached way, as one of the long-term self-employed is liable to - we self-employed tend to try and provide for ourselves and our families - and do not automatically expect anything from Government - except grief.

Some people may consider me lucky to be a higher rate tax payer.
But ealrier this year my Wife died of Cancer leaving me and my 5 year old girls to fend for ourselves.
Since then we have been rebuilding our lives. The Child Benfit has meant I can employ a Cleaner so that when I am at home with the Children I can spend constructivley with my children rather than leaving them in front of the TV whilst I do mundane chores.
But now I will loose Child Benefit becuase I earn more than £44k.
But the family down the road where the children still have a mother to support them, and where both parents earn £43K each can keep their Child Benift.
This policy is Not Progressive, nor Fair, nor Just, and it is definetley not Compassionate.

Surely the cap on benefits should be 40 hours at the minimum wage and the same rate should apply to sickness and maternity pay.

I agree that these cuts need to be made but they should be fair. They should be based on the household income and not about an individuals income. Take the example of a single parent with an income of £45000 who would not receive the benefit but a couple earning £30,000 each would still receive child allowance. How can this be fair?
I will not be affected as my son will be over 18 by the time the changes are implemented but I feel the need to speak up for all those hard working single parents.

Two words. Good decision.


Regards.

In this stone age we are surely able to get this double household income issue sorted ... and quite frankly if you use heavy duty words like moral then we can surely get people to get in fill in a form to have a more just system... and save more money...

Wouldn't it be great if the Big Society story would get some more substance by redistribution the saved money from better off families to poor areas so the kids there get better choices and healthy food in schools and kindergardens ... I am sure we'd find some known chefs to make great suggestions on how to use the money most effective....

Some better off parents might even feel good about the fact that they helped poorer kids to live up to there potential.....

We might end up with stats like "Postcode area x supports Postcode area y by redistribution of z million pounds into better schools" ... wouldn't that be fuel for a really local Big Society....

Since leaving school with very few qualifications I have worked hard to become a "high earner", I thought I epitomised what I see are the Conservative values of reward for hard work. I have a modest home, a basic car, holiday once a year and if possible put money aside to fund for my pension provisions. What I take from the state (health, roads, education, etc), I am satisfied that I have already overfunded. I now "look forward" to having my child benefit withdrawn, despite the promises of maintaining universal benefits made at the last party conference. I understand that the economy is in a mess, I understand that the defecit has to be made good. But surely, taking the money meant for children is one step too far? I am sure that like minded people will feel the same next time it comes to putting a cross on the ballot paper.

I understand the logic to reduce payments to those well able to do without them. But, this policy doesn't recognise the potential harm to women (usually the primary care giver). Child benefit provides state pension protection to (usually) women by recognising that their caring responsibilities pull them away from the workplace and the ability to either save for a private pension or earn yearly NI credits for the state pension. A household may earn £44K at one phase of life but might earn less in future decades. Meanwhile, the ability to make pension provision has been lost. If the primary earner dies or there is a divorce, the woman (and children) may be less well off and with an unprotected future. Here's an example. Woman stays home with children from age 25 to 35 and husband earns over £44K. No child benefit for the children and no pension protection for the woman. Age 35, the couple divorce. 30 years later, the woman does not receive her husband's pension, nor has the right to a full pension of her own. Result? Man is protected as he worked through the 10 year period of child raising. Poverty for the woman, who has been penalised for raising future taxpayers. The real question is not the cash in the here and now, it's the lack of old age pension in years to come.

Why should a pensioners tax on an income of £15k pa be given to people on £40k+pa?

@26

If it takes 2,500 pounds to do those things, why is it that many families earning much less than that manage to, I don't know, exist?

Please don't spout complete rubbish. People earning 45k a year spend more because they buy more useless unnecessary gumpf. If they cut out the rubbish they don't really need, they wouldn't even notice a couple of thousand pounds less over a year.

I saw on the 10 O'Clock News that 85% of families will be unaffected by this.

Is this true?

Are the wicked Tories reducing benefits for the highest earning 15% of familes and being criticised by Labour for doing so? Some political cross-dressing going on.

I think it is right that those that earn enough do not get hand outs, but to be fair the largest portion of the benefits pie is TAX CREDITS which is basically the tax payer subsidising low paying companies.
Why should the tax payer have to pay out to support the profits of private companies.

Check those figures yourself the largest whack coming out of the welfare system is supporting people on LOW WAGES IN WORK.
WHY ARENT THE EMPLOYERS PAYING A LIVING WAGE!!!!

You'll notice the opposition hasn't on the whole jumped to criticise this policy. Personally, being of centre-left tendencies I don't object to it but I'm not naive enough not to recognise it's the socially just cut that is being aired before the worst that is still to come. In common with many others though I cannot see the merit in this applying to single parents who earn 44k. Why not say it is for a combined parental income of, for example, £65k? Is there anyone who can explain to me the merit of the 44k rule? Is it a weird way of promoting the family and fixing Cameron's 'broken society'?!

I dont see what the issue is. Child benefit? You earn £45 THOUSAND a year, after tax you'll take home £35k ish, what are you complaining about? What about those who earn £20000 or even less, they have families homes, lives. They pay tax, they work 40-50 hours. How can you be given money if your combined household income is in excess of £70000 after tax.

That's a killer stat, Craig (30). Farewell another Reactionary Myth. RM 127 "ICB claimants ballooned under Labour" duly exploded.

Not sure I agree with you on UBs, though - I go more:

- benefits to be needs driven (inc. the pension).
- single payment (based on need).
- increased minimum wage and personal allowance.
- more progressively stacked tax system.
- core public services free at PoD (funded out of general tax).

People need to understand the concept of a government's budget. Making a decision on tax or welfare isn't simply a question of what is ideologically fair or unfair. What George Osborne has said is that this decision is fairer than other decisions. If this cut wasn't decided upon, then the money would come from somewhere else. Those bemoaning it should remember that, rather than focusing on the decision in isolation.

i am wondering if anyone who is a Tory could explain to me how this is "tough but fair" when i as a widow just tipping into this can not have child benefit but a couple who earn 86 k can.
As I am widowed and have lost everything my lovely husband brought to our family i must pay for all childcare at 1000 a month to work to pay my 40% tax on my 45 income leaving me with less than 17k a year for all other costs after tax,Ni and childcare.I suppose at least a family with a woman at home on this escape the childcare and expensive travel to work costs ' The tiny pension my husband left gor the children is also taxed at 40% -how opportunist of the tax system is that?He was a 20% tax payer before he died aged 40.Nick as a political commentator can you help me get my head around this please ?.I was very tearful this morning about this as it feels quite personal at a time i need to state to show some care.

My husband just qualifies for the child benefit cut and I work p-t earning £9k and look after our 3 children. The £200 a month we'll lose from this is a bank-breaker for us. Our monthly outgoings need that top-up and we are not extravagant. We were led to believe that cb would not be changed and like many we have made career and finance decisions with this payment in mind.
Could it not be tapered so that people on just over the bracket had it reduced by 20% and that went up in increments to a £100k ceiling? The total cut-off will hit us hard. I know some higher tax earners have said they just stick it in their children's bank accounts or put it in a treat fund, but that is not the case with us and I suspect many other people in our position.

Hurrah!

At Last the beginning of the end of Universal Benefits!
I've always thought that UB were fundamentally immoral. You Tax people on £7/8K a year to pay "Benefits" to people on £44K+! In what world is that moral?
Pay higher Benefits to those who genuinely need them, but take it from the right hand and pay it with the left hand? Less the massive beaurocratic costs. NO! NO! NO!

Design a Welfare System that looks after those who need it, not Higher Rate Tax Payers!

Osborn has made the classic mistake he's not costed the means testing.
The big advantage of the universal benefit of child allowance was that it was cheap to administer. Labour's objective in making benefits fair by means testing was laudable but very costly hence the number of administrators and inefficient costly computer programs in the system.
3/4 of the saving will be lost in administration.
Stay at home mums do a valuable job; shame it's not recognised.

This policy breaks the deal of universal benefits from the party that has traditionally prided itself on being supportive of the family. It's destined to alienate affluent middle class voters for the sake of a billion a year which is a drop in the ocean. We thought child benefits were sacrosanct, like NHS funding. If things are that desperate why not re-visit NHS funding rather than penalise the children of hard working families.

@cookman No. 42

You mistake is that you are assuming intelligence despite ample evidence to the contrary.

So if I earn £50k, I should cut back my hours to a 4-day working week so I earn less than the threshold and start having children at the same time......
And by working fewer hours (great) I will spend more time with my kids (great) and less costly due to child-minder (great).....

I am liking the idea now !!

"In part because this all makes it politically easier for them to tackle a welfare state the Chancellor calls financially unaffordable and morally indispensible."

Is that malapropism yours or Osborne's? Just checked, and as I suspected it's yours. If it was morally indispensable [note spelling as well] then it's not clear why it would need to be tackled. Dear oh dear.

I think this is a fair move, although it probably should have been done via total household income.
Also people are forgetting that personal tax allowances are, assumedly by the time this comes into force going to raise to £10,000 per year as per the coalition agreement. Doesn't that make this boundary almost £50,000? Not exactly on the breadline.

LOGIC--- if you are higher threshold tax payer then is the nominal sum of child benefit really going to make a difference? "That's not the point" they shout, "we deserve to have it".
Now, this is where our benefit system fails, people think that they are entitled to a slice of the pie. I speak day in, day out with people who assume their mere existence ensures that someone, somewhere will pay for them to live. Even if you are only getting child benefit, if you can afford to pay for your child yourself but still expect the state to contribute then you are morally on a par with the people you sneer at on Jeremy Kyle!

I would rather our benefit pot went to people who are GENUINELY unable to support themselves or their families.

This comment was removed because the moderators found it broke the house rules. Explain.

Labout and the unions have been wrong footed.

After moaning about the poorest beign hit hardest, its amusing to hear Brendan Barber bemoaning the fact that the highest earners are going to be hit.

Get the chip off your shoulder Brendan and grow up.

I'm not a Coalition supporter, but I think Labour are wrong on this. If you are going to cut benefits - and you can scarcely keep them at their current levels in view of the size of Government debt - cutting them for the better-off is surely better than hitting those who are least well-off. Labour needs to avoid political opportunism (why D Milliband would have been a better leader than slippery Ed) in an area where people know they would have had to make difficult choices had they still been in Government.
As others have pointed out, poorer people are likely to be hit by other changes in the benefit system, so one could see this as a bit of window-dressing of "fairness" - albeit poorly designed. I suspect osborne & Cameron are banking that the people who've been affected will remain loyal in 2015 (a) because they will have got used to the change and (b) they never voted Labour anyway.

Howdoyou,

"Yes fantastic idea, let's make it £100k, we wouldn't want people going without now would we?"
At no point did I suggest that - but I concede that other have made better suggestions.
"So please enlighten me as to how all the people in this country earning the national average of 25k manage to get through each month without starving to death? Oh I know, they'll still get £1k/year in child benefit, silly me."
Starving to death? Not what I implied about higher earners at all. People on this income level are also entitled to tax credits. How do they manage? Do you know? I certainly don't think it's easy.
"You need to get your head out of your self imposed cloud."
Without resorting to insults my post addressed your (also insulting) post in which you responded to "Doh." Simply that a single income of £45K is really not a heck of a lot when you have a house, family and associated expenditure.
Any thoughts on the FAIRNESS of the proposal comparing single vs double income households? Or perhaps another dose of sarcasm and insults?

There is only one sensible response from Labour:

1. To broadly support the idea of cutting welfare payments to the better off in society. To await details to attack some of the inconsistencies/unfairness outlined above. If Labour will not support these changes to benefit payments it is hard to imagine any they would support.

2. To appease those "middle class" voters (earning just enough to lose the benefit) promise wide ranging measures (including legislative reform) to crack down on benefit cheats and tax cheats. They are equally odious but I suspect the real money is in the tax crackdown.

I personally dont understand why this government insists on attacking easy targets, I agree no one should live on benefits as their main income, but I also think its unfair to attack people who earn more money, or by reducing the amount of university funding. If this keeps up we will end up being an uneducated country where people need benefits to survive. Now isn't that a bit of a catch 22!!

keep the universal child benefit just raise the tax from 40% to 45% for
higher earners simples !!

Cutting child benefit is a gift for Labour because of the crude definition of the rich. All you have to do is be a higher rate tax payer. Some people who are struggling to pay their mortgages in London and are on relatively high salaries are left with little at the end of the month and depend on the child benefit to pay for the extras for the kids.

However it's child benefit. To account for the extra cost of having children. The rich have paid for this benefit through their taxes so they should have it the same as everyone else. Labour supporters like universal benefits because, unlike means tested benefits, they are cheaper to administer, no one at the margins is left out, there is no stigma in receiving the benefit and the take-up is always 100% of the people who need it. Once you move from a universal benefit then you have to decide the criteria of the cut-off point and often that leads to anomolies of distribution. In this particular case two working parents who earn just below the higher tax threshold will qualify whereas a family with one working parent just over the higher tax threshold will not even though they have less money.

The left of British politics recognise that the rich and middle income people pay tax too. For society to work they need to receive something back and child benefit is a good way of helping the nations children.

One of the objections to New Labour by the left was that all the emphasis was on targeting benefits with ever more complex forms that ended up in many people simply not applying at all. Many benefits had low take-up rates. Lord Hesteltine should get his free 'over 75' TV licence not because he cant afford to pay but because it stops means testing being a barrier to hundreds of thousands of pensioners who might fail to claim if it were means tested. Of course Lord Heseltine should get a free TV licence because he has paid his taxes too.

Yes the left of politics often portrays the rich as the enemy but universal benefits are about the equal society where those who contribute do receive something back.

Dumb question, but why do we pay benefits to people that have children irrespective of what they earn?

I hate to rain on anyones parade but we are in a financial mess at the moment, we have two options: one do nothing (Labour did this for 13 years)or two make cut backs and avoid ending up like Greece.

Is this measure perfect? No of course not and there will be people who are caught out - I'm confident if it was £50,000 there would still have be arguments. However the other option would have been means-testing which would have been lengthly, expensive, time-consuming and probably would have failed as people would just have looked for loop holes.

My Parent's never earn't anywhere near this amount of money and they took pride in the fact that never claimed child benefit (and I never wanted for anything), some people these days seem to make a career out of it!

Personally I have never understood why we should be rewarded people for having children and before anyone starts complaining(too late I know!)how badly done to they are, how fair is it that childless single or married people have to pay tax and dont get anything for supporting other people's children...think on guys

Just like people here are saying that it's unfair if one earns £45k, but two earn £43k - doesn't this just point back to the need to consider a married couple as a couple for tax purposes. A child doesn't belong to one or the other parent, it belongs to both - the married couple.

Yes, I agree that this benefit (& other universal benefits) need to be taken away from higher earners somehow.

What Mr Osborne proposes, though, would penalise those earning slightly over the threshold. Why is no taper being proposed? I thought that IDS's Brave New World included keeping a high %age of each extra £ earned; not taking away £3000 (for a child family) for *that* one extra £ earned above the threshold.

For me the fairest way would be to make all universal benefits taxable at the marginal rate for everybody. Old Age Pension is currently taxable, so why not CB, too? For dual income households, half CB would be reckoned in each parent's income. If one parent doesn't work, then that half of the CB wouldn't be taxed.

My solution is progressive - the more you earn, the less CB you get to keep.

Please revise your plan, Mr Osborne. Simples.

Any political party wishing to make savings should consider removing the gift aid benefit to higher rate tax payers as a priority; furthermore, removing the nenefit if one earner earns in excess of £44,000 pa is too simplistic given that two earning £43,999 each would not suffer the penalty - it's a typical example of a cheap ill-conceived ploy which is unfair at the levels chosen.

Lame speech from George Osborne. He looked uncomfortable. One good line though:
"Britain has no divine right to be one of the richest countries in the world."
True. It's all about skills. And if we don't have the skills, it's about keeping a healthy level of immigration.

I have no argument with a cut-off for child benefit - it makes good sense. But base it on JOINT INCOME! 'Simplicity' is nowhere near a good enough reason to roll out a reform that is knowingly unfair to families with just one stay-at-home parent. It makes the Government seem either, lazy, incompetent or.... nope, it's got to be one of those two.

Where have all these people earning £44,000 suddenly came from??? Some of these comments have left me lost for words. My dad brought up a family on £28k and he somehow managed to survive without starving. We had 2 cars, Sky TV and broadband. If you can't bring up a family on £44,000 then you're doing it wrong. Some people get by on MUCH less. You're not needy, just greedy. Give the £1bn saving to higher child benefit for the poorer.

the reason for using the 40% tax threshold as the trigger is that it will make it as cheap as possible to administer. if you have to means test households then it increases the admin so savings are less. You can choose not to claim child benefit so perhaps all these couples on an income of 86K will choose to support the poorer sections of society by not claiming it - or will it just be everyone for themselves?

I can't quite believe that such a badly thought out change in tax ben system (it causes efficiency problems, is inequitable, and nobody has a clue what the dynamic/longer term consequences are) was not strangled by the Treasury or HM C&E. I am , however, now firmly of the view that all ConDem social policy is worked out, without regard to serious advice, in ten mins on back of an envelope (this change clearly was, as everyone who mattered (Osborne, Cameron,Hammond) was clear in the election that child benefit was safe). Major changes in the NHS ,largely ruled out in the coalition agreement, seem to be similarly well thought out.
More worrying still is the Osborne rationalisation that we need these cuts in benefits to help secure a private sector led recovery ( investment linked to greater exports) and this is expected to occur when world demand (or at least demand in our main markets) looks to be heading downwards! So its more cuts next year on the Irish/Greek model-funny that we weren't in anything like the same predicament as Greece and Ireland before the coalition took charge of economic policy.

If they really want to bring in cash and help fund welfare reform why not abolish the higher earnings limit on National Insurance contributions? That way those who can afford it will pay more and will also bring more income into the national insurance fund.

14. At 9:51pm on 04 Oct 2010, phippsje wrote:
Under this reform if my employer offers me anything more than a £150 pay rise then me and my family would be about £2000 a year worse off!

Is this the clear and understandable system that we should look forward to? What kind of system leaves me worried that my employer will offer me a pay rise
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It may sound blunt but I think it depends on whether you want to continue to have an income subsidised by the State, ie other tax payers, or be paid in accordance with your employer's assessment of your value to their organisation and their capacity to fairly reward you contribution.

@77 blueskythinking

Here's some numbers for you to muse over.

Amount saved annually by the change of rules to child benefit...£1,000,000,000

Amount paid in interest PER DAY due to the national debt...
£120,000,000

You think todays events are savage? The amount saved pays for just over eight days worth of interest on the national debt, only a further 357 days worth of interest payments to be found.

Fairness doesn't even enter into it, we simply can't afford to pay out child benefit (and soon to be announced other benefits) at the rate we are, something has to give.

Now perhaps I'm old fashioned, but it strikes me that the 44 BILLION pounds we're paying in interest every year makes the people on here complaining that they've lost £1000/£2000 a year a little irrelevant.

We will be directly affected by this and totally agree with the principle. Have long felt that we do not need this benefit (although the extra money is always useful!) and that I would rather it went to someone who really needed it.
However, I am appalled that it is not based on total household income. It makes a farce of the whole thing that dual income households who earn more than we do will still get it.... It's no longer a meaningful redistribution of the available funds which is a real shame.

I never understood why we got child benefit - it went straight into an account for the child. Now I don't understand why at 60 I get free prescriptions, free bus travel and winter fuel allowance, when I'm supposed to be working till at least 65!
What is wrong with paying for what you use?

I would hazard a guess tax credits for those on £30K+ are next on the list, then the much publicised £1200+ a month housing benefit will be cut. It's coming to light what 13 years of NewLabour were all about, giving lots of benefits to those who could have done with less and ignoring the absolute poor, not very socialist of them.

Re:49 somerset dude- however unfortunate your personal circumstances are it does not mean you should be exempt from doing chores!all single parents have this difficulty.

If you are earning £45,000 then you can shut up. Really. Shut up. Most people in this country earn under the average wage of £25,000 and a lot of them manage to run a home, pay a mortgage or rent, feed and clothe their kids.

If you are earning that much then you are effectively rich. What YOU choose to spend your money on is up to you. Want to have 3 kids? Then you made that choice, want a car rather than using public transport, maybe you need a car for your job? That was also your choice.

Things HAVE to change. Of course the dual income copout is stupid but generally you have to realise you are getting a lot more than most people. Time to get a kick up the bum to see what we are having to deal with.

1. Money could be saved if Child Benefit was only paid for the first two children in every family regardless of income.

2. The Government could save over £33m per year if they didn't pay Child Benefit to children abroad.

3. As the Government (taxpayer) has had to bail out most of the banks there should not be any bonuses being paid to bankers. Banks that have received help from the Government should pay profits back to the Government to help reduce the deficit.