Wait for the twofer (2)

Once again the devil will be in the detail/implementation. This announcement was designed with the front pages of the Mail, Telegraph and Sun. A bit of red meat to keep the rump of the old fashioned nasty party happy.

At this stage there is too little detail for anyone to form a sensible view on whether it can be implemented or its impacts on fairness.

I think you spotted it NIck.

This is not actually reform, but purely a political move, to make it appear to Sun readers that, look we are taking money away from the better off.

'First you hit "the rich"... then you hit "the scroungers".'
This implies the 'rich' aren't 'scroungers'. That's not necessarily true.

I am so glad that Osborne is being fair and hitting the rich as hard as the poor. We are all in this together...blah blah...Labour left us in a financial mess. Bring on Stephanie Deficit who will point out the need for cuts. Nick is doing a fine job supporting Osborne and Cameron and on the last day of the conference will point out how well Cameron presented himself, persuaded his fellow tories that the pain is worthwhile, and how well he presented us all with a vision of the light at the end of the tunnel. Well done the BBC's main political and economic journalists - broadcastings answer to the Murdoch press.

"The chancellor says that no family will, in future, receive more in out-of-work benefits than the average household income of those who are in work."

So people on a benefits career can still rip the taxpayer off for more than many family earn through hard work. Doesn't go far enough does it.

EVERYONE who works should be better off than those who don't work through choice.

Oh there is an announcement ' WE WILL INTRODUCE A LIMIT ...'

Then this turns out to be a mere symbol.

Is the child benefit cut a symbol too?

How are we supposed to know what will actually be implemented and what was said to get a round of applause.

(BTW Justine Greening totally failing to justify this on BBC News now)

"no family will, in future, receive more in out-of-work benefits than the average household income of those who are in work."

Will this include the families of private landlords, in whose hands Housing Benefit ultimately arrives? And will pigs fly?
Or would our already shaky property market collapse if the returns on Buy-to-Let were limited by controlled rents?

Isn't the moral to write a blog once the important details are clear rather than updates every hour?

Nick Robinson.

"The chancellor says that no family will, in future, receive more in out-of-work benefits than the average household income of those who are in work."

sure, the country is simply overrun by "scroungers" who get in excess of £24,800 in benefits. LOL

Well I for one welcome this new appreciation for fairness across the board, even if it is just a 'signal'. I'm sure those cynics on either side of the house will find issues with it but I want to see a coalition to be making cuts across the board and raising taxes across the income spectrum. We live in a new society and we have to remake it how we want to. I didn't agree with Labour trying to hit the rich or the banker and I don't agree with bashing benefit scroungers.
It will be nice to finally have a government that just does things quietly and efficiently and doesn't spend all of it's time trying to socially engineer society.

My first ever post. Why now? Because I can't sit back and stomach this nonsense any longer! My points on the child benefit cuts. Firstly, response to the 'we must means test by reference to the individual's income, not the household's income' Lets start with an example (and by the way I am no expert so do correct me if I am wrong. A family's income is 87k a year but with both parents earning less than 44k under this proposal they can still get child benefit whereas a family with one earner (with only one 7k tax free allowance, not 2 I might add) earning 44k loses out. If both families have two kids the lower earning family is over sixteen hundred pounds worse off on the benefit, 7k worse off because they only have one earner and 43k worse off in income. How is this a fair way to distribute a benefit. It may save them a billion pounds but it is a hugely flawed calculation which makes you worry about the other measures they are looking to introduce. And George before you continue to labour (I apologise Mr Milliband for choosing such a verb to describe a capitalist who has been let loose on a treasured labour creation such as the welfare state!) the point that it would be an admin nightmare here are my counter arguments. 1) do not insult us George. Every radical idea thus far has been wrapped up in expensive admin red tape. Revamping the NHS is an admin nightmare George, basing a means test on two people instead of one requires a calculator and finally 2) clawing it back through the tax system after all the recent trouble with PAYE is just madness. You are blowing holes in the welfare at a time when this country needs well structured welfare protection.

I watched the speech -he is a really slow speaker and you want to make him go faster and put a bit of expression in to it.
I kept hearing 'The British People' and fairness. Almost as if what he was doing has nothing to do with the tory party.
The child benefit change is fair, he said, just the exact opposite of what we said at the election (I may have heard that last bit in my head!) -although if you have a family with one parent working and just paying higher rate tax they will lose the benefit at £43K of income whilst a family with both parents working on average incomes of £25K each will still receive benefit on a family income of £50K.
If you take the extremes (as politicians always do) then a family earning £43K could lose the benefit whilst a family earning £84K will still receive it because they are basic rate tax payers.
I don't call that fair. Lets hope he doesn't apply the same fairness test to everything.
I liked his talk about cracking down on people who don't pay tax but nothing on avoidance announced by Danny Alexander in Liverpool -why is that I wonder.......
The benefit cap at £500 per week I wonder what % of the benefit claimants receive that amount -the fact he didn't make a big splash of 'this will affect 25% of all claims' suggests to me its not many -but it will keep 'the Bun' and the 'Daily Snail' readers happy I guess.

We have had three blogs on the same topic this morning. This makes coherent discussion and comment difficult - or even more difficult, in the case of some bloggers.

It would have been far better just to have had ONE blog from NR, a little bit later, and perhaps with updates.

It appears to me that this mornings child benefit cuts and cap on benefits is the outcome of the private/public spat between George Osborne and IDS which has resulted in the muddle.

It seems clear that IDS has come out best from the battle since George has to announce a rather poorly thought out child benefit cut (Child benefit being an Inland Revenue/Treasury provided benefit and therefore not within IDSs DWP) and IDS well has yet to work out what and how much a benefit cap would actually be to make the figures balance.

Bet this is one occasion where George is regretting his rush to form the OBR - since without it he would have been free not to work about where the extra IDS wanted was to come from. Instead he had to slay a sacred cow and fudge the rest.

sweetAnybody @ 5

Nice idea the problem is how do you implement it.

Trying to prove someone does not want to work can be just as difficult as trying to prove a particular measure was designed purely to evade tax.

Moreover if you force people off benefits what do they do if there is no job available. Many will turn to the black economy. For some people prostitution, theft or drug dealing will appear as better options than minimum wage at a fast food outlet.

First you hit "the rich"... then you hit "the scroungers".
Are you kidding me? Where exactly have the rich been hit, in giving up a little child tax benefit?
Cutting benefits from top wage earners is not hitting the really, REALLY RICH, though it may distract from the fact that you are not hitting the really, REALLY RICH.
The richest of the rich are found in investment banking where they have bet & gambled their way to mega-bonuses (+ salary of course).
So where in George's thinking does this group of mega-rich fit into an Osborne scheme? Have I missed it? Surely it's there! Surely the super-rich, who caused all of this financial chaos, are somewhere in George's plan, right?
I agree that persons above a certain income level should not draw one cent from the publiuc purse, be it in child benefits or senior benefits.
What I hear from the chancellor is a lot of talking, no means test, no audit-perfect, computerized methodology for carrying out his scheme. So, how long will it take him to lay down plans, till 2013?
I'm beginning to question exactly where The Coalition Government is going and when it will get there. Is there one action-packed "DOER" in The Coalition, or are they all nice-talking politicos.
If George Osborne wants to help the PEOPLE, he should:
1. bring in a means test. Above a certain level of income you cannot draw any benefits at all from the public purse.
2. bring in a Tobin tax on all foreign exchange transactions so that the huge investment banks with their HUGE salaries and bonuses get to pay their fair share in bringing down the deficit.
"Fair" is what we're looking for, right George?

First you hit "the rich"... then you hit "the scroungers". That is how George Osborne believes you prove that spending cuts are "tough but fair".

Life is inherently unfair, I don't see this changing any time soon and therefore, I am completely fed up to hearing how fair our government is.

Cuts are necessary, they will hurt so let's just move on.

And whether we like it or not, the greatest burden will always fall on those least able to afford it but that's just how life is. I consider myself to be in a position where I could easily whine, complain and moan about the cuts and how right now I'm only just able to get by on what I earn as well as receiving financial help from the family (I don't use any benefits) but that's the easy option. After all, why accept something when I can live in denial and pretend that it doesn't matter but I'm not that selfish.

I would love to be rich and have everything I could ever need but I don't and I accept it. It would be nice to hear such an acknowledgement from our government and not just the pointless rhetoric of how they understand common people and the pain they will feel from such cuts. What is more annoying is the claim that we are all in this together....

As citizens of this country we are but as individuals we all suffer differently and the unfairness results from these differences, from this unfairness we will never be able to see things from the same perspective as everyone else and therefore, we will never agree that we are all in this together as the burden of resolving this crisis is unfairly balanced on the shoulders of the citizens carrying the weight.

So the first two targets are 'hard working middle class families' and a spurious group largely created by the tabloids.

Way to go Georgie!

I do wonder about the Tory/LibDem version of fairness and we’re all in this together.

Fairness is saying we're up to our eyes in this much debt and we all have to pay in proportion to what assets we have. So the millionaires pay more than the middle income earners who pay more than low income families. However, the reality is anyone with the money to pay for offshore accounts and expensive legal agreements to avoid tax, does so, leaving everyone else shouldering a far higher burden.

What makes it worse is that this was all caused by people on incomes far above what most people could dream of.

And one final point that no one seems to talk about, where is most of this money that makes up the debt? The debates seem to indicate that it’s gone never to be seen again, when the reality is most of it is shares in banks. Most of these banks share prices are at a level equivalent to where they were when the government bought a stake. Why not sell these and relieve a substantial portion of the debt.

Maybe it's because those who are paying proportionately less for the mess they caused will then clean up. And probably in just time for the next election so the current government can say 'Look how well we did'. Or am I just being cynical here?

So, in this new topsy-turvy world, the benefit cap is merely symbolic, whilst our middle-class, hard-working, coalition-supporting family faces a £2,500 loss of income per year which Osborne and Cameron promised they would not cut. That's breach of electoral contract Mr Cameron and will cost you dear at the ballot box.

Meanwhile the top rate of tax of CGT, for the benefit of the trustafarians and financiers, remains at 28% and tax avoidance/evasion costs an order of magnitude more. And Vicky Pollard and the Playstation parents can continue to claim full whack for each and every child they produce. Only those who work hard are penalised.

The only hope, and I think it is a genuine hope, is that this move, due to be implemented shortly before the next general election, is so anti-middle class, anti-traditional families, unfair to single vs. dual wage earners that it will not be implemented, as to do so will lose the votes of millions of middle-englanders.

This is electoral suicide, delayed for three years. Let's wait and see whether the coalition really wants to be wiped out.

'5. At 1:06pm on 04 Oct 2010, sweetAnybody wrote:
"The chancellor says that no family will, in future, receive more in out-of-work benefits than the average household income of those who are in work."

So people on a benefits career can still rip the taxpayer off for more than many family earn through hard work. Doesn't go far enough does it.

EVERYONE who works should be better off than those who don't work through choice.'

Yes, yes this is all very well. But what the Con-Dem alliance have failed to explain or expand upon in their repeated rhetoric is where the jobs are to be found even if all the 'scroungers' were actively seeking work. Economic recovery depends on Job creation not cuts, cuts, & more cuts simply for ideological reasons.

If they had only done this to start with, they would never have had to touch Child benefit.

Given just about everyone has picked up on the fact a family can have an joint income of over £80K and will keep the benefit yet a family with a single income of over £44K will lose it, do we really have a chancellor who is stupid enough to believe this will not make people question if he should be let near the till in a sweet shop never mind the country's purse strings?

Child benefit is a payment the country can't afford full stop . If you have kids you should be able to look after them . People who are on benefit payments should not get more than people who go to work . I think the goverment has been over generous with the cap they set

5. At 1:06pm on 04 Oct 2010, sweetAnybody wrote:
'EVERYONE who works should be better off than those who don't work through choice.'

Including those of independent means who became rich through no effort of thier own?

Just to add that I think this attack on middle-class taxpayers is so electorally stupid that it may cost Osborne his latest public sector job, once his Tory backbench colleagues realise that this is electoral suicide. A new Tory Poll Tax? I notice that Labour is already attacking on this issue. For our household, and hundreds of thousands of others, £2,500 each and every year is an awful lot of money to lose.

So... not only will my family benefit by £2400 child benefit if my wife and I divorce, but if my wife takes one of the children with her, we can claim double the benefits!

I knew that the Conservatives wanted to "recognise marriage" but for some reason I presumed it would be a reward, not a punishment.

The poverty trap must be eradicated. It is the large families living on benefits in central London who illustrate the problem the best. Having a large family is a choice. Living in central London is a choice. I spent a jaw-dropping few minutes on a website called entitledto.com idly filling in a few values. More children = more benefits = deeper into the poverty trap. What job gives you an automatic pay rise when you have a baby?

We currently have the peverse situation whereby people in work can't afford to have children, yet for those on benefits it's the only way they can increase the money coming in.

Make work pay, either by increasing minimum wage, cutting benefits, or a bit of both.

AlphaPhantom @17
Well to summarise your rather lengthy post. The Coalition are talking a load of tripe about compassion and shouldn't be bothered about whether its cuts are fair or not.
Doesn't leave them anywhere to go really.

BluesBerry #16.

""Fair" is what we're looking for, right George?"

no, you misunderstand, the ConDem(n)s plan it like this:

first we bend over, then they kick us in the teeth. simples.

So if we factor in your 12:46 update Nick this looks something of a muddle. This is added to the first policy of withdrawing child benefit for higher rate taxpayers which may look politically good but has the problem that single parent families or even families with one working parent are discouraged. If this is a scrap between IDS and George Osbourne it has become a muddle.

As to the economics well here is this on the subject from notayesmanseconomics blog.

"I have written before about the dangers of high marginal tax rates and their effects on economic efficiency. Well at an income level of £44,001 we in effect have an incredible marginal tax rate of well over 100% as the whole benefit is withdrawn. The exact rate depends on how may children someone has for example for someone with four children it looks as though an extra £1 in earned income could cost them around £3100 in lost benefits for an extraordinarily high marginal income tax rate."

Meanwhile, Vodafone gets away with a £6 billion tax dodge because government orders that HMRC accept a token 'settlement'.

Who exactly are the scroungers here?

https://www.private-eye.co.uk/sections.php?section_link=in_the_back&issue=1270

As I understand it, a single wage earner on (say) £44,001 a year with two children will lose £1,700 in child benefit through extra taxation whilst a couple earning (say) £39,999 each will be unaffected?

When listening to Mr Osborne on Radio 4 this morning (4th october), it was galling to hear him say that this 'fairest way'. It very obviously isn’t.

Can't we use the system already in place where people declare their earnings? Surely it's simply a matter of writing to those who receive Child Benefit? Is there no way to phase the change; i.e. the more income you have as a familiy, the less Child Benefit you get (or the more tax you pay) - not just a simplistic all or nothing cut-off.

Mr Osborne he needs to find the fairest way to spread the burden - not the simplest.

Alphaphantom

Totally agree. Where does this 'fairness' nonsense come form.

Was it fair of Tony Blair to announce on the GMTV sofa that he intended to raise the %age of GDP spent on the NHS to European averages? Was anyone consulted? Did it appear in any manifesto? Was it planned by the health minister at the time?

Was it fair of the party formerly known as newlabour to announce 44bn of spending cuts and not give any idea whare they were coming from?

Was it fair of newlabour to run up the biggest peacetime budegt deficit?

None of this was fair by any conventional satandards yet we are lumbered with it now have to deal with it all.

About the only fair thing I can see at the moment is that newlabour have been swept out of office for five years.

They were rubbish.

No mention of cracking down on tax avoidance!

This morning my wife reacted to the news with "Quite right, it's b****y ridiculous paying all that money out, we earn enough, we don't need it".

I have to say I agree with her. Apparently this is a minority view.

I'm astonished that £26K is considered an acceptable upper limit for benefits - it should be much less. How about the average nurses wage?

No wonder we're in such a mess if that's the sort of money you can get from the state!

#21 GoBetween wrote:
"Economic recovery depends on Job creation not cuts, cuts, & more cuts simply for ideological reasons."

The cuts are being driven by the perceived need to reduce the deficit, not by any desire to reduce the size of the State.

Leaving aside whether ideology is a good or bad thing, I can find little evidence that the latter (reducing the size of the State) is driving the coalition. The State will be left about the same size as it was in 2005. I wish the government did have at least some ideological drive to cut the State, but I fear it doesn't. Cameron is a pragmatist.

Labour refuse to say what they would cut, despite having proposed it in the pre-election budget (you may remember they refused to carry out a comprehensive spending review). Reducing the deficit reduces borrowing costs, both because the total debt is less and because the interest rate is less.

The structural deficit is over 100 billion per year, and the actual deficit more. The coalition government are increasing the national debt substantially, not cutting it.

Labour's pre-election budget proposed cutting spending by over 40 billion pounds. It seems that the current leadership disagrees with Darling's approach and wishes to borrow even more. This will increase the proportion of national income spent servicing the debt and reduce the amount that can be spent on anything more productive.

This, as the IMF recognised, will reduce future growth not increase it (though it may provide a short-term debt-fuelled sugar rush).

"9. At 1:18pm on 04 Oct 2010, jr4412 wrote:
Nick Robinson.

"The chancellor says that no family will, in future, receive more in out-of-work benefits than the average household income of those who are in work."

sure, the country is simply overrun by "scroungers" who get in excess of £24,800 in benefits. LOL"

Well, if there are any scroungers out there, they will be laughing at how niave you are. £24k a year amounts to just £476 a week. there are plenty of places in the UK where having your rent and council tax paid for you will cost more than that.

Ah a return to Red Nick.

Why would they have to be evicted? They are supposed to plan their lives like everyone else does - make arrangements with the people they owe money and if necessary you put your house on the market and move down a notch.

At some point people have to take responsibility for their own actions. If you have a mortgage you cannot afford and a number of kids you cannot support while you find work - even while the State provides you with £26k a year, then perhaps you should have thought of that at the planning stage rather than expecting to be able to do whatever you like and dump all of life's downside on other people.

And let's be clear here - dumping it on other people is exactly what is happening. That money doesn't get conjured from thin air, it is taxes deducted from the earnings of other people who worked for it.

So the bottom line is this: if £26k a year is not enough support for you while you find work, then make another plan where it is enough.

Unless you're an idiot, you don't go around hitting the general public.

First you try to be efficient and then you try to be even more efficient. The people to be hit are the grossly overpaid, who'll not even feel it, politicians and public servants, not the general public.

The usual HYS crowd in again. Stuff this, I'm off for a pint.

Even - or perhaps especially - if it's just a symbol it's poorly thought through. Why should it be possible for anyone to earn LESS from working than another can from being on benfits, if their family circumstances are identical? The comparison should not be with median earnings but with lowest earnings.

AndyC555 #39.

"£24k a year amounts to just £476 a week. there are plenty of places in the UK where having your rent and council tax paid for you will cost more than that."

a direct result, I'm sure you'll agree, of the shortage of affordable housing; people have to live somewhere and government policies of the last thirty or so years have favoured the private owner (and landlord) over the social housing so many of the 'working poor' require.

https://www.nationalschool.gov.uk/policyhub/news_item/working_poor08.asp

https://www.politics.co.uk/news/welfare-and-pensions/rise-in-working-poor--$21383775.htm

or, perhaps, you would prefer people on the minimum wage to sleep in tents in the park?

OR - First he hit families with young children....
Second he hit families with young children.
When are his grey haired activists and voters going to get a share of the pain?
Stephanie Flanders pointed out a few weeks ago that most of the savings were targetted at the young, this is just continuing the trend.
Also, as a familiy with income of £50k from one earner will lose child benefit, but a family with income of £80 evenly from two earners won't, the tories are also the enemies of stay at home Mums......

Ruddy 'eck!

I just gave all me money to the missus and packed 'er off with the kids so she could still claim Child Benefit. That left me no money and Georgie Boy goes and gives me back nearly half of what I gave the wife!

I now get £26,000 in benefits, the wife gets the £43,000 job plus she keeps the Child allowance and all we 'ad to do was split up and live under separate roofs.

Whowoudabelievedit! I am definitely going to vote them Tories next time - they look after us so much better than them "Red Ed" Labour lot.

Still, it is pain not to live in the same 'ouse as me family but then the 'ousing benefit do help with the rent and I can always have me visitation rights.

Well all a bit cack-handed is it not ?

Can't afford to means test CB so we'll just make it "tax related"...ie. massive losers at the margins. So a poll tax in reverse for the middle classes.

Opps...

The benefit announcement is hard to argue against but in the end effects a relatively small % of claimants...a sop to the tory papers...


Robin

Anything to say about Osborne's announcements,or just going to prattle on again about Labour...? no, thought not.

The "squeezed middle" indeed...

Honestly, several things occur to me. 1) That my family is now officially below average in earning (only £25k pa) and 2) that this is clear political suicide!

I’m not (my family and I) going to be effected by these cuts/changes as we fall well below these earnings quoted and I immediately dismissed this “more than £26k in benefits” nonsense…pretty sure the only families that get that are in the very, very tiny minority (pretty sure I could count the number on my hands and feet!).

Still, is this government on a course to completely dismantle the social equity in this country? I mean, this latest will come in just at a time when people are deciding who to vote for (2013)…clearly this is aimed at LOOSING votes…so I can only surmise that it is intended as a “political suicide note” to be left for the Labour government that seems more and more likely to come back in within 5 years!

Begs the question, IF this option truly IS the easiest...why not introduce it now?? If I was of that mind-frame, I'd be thinking this government doesn't WANT to be here in 5 years time (something we're not being told??)

Cuts ARE needed, we all accept it but ill-thought and compromised nonsense like this isn’t what we voted for. Clear, Fair, practicality is what is needed now…at this rate all growth will killed, poverty will be rife and those the voters wanted to “pay” for the trouble they caused will still be sitting pretty.

And of course, when Labour gets in next time (at this rate I doubt the bookies will be even accepting bets on that!)..they’ll have just as bad a mess to clear up.

Not enough of us voted Liberal clearly…where is the common sense in this? It only panders to the old school tories (Thatcherites) who hold by outdated and extreme rightwing views such as “people like that shouldn’t have children” etc etc. I strongly believe baring children is a BASIC HUMAN RIGHT and new population is the only way a country can grow economically...so get realistic about this, people WILL have children and I was brought up to acknowledge that you can NEVER truly "AFFORD" children...ever! (unless you're one of these people who earns £45k+, oh hold on...they can't either now can they!?!)

"Update 1246: A government source has just told me that the chancellor's benefits cap is more a "symbol" than a policy whose implications have been fully worked out and will produce real savings."

So all playing to the gallery...and the usual suspects on this blog have fallen for it hook, line and sinker...

Very clever and oh so creative.

A little bit here and a little bit there

Nothing so far that anyone could even call 'regressive' as they put it.

Even the labour lot are really struggling and their attempts to defend high income earners when they themselves would have taxed them until the pips squeak is quite hilarious.

High income earners in the main will accept this as inevitable and a few less meals out is a small price to pay for the delights their children bring.

How many will say they wouldn't have had their children if they'd known they wouldn't get child benefit?

Not only that it is another three years before these measures come into effect. Surely they can adapt their lifestyles to cope over that length of time.

I'm sure the majority of people have no sympathy for these moaning mickies and minnies.

@ chris911t

"make arrangements with the people they owe money and if necessary you put your house on the market and move down a notch."

- and which housing market allows that precisely? Not only to mention that a bank WON'T lend you a new mortgage to cover the new, lower cost property as you've just defaulted on a larger one. Without an Economic recovery to actually allow people to move house or get jobs with wages of a suitable level (and trust me...there are NONE!..I want to move jobs and can't for that reason), your proposal (and the governments by the way) only leads to more social spending as we have evicted families on the breadline claiming...oh, I dunno...benefits.

Or, how about we just let them live on the streets and beg? Ready for that yet?

..didn't think so.

Can someone please ask George if the Family on capped benefits of £26,000 will be paying tax on their capped benefits package?

I just wonder as, if they don't, then they will STILL be better off than the working family who earn £26,000 and have to work to earn that princely sum!

Does anyone actually know someone who gets £500+ a week in benefits, and I mean know, not just read about in the rags...?

Me neither

One family loses the benefits at £40k income, just down the road I'm still funding benefits to a family at nearly £80k income ?????

Looking at this scheme, anyone would think we had a bunch of public schoolboys with no experience of the real world running the country.

Oops - we have.

It would be more family-friendly to raise higher rate tax and retain universal child benefit, as those with no children or with adult (non-student) children have fewer responsibilities.
And if some difficult or overburdened adult turns done a job that is deemed suitable, do their children go homeless and hungry?

I have to question the wisdom of announcing these welfare reforms at the Conservative Party Conference.

Firstly, the pain arising will be attributed to the Conservatives and not to the coalition in general.

Secondly, and more importantly, the reforms to the welfare state are, we are told, so radical that it would surely be better to announce them (to Parliament, of course) in one go. I think the drip feed of, generally, bad news will be politically damaging.

Labour must be delighted, and don't deserve to be.

This country seems to need a reminder every decade or so of what
Conservative ''fairness'' means.

Next time a man who minimises his tax by residing in Belize pays for a
bunch of posters in marginal seats emphasising 'what the Conservatives
will do for the family', perhaps it would be best not to be fooled
again.

Let's see Vodafone's, Philip Green's and Lord Ashcroft's billions
before we lose our Child Benefit.

As the 'current bun' says in its leader today, we're about one trillion pounds in debt (actually £952 billion but will probably be one trillion by Christmas).

And we can see from the comments on the these blogs that the (faultly) 'collective memory' is alive and well.

That is 'the people who got us in this mess' are mostly deemed to be bankers, hedgies and other 'spivs and chancers' in the City of London.

Actually the facts, if anybody could be bothered to put aside their prejudices for one moment, are that the previous Government more than doubled the National Debt from £320 billion to around £700 billion.

The banking crisis has added another £160 billion to the debt but there is every chance of that being repaid over the coming years and maybe even a profit.

The general public should'nt beat themselves up over this, because fundamentally, politicians, over decades, have got us into this mess and politicians are going to have to get us out of it.

However, the 'getting out of it' invariably means huge changes to Government computer systems and there the track record is appalling, as dutifully noted by Computer Weekly journalist Tony Collins over about three decades.

Project methodologies have been developed to track and flag systems development,giving early warning of deviations, but one senses that an unhealthy relationship has developed between senior Civil Servants, politicians and certain IT suppliers over the decades, which has meant that the tax-payer has been ripped off time-and-time again.

They really must be rubbing their hands with glee as they read of all these proposals for a radical restructuring of the tax-and-benefits systems, which poor old muggins, the English PAYE employee, is going to be paying for - through the nose again.

51

A lot of hysteria, and it is not as if the current tax system is all sweetness and light is it?

Two weeks ago HMRC admitted that millions had either over or under paid tax.

There are regular reports of millions of workers been given the wrong tax code so are either over or under paying tax on income.

The National Insurance Number itself is a joke: the number is derived as an unique combination of name and date of birth. But 3 John Smith's say born 1 Jan 1960 living in Glasgow, Leeds and and London will all have the same NI number - hardly unique!

The current system is not for for purpose and worse still this is not news. The IT system is geared to individual tax payers, and always has been. Employers potentially could take a workers partners details and let HMRC know but that would contravene the data Protection Act. Funny how people seem to think that databases can be created out of thin air.

I can't believe some here have fallen for this. There are 2.47million unemployed. Osborne's "announcement" may (note may) refer to about 50,000 families...a govt. source has said it is a "symbol" and that it has not been costed, its implications worked out or if it will save any money at all...

This is classic mis-direction.

Why not move ALL benefits into the tax system? It would then be possible to manipulate the tax allowance system to prevent those who 'scrounge' from exceeding the 'cap' of £26k. A new tax band and a special 100% tax on all 'income' if ANY part of it is derived from state benefits over this figure. I know there will be an element of giving with one hand and taking back with the other but I reckon it will send the right message

The savings from the CB changes....£1billion.
The savings from the benefit cap....£???????.

Vodafone have been excused paying £6billion in upaid tax.

Lets put things in perspective...

Nick

Are you telling me that there are people living in Central London who can't get a job? Pull the other: it has a bell on it.

Maybe they can't get a taxpaying job as they are too busy working.

@56
"It would be more family-friendly to raise higher rate tax and retain universal child benefit, as those with no children or with adult (non-student) children have fewer responsibilities."

So we continue to reward people for having children? Increased population, that's just what we need... and of course I'm happy to pay for it because I have "fewer responsibilities".

This was well thought out...not.
Instead of hitting the layabouts, the lazy and the chavs who contribute nothing to society other provide employment to social services lets hit those of us who work hard in order to provide for our families.
To top it all it is the very same underclass that complains of an unequal society when it is my very hard earned taxes paying for the nylon that goes into their shell suits and the electricity for them to watch x-factor. If they directed the energy put into winging into working then we would prosper once again. Look at why China is prospering - hard work and encouragement of excellence. If you dont work in PRC you go hungry, that's the incentive we need here too.
We will only put up with so much.....

64 stanilic

I agree that I too cannot believe there are people in London who can't get a job.

But if they are living in expensive houses and are getting their mortgage interest or rents paid by the state then why should they bother even looking for a job. Or is downsizing not an option in the South East of England?

At the risk of dismantling half-the Civil Service, why do we just not have one benefit, adjusted to cater for factors such as disability, which pays out a some fitted to individual need, and linked to the tax system to cater for those in work. The actual structures would be very simple to create, and to develop systems to handle -- the amounts for each factor and any cap might be a touch trickier, but are de facto in place at the moment.

As for 'family based' allowances - forget it. They would be just too difficult to administer, and why should benefits be reflective of living arrangements? The married man's allowance went years ago, and good riddance, my wife is a person in her own right, not a possession that I should be able to offset against tax.

66 papahuhu

Your admiration for the way China exploits its workers worries me.

Bad enough we are prepared to buy their cheap goods knowing that their workers have no human rights or civil liberties without advocating that we should adopt the same approach.

We need a level playing field but that means that China should adopt our standards not us dropping to theirs.

We have to give the coalition a chance to adopt their new approach to getting people back to work. After all anything that gets us out of the awful rut of paid laziness is well worth a try.

virtualsilverlady #69.

"Bad enough we are prepared to buy their cheap goods.."

totally ignores how China got to be the principle producer of our cherished consumer trash. you don't 'play' on the stockmarket I take it?

Nick,
There are worrying signs of slight inadequacies or incompetences appearing regularly from the Coalition: Gove (statistics), Alexander (muddling difference between tax evasion an avoidance), Fox (claiming no scope for MoD savings) and now GO with his taking of Child Allowance from £45K single income families but leaving two £44K income families to retain the benefit.

I heard your piece at 6pm. Did you ask him, Nick, why he had decided to not simply make all benefits taxable? That would solve the problem of unfairness in the CA change.

And did you ask him why the change to CA will not apply until 2013/14? How will the £1bn saved then help UK debt deficit reduction now? Why is it not scheduled for the 2011/12 tax year?

Not enough questions, Nick. I think we should be told.

Move over Gordon Brown, King of the stealth taxers. There's a new kid on the block. Welcome, please, Mr George Osborne and his sneak tax on the middle classes. A.k.a. the withdrawal of child benefit method - Come to think of it, it should be about as effective as the other withdrawal method.

I Like your post script Nick, doubtless loads more gesture politics on the way. Maybe next time you interview the chancellor you could ask him what he is going to do about the estimated £6.8B that goes missing from corporation tax each year, and as for servicing the national debt, it is estimated by the NEF that we have pumped some £1.2 trillion into the banks, hopefully he is going to let them pay the interest on their borrowings? Clean up some of the big unpaid sums sculling around, not mentioning the V word, and he won't then need to "nickle and dime" our way out of the financial situation by going back on promises he made last year to pull in a relatively paultry £1B from 2013 onwards from easy targets.

I have never posted before. But I just have to say I am annoyed about the potential loss of the family allowance. If they wanted to upset middle England if that is what I am, then they have done it. I cannot stomach this and feel totally enraged.

This is just not fair......

Q. If benefits are to be capped at 26,000 what is so wrong with capping banker's total pay?

Once you start capping there is no excuse or avoiding capping everything - what should anyone receive more than the Prime Minister?

George Osborne needs to address this issue urgently! He raised 'capping' now he must explain what is wrong with a National Maximum Income!

"After all anything that gets us out of the awful rut of paid laziness is well worth a try." virtualsilverlady @69.
I know. It's quite shocking. Which reminds me have our MPs and Lords sorted out their own problems re. the Westminster culture of dependency. Surely someone on their salary doesn't need subsidised food and drink and a £400 pound a month food allowance. Not to mention their heavily subsidised housing benefits. Enough to make your average welfare scrounger seem almost acceptable.
Funny how some problems go to the back of the queue.

The general idea of not giving child benefit to higher-rate tax earners is a good one; if you earn around/over £45k/year then you don't need to have child benefit. Benefit is only supposed to be there as a safety net for those who can't afford to feed/house themselves or their children with their basic income. Benefits were never originally intended to be used as wage-boosters for millionaires or those earning roughly double the average wage.

So, the principle is a good one. Because if you don't follow this principle then it'd mean that a single person earning £10k/year is effectively paying part of their gross salary directly to a millionnaire's children, and it's obviously extremely unfair for someone on a low salary to fund the lifestyle of someone on a high salary.

Up until this point, child benefit has been ridiculously unfair; taking money away from poor people who have no kids, and giving it to rich people who have kids.

"Universal" benefits are intrinsically unfair in this regard, and shouldn't really ever exist as being "universal".

However, the way that Osborne's doing it is just plain wrong; it's not beyond the wit of man to have a system which lets you specify BOTH parents' combined income, and then use that figure when working out if someone's entitled to child benefit. You have to differentiate between parents' income and the household income (as you may have divorced parents living apart but where both parents are still responsible for the children).

You should simply add-up the total gross salary of BOTH parents (regardless of where they live), and use that figure; it's not rocket science.

It annoys me intensely that as someone on a relatively low income, I have to currently pay child benefit out of my low income to people earning 10 times what I earn. For single people that annoyance is even more apparent.

Osborne's general idea to stop child benefit from being universal is perfectly fair and reasonable, and well overdue, but the logic he's using for the calculation is unfair.

What a Car Crash of a Policy.....It would be funny if it wasn't so serious.

So a two earner familly, one on £44.2k one on £40k. They have three kids. Due to lose say £2500 a year net. The high earner with most understanding employers could say, Boss, please can I convert one of my weeks holiday entitlement from paid to unpaid leave, give it to charity if you wish. They keep the Child benefit but still earn £83k. Who could blame them??

Interesting to see that all the people posting here who are trying to pick holes in the idea and coming up with ways to circumvent it and find ways of exploiting the system are for the most part on the left is it not...? Quelle surprise!

I haven't read all today's posts but I bet someone has said something on the lines of "If you can't afford children without benefits you shouldn't have had them" Usually said by those who made the opposite choice or have no children for more "Darwinesque" reasons and remain eternally bitter.

Children growing into the next generation of wokers/taxpayers are an economic necessity. Parents and children should NEVER be punished financially for the follies of reckless bankers. A minute, tiny increase in tax on banks and/or bonusses would raise the same money.


Its a no brainer but Gormless George still managed to fail the test!

63#

Not excusing the revenue for its cock-ups, but you may have to ask under the stewardship of whom was a) the revenue and the customs guys together in the first place and b) under the stewardship of whom in particular was the department when it became politicised, demoralised and incapable of running its outsourcing contracts or even basic data security.

After all, we never got to hear about horror stories like this fifteen years ago did you? Where did it all start to go wrong??

79 Fubar

"pick holes in the system"???

Are you going to defend this?

Couple £86k keep benefit....Single earner £44k lose benefit!!!!!!

There's no picking to be done, the hole is Gaping in front of you providing the blue blinkers don't gey in the way.

Defending the indefensible eh Fubar? Quelle surprise!

"Project methodologies have been developed to track and flag systems development,giving early warning of deviations, but one senses that an unhealthy relationship has developed between senior Civil Servants, politicians and certain IT suppliers over the decades, which has meant that the tax-payer has been ripped off time-and-time again."

Excellent, highly relevant point, especially where the outsourcing contracts are concerned. Add that to a civil service IT profession, which on the whole, whether either in procurement or operations is stuffed with management who just purely keep their heads down, avoid taking difficult decisions whenever possible and have refined fudging to an artform, yes, its a recipe for disaster. Between them, EDS, BT Syntegra and Accenture should have been hung, drawn and quartered for some of the situations we've found ourselves in down the years...

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

This is anodyne cheerleading. A far cry from the hostile fire directed at last week's conference. Is he really the BBC's chief political correspondent.

82#

I didnt say I was defending it, did I Eaton?

I merely noted that most of those who are attacking something that hasnt even been turned into a policy yet, let alone been put into practise and are finding ways to circumvent it, happen to be from the left.

And yet, when those people with more money than you that your lot are sooooo bitter about do exactly the same - find legal ways to play the system to their own benefit - you and the rest of the part-time-proletariat are all over them like a rash, waving your pitchforks. I find it quite amusing deep down.

Even if it does become policy, I dont care, it doesnt affect me, I'm one of the "Darwinesque" bunch who chose not to have kids.

I'm not bitter about it, means I dont have to put them in kennels for a fortnight when we go off to the Caribbean every year.

Look at today's conference . There is no mention of the Conservative or Tory Party there --- ' The Party that cannot speak its name' . Why because we all know it is Theresa May's Nasty Party . And , true to history we have Ian Duncan Schmidt declaring ' Ve haf vays of making you vork ' . Look out for the 'Blue Shirts'!.

Seriously -- IDS cannot deal with a family of two earners earning over £80 grand in allocating child benefit because quote ' it isn't possible because it's too complicated and will take time ' whilst his superior ( politically ) says ' we will cap benefits to those families which earn too much' - which George believes is feasible . Which one is right ? either it is or it isn't possible to work out benefits for an entire household ..

Just like nulabour ( bluelabour ) this is full of sound bites - and just like GB it is all being postponed for the next couple of years .

As some posters keep saying ' this is a good time to be a Nasty'

To complete this item let me quote Sir Walter Raleigh ' The Lie '

Tell Men of high condition ,
That manage the estate,
Their purpose is ambition,
Their practice only hate,
And if they once reply,
Then give them all the lie ( i.e. say they are lying)

Tell them that brave it most ( i.e. live ostentatiously )
They beg for more by spending,
Who,in their greatest cost ,
Seek nothing but commending ( other's approval)
And if they make reply,
Then give them all the lie.

I(just)DontBelieveit! Hold the presses! Fubar_Saunders approves Coalition policy of taxing away money that it thinks some people don't need and which it thinks it can spend better. Or maybe I got confused about what you meant because all that meaningless invective against the 'left' got in the way.
If you feel you have a contribution to the subject please feel free. Susan was very dismissive and if you can't see problems with the policy or how it was announced then you really should have gone to 'a well known chain of opticians'.

If 'heaven forbid', Labour had won the last general election ... child benefit would (on Labour's own spending plans) probably have to be cut far more than anything George Osborne is doing ... and taxes would also have had to have been raised on those receiving child benefit aswell.

Having more and more kids while living on benefits should not be an option for anyone ... ever increasing housing benefit payments have just been feeding greedy landlords who are and have been the main recipients of higher and higher rent payments from those in receipt of housing benefits.

Lower the housing and other benefits average payments and rent levels should stabilise or even fall slightly in many urban areas and those who have to pay their rent themselves i.e. out of their own earnings will also be better off with more stable or even lower trend rent levels. This also keeps check on housing costs as an element of higher and higher inflation within the economy.

Everyone should benefit from a maximum welfare payment - because of the huge pressure/demand on UK rental housing.

There is a lot more to it than anyone at the BBC will ever figure out! I thought that the BBC was looking for the 'big picture' these days?

I can't understand why we deem someone earning £44k to be wealthy when we are taxing them but poor when we are paying benefits.

If Osborne had suggested reducing the 40% tax rate we would have had "tax cuts for the rich" complaints from the left, he cuts child benefit for them and we have "benefit cuts for the poor".

This idea gets a thumbs up for being a move in the right direction but a thumbs down for simplicity - why not remove the benefit from everyone and incorporate into IDS's universal benefit?

How many more "policies" made up on the hoof and in great haste, not included in either manifesto or even the Coalition agreement are still to come??

Where's the Lib Dem voice on today's announcements considering their own party resolution from just two weeks ago re Child Benefit

AS71

Better still 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.

And another thing...

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...

I am totally confused ... do our new Government have a plan ? All they seem interested in is saving money, cuts, based on our debts levels, which they take every opportunity to blame on the previous government. Was it their fault, Labour I mean ? It appears that we in line with Countries world wide are in the same position - is this the fault of the previous government ? Our Bankers have used and abused honest hard working people for years, in fact since the last Conservative Government, are they not to blame for our current financial position ? The UK has continued to be a world leader, acting with vision and passion for what is right, yet we seem to be being taken back to the dark ages, this cannot be right !

92 craigmarlpool

Better still 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...

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

I would prefer to see fewer state dependants than we currently have with simple benefits restricted to those who need them and simple low taxes.

Fairness is when in times of need the richest HOUSEHOLD helps the most and if they can't solve the problem you ask the next wealthiest household and so on until the books balance! None of these measures meet that basic starting point. Yes cuts are necessary but there are more marks for your workings out George than your answer. At the moment you are way off the mark!

88#

I didnt say there were not problems with it, did I? Where did I say that the idea was perfect, out of the box, ready to rock and roll?

Nowhere.

What I'm finding more than a little funny is the usual howling by the usual suspects, on the usual subjects aimed at the usual enemy. They have no interest whatsoever in either what the nation needs, what wider society may need (regardless of what policy form it may take, from whoever), it is just pathalogical chip on shoulder knee-jerk opposition for the sake of it.

They cannot let their ground-in, passed down through generations ignorance and hatred see beyond the end of their damned noses.

Never have I seen such ignorance.

O.k It was a bit of a wind up but you did have fun last week - easy pickings. This week you've gotta expect pay back. Nevermind we've clarified the position. You don't need to visit the opticians. The idea is problematic. Not the best. Agreed.

In many ways cutting child benefit for high rate tax payers is the fairest solution, however, what grates is the fact that due to Fiscal drag, being a high rate tax payer at 40% now happens to a huge number of people who are not well off. With this cut, I would like to see the 40% threshold raised to salaries of 50k +. Whilst there will be questions asked of the government, I believe their faithful will stick by them.... Until they mess with free nursery school places! You have been warned....