The case for cutting middle class benefits

Ant

Unfortunately, this ignores the reality that cutting the benefits won't be accompanied by a cut in middle-class cuts. All that such a move will achieve will be to ensure that the already over-taxed, under-represented middle of society contributes an even greater proportion of the nation's tax take.

Now I'm quite possibly in favour of some form of left-wing redistribution of wealth, but let's not dress it up as a win-win simplification of the tax system.

THX1138

Except we're the only ones paying any tax, we should get our share of the goodies but I'd probably rather have a tax cut.

Peter From Maidstone

I am Middle Class, but I don't have spare cash. Why assume that most Middle Class people are wealthy? Most Middle Class people are already bearing a significant tax burden and to take away Child Benefit, for instance, increases the rate of taxation if there is no reduction elsewhere.

I would rather pay less tax than receive credits or benefits, but the Child Benefit is necessary for my family at the moment. Many Middle Class people are on the financial edge, not through conspicuous consumption, but through having to fund their families and homes themselves rather than receiving large amounts of state support. It would be wrong to push people over the edge on the basis of a stereotype.

Pete-s

I agree, even though I will be one of those losing out. This universal benefits is unsustainable. But then those who do receive benefits need to have the screws turned on them as well. The poverty trap needs to be obliterated, the benefit system should not be a rational choice over work because of the money and benefits in kind you receive.

General Zod

It's one of those things that gives me a mild guilty feeling. Last week, I was going through a bank statement and had to ask my wife what a credit for £160 represented. It was child benefit, including some backpayments.

I probably shouldn't feel that guilty, given it lowers my (obscenely high) marginal tax rate by a fraction of a percent, but a system that pays benefits to even the highest earners makes no sense.

Chris lancashire

I hope that the Conservatives, if and when they form a government will have the courage to sweep away these useless benefits. Winter fuel allowance - scrap it and increase the State Pension (which is taxed) pro rata; Child Trust Funds - scrap. Child Benefit - already taxed (I think).

This should do the job without too much upheaval.

Doug

Child benefit and maternity pay shouldn't be cut because it is also the middle classes who raise most of the children who become productive adults in society.

Dirty Euro

No way, what does middle class benefits mean health, education, pensions, they need these benefits as much as working class people and cannot pay for them themselves, this will just make middle class people as poor as working class people to pay for tax cuts for the elites.
This is the whole problem part of the divide and conquer idea of the elites.
First the elites get working class people to support cuts in public services for middle class, on the grounds that it is ooooo unfair for middle class people to be subsidized, then they get the middle class do support cuts in public services for the middle class, after all if they get no public services why should anyone else,. a divide and conquer system. By the end the only winner is rich greedy elites getting tax cuts while the middle and working class are forced into dire poverty.
DO NOT FALL FOR IT.
Someone on 10,000 a year is not much different in income to someone on 20,000 a year but the elites want to divide such people to get both of their public services cut to get a total reduction in the elites taxes.
HERE IS AN IDEA!
HOW ABOUT TAXING THE RICH ELITES MORE !!!!!!

Doug

In addition to my previous comment I don't really believe the idea that cutting middle class benefits and then handing some of that back in tax cuts will ever be a reality. From my perspective history shows that rather than soaking the rich all polticians soak the middle classes. And the middle classes silently pay up.

Dirty Euro

As I have said before the tories are only the party of the rich elites not the real middle class or working class. Thye do not want either the middle ort workihrt class to get benefits.
Message to spectator readers.,
The tories like to pretend that all middle class people go to public school and drive rolls royces when in reality most middle class people are barely welathiert than working class people.
It is mainly dumb southern english people who fall for this con trick. Who vote continually for a party that pretends to represent them when it does not give a flying sideways about them. Vote tory get poorer, unless your rich end of story.

Nick

Although I doubt anyone has any problem with child benefits being withdrawn from the family of a Goldman Sachs managing director I suspect many would debate whether an income of £15,000 pa counted as "middle class".

To quote from the report:

"The estimates presented in this report are for a basic definition of middle
class where every adult in the household has at least £15,000 in income and every child £5,000."

Dirty Euro

So middle class people will get no pensions no child benefit, no university, education, health services,
Thanks a bunch southern english blue rinse country you really are oafs you will vote for a party that will destroy you by destroying every public service you use.

As I have said 100 times before the tories do not represent the the middle class they represent the rich elites, only.
Vote tory get poorer. Why are those middle class oafs in south of england so stupid. They vote for a party that secretly hate them. LOL LOL LOL LOL
Middle class tory voters are idiots, fooled into thinking they are of them while being mocked by their backs. Stupid southern tories.

Dirty Euro

General Zod But most middle class people are not high earners if you are a high earner you are not middle class. No matter how make mockney vowels you fake.

Simon too

If this idea was coming from the point of view of finding the means to fund tax cuts, it might have some legs. It is not and has not. It is framed and directed at reducing government expenditure and, as such, represents a tax increase for those deemed, with a broad brush, middle class.

Even if any consideration was being given to funding a tax rebate, the very costs of means testing would reduce the size of the fund available for rebate below that currently disbursed as benefits.

The suggestion that the middle classes do not need the money when they are trying to pay their own way in the world is fatuous. There may be a simplistic attraction to helping people pay their own way by removing benefits and reducing taxes, but in a time of stringency it will not be possible to reduce taxation by as much as the reduction in benefits.

RMH

Without statutory maternity leave you end up with just the rich and the poor making babies (not in total but proportinatly).

These tax cuts are the wrong place to start. Why not actually reform the tax system in total, remove the loopholes for starters.

Why do we need employees NI which is a tax and the process of it wholly inefficient.

This is what I would expect from Brown. Shameful.

Hawkeye

Doug said: "history shows that rather than soaking the rich all polticians soak the middle classes"

Yep. I agree. I would object to these cuts less if either my tax threshold was raised or the basic tax rate lowered. Stop an army of bureaucrats from passing this stuff around the circus before they hand it back to you. The removal of the bureaucracy would save a few billion quite quickly. The bureaucrats are paid by the govt, but they would cost less on the dole (where the govt still pays them).

"And the middle classes silently pay up."

What are we supposed to do? Go on strike?

Ian Walker

Why not switch Child Benefit to being a personal tax allowance? You get the double benefit of helping low-income parents the most, while eliminating the incentive to become a "baby-producer-as-career"

As for means testing - why not offer people the option to take a discount on their tax rate in lieu of benefits? You don't need to means test then - it would naturally find its own level.

TrevorsDen

I have never heard such a big load of crap in all my life - The Spectator is obviously paying its hacks too much if they think the 'middle class' have room for more tax punishment.

The deficit is terrible but if benefits need to be cut then do it on a %age basis so that it is fair for all.

Is not this just typical - the decent middle classes get stung to keep the chavs in the benefit slum they are accustomed to.

Can I suggest that the RICH actually have some of their wealth misappropriated for a change? Like your owners?? Or some of the greedy unpatriotic bastard bankers who are clearly back onto their get rich quick scams and profiting from fleecing the thrifty. Your bland wafting dismissal of the 'middle classes' stinks -- STINKS!!

Peter From Maidstone

I agree with TrevorsDen on this one. It does seem that the whole tone of the Spectator is drifting leftwards. I keep thinking I am reading the New Statesman.

Coney Weston

I'm not into means testing normaly but it does seem odd that those on a substantial wage - whatever their "Class" - should not be eligible for all the benefits. Surely policy should be about common sense not dogma.

poor church mouse

My partner has two children. We receive: 2x child benefit (£138/month), maternity allowance (£530/month for 8 months) Tax credits (ca £150 reduction in tax on salary every month). It's quite generous, but I don't think we'd be able to manage without it.

HK

The big question about this is does it simplify, or does it complicate, the interaction between the state and individuals?

Can you return more in taxes than is saved in payments, because of the reduced bureaucracy needed, or do you intensify the bureaucracy and therefore the burden of the state because of the need to means test?

Does this increase the marginal tax rate for "middle class" taxpayers, or can tax rates be lowered by more than the same amount?

At the moment, the commentary seems to suggest it will increase bureaucracy by increasing means testing, which suggests that it will complicate. That would be a missed opportunity.

I say this as an expat whose interaction with the Government involves a few minutes a year to fill out a pleasantly simple tax return. Children? Each child increases your tax-free allowance (by about GBP4,000). Same with dependents (whether dependent parent, or disabled dependent).

I seriously wonder if the UK will ever be able to have a simple tax and benefits structure, but it is possible.

Peter

I have maintained this for ages. It is quite ridiculous for families earning £ 30,000 plus to be able to claim the same benefits as those on breadline incomes. It is also ridiculous that people over 60 can claim a myriad of benefits, whilst many are still working.

The entire benefits edifice needs to be overturned so that those who really need them get them and those who don't will get them when they need them.

It will take a lot of work but it is a project long-overdue and if the savings suggested are added to the savings clawed back from benefit scrounging then we are talking significant amounts of annual expenditure.

Judy

With the average wage between £21K and £25K depending on which statistics you choose, the £15K starting point for the cut off of benefits on the grounds of "middle class" status is clearly ludicrous.

What's more it will disproportionately hit single older unemployed and single/widowed pensioners whose net income is between £15K-£20K as the proportion of their present income/benefits they lose will be huge.

The Reform Group has massaged this by trying to present these cuts as affecting a notional "typical" middle class household consisting of 2 wage earning adults plus a child with a £5K allowance with a combined income of £40K as not being affected.

The numbers of single/retired/widow single households that will be hit disproportionately hard by the introduction of such a new means-tested regime would be huge.

Reminder to the Tories and Labour: the educated baby boomer class is coming up to or has reached retirement age. Many are single, but have incomes in the £15K-£20K bracket. Many are highly educated but have little or no chance of finding further paid employment. It will also disproportionately hit those two-income families with one child where one of the parents chooses to be a full time parent to benefit the child.

Those who benefit most will be those on the highest incomes (because the hit they take from the removal of the benefits will be a very small percentage of their net incomes), and those in two-income families.

Peter

Trevors Den - what a stupid, emotive, irrational load of tripe! Read Coney Weston's post - it sums it all up very neatly.

Peter Hoskin

TrevorsDen: erm, did you miss the bit about creating room for middle-class tax cuts?

strapworld

So the Conservatives now will have means testing for all benefits.

Where does one draw the line. What is an acceptable salary/pension at which state benefits will not be paid?

With Quango Chairs and members now attracting salaries in the hundreds of thousands of pounds, Chief Executives of most NHS Trusts and Local Authorities in excess of a hundred thousand pounds - how does that equate to an average £10.000 a year (quoted on Newsnight last evening) £15.000 a year average in Devon and Cornwall.

Will the means test have regional variants?

This is yet another reason why the Tory party had better watch out. WHO will vote for a party with alleged supporters writing this total nonsense?

We really do need a revolution in our politics. Cameron with his all women candidate list -soon to be all muslim or all black I am sure- has proved to me that he should be leader of the Lib Dems! He is certainly not a Tory!

Maggie come back please!

strapworld

If the appalling Trevors Den (who as yet has to give me reasons why Cameron can be classed as a Tory!)
can get away with this:-

"Is not this just typical - the decent middle classes get stung to keep the chavs in the benefit slum they are accustomed to."

I do not want to be associated with this, if it is Tory thinking.

So many decent people come from poor backgrounds. Some, as Iain Duncan Smith has highlighted find it nigh on impossible to escape the nightmare they are in.

Trevors Den has shown why people are attracted to the BNP and not his Tory party!led by the wet Cameron.

Paul D

I'm really not sure about this. The middle classes are the backbone of law-abiding and tax-paying citizens of this country. They work incredibly hard to raise decent families who will be the wealth-producers of the next generation. They are struggling in the recession and they are sick to the back teeth of supporting the idle and the feckless through excessive taxation.

We'll accept a benefit cut IF it is accompanied by tax cuts and a reduction in Big Government as Dave promised in Manchester. It's simple - get government off our backs and give us our money back.

What we will NOT accept is being squeezed even further if it just gives more money to the state to re-distribute (waste). The previous commentators are right that this should be part of a huge simplification of our financial interactions with the state and not a squeezing of the silent majority.

If ever there was an issue to determine how I vote then this is it.

TrevorsDen

HK - Yes lets simplify the tax benefits and if benefits are removed from middle classes lets have bigger tax breaks and lower taxes full stop.

But the deficit is clouding all this. I suspect it can only be done from a position of surplus not deficit. Having said that I think the govt might as well be hung as a sheep as a lamb (assuming it gains power) and bite the bullet over taxes and benefits once and for all.

The structural deficit needs to be cured by cutting costs and creating real growth in the economy, not bogus statistical growth which comes fro expanding the public sector and encouraging immigration. Real growth means encouraging enterprise and hard work - not taxing it into oblivion.

The recent population growth projections show what a disaster immigration has been. It will put a huge strain on the NHS and education budgets, not to mention the national infrastructure.

Sir Graphus

What next? School fees for the middle classes, too? After all, we have university tuition fees. How about charging to use the NHS. After all, it’s the devils own job trying to get an NHS dentist. Slippery slope; the middle class pays all the tax. We have to get something back.

Peter From Maidstone

strapworld, I certainly don't agree with much TrevorsDen says generally. But you miss the point in his comment. He objects to the Middle Classes supporting those who do not want to get out of the benefit culture. I do not see that he is criticising all those on lower incomes, rather those who don't want to work at all. I think that too many of us know plenty of people who don't work and won't work.

It is reasonable to ask why our Middle Class incomes should be taken to support them, and their growing numbers of children.

I have no problem with the 'decent poor' being helped generously. I have no problems with the 'feckless poor' being helped - but I do not believe a guaranteed income with no strings is NOT the way to help them.

Walking round Maidstone yesterday there were plenty of shops with adverts in the window looking for staff. When I was last unemployed I applied to Toys-R-Us. There is no shame in having any job at all. The shame should be in not wanting to work and having extra children to gain a greater income.

But shame seems out of fashion in the 21st century.

Talia

Excuse me, but what about single people who get to pay the 8p in the pound but get absolutely nothing in return? It’s only those who have chosen to have kids who get all the benefits. It’s their choice – let them pay for their lifestyle themselves.

TrevorsDen

Dear Strap - I come from a poor background, terraced house, back yard, outside toilet the works. My late brother was the first (of to date only 2) in our extended familly ever to go to University. I went to what was then a Poly. Don't you dare imply that I despise the poor. I support the decent and I support Duncan Smiths work.

The plain fact is benefits keep people in a ghetto of lack of achievement which labour solder them into by providing zero education. The gross increase in invalidity benefits and the such like, whilst cheap immigrant labour covers their work, is one of the reasons behind our massive structural deficit.

All paid for by the ever squeezed middle class. Cameron is absolutely no different from the mass of the conservative party and more importantly the conservative voter. He comes from a long tradition of Macmillans and Whitelaws. Oh and according to (I think) the Guardian the Obamamites on the other side of the pond are worried about Cameron's Euroscepticism.

I am a solid right of centre conservative, happy to have Cameron as leader even if he is to the left of me, and quite why complaining about the shambles of our gross and out of control benefits system should some how drive people to the BNP is a mystery I suspect you would have difficulty justifying.

I have had the benefit of seeing the recent Panorama programme showing the naked racism rampant on our working class (Labour voting) slum housing estates perpetrated by the benefit chavs you seem to think do not exist. A programme that made me ashamed to be British - then we had the photos of drunken girls kicking an incapable bloke.
You may think our underclass does not exist but it does and its growing, and this despite the middle classes being squeezed of any spare cash they might be trying to hoard.

I sincerely hope you are not accusing me of being a racist otherwise even my old frail frame might be forced to ask you outside.

You are the appalling one - with your constant pathetic anti Cameron smears. Only Enoch Powell would suit you.

Tiberius

The best way to save £31b is to reduce accrued public sector pension rights to the same degree that Brown has helped himself to benefits from private sector pensions.

Then we really would all be in this together.

strapworld

Well, yes, I much prefer the educated Enoch Powell to Cameron. It is obvious you get your views from Newsnight and The Guardian.It is also obvious that you consider Enoch Powell a racist- which he most certainly was not.

I know far more about benefit cheats than you will ever know. I have policed in the East End of London have seen terrible estates and terrible people within them. I have also met a great many decent people trapped in these terrible estates and they have been thrown on the srap heap by both major political parties.I greatly welcomed Iain Duncan Smith's excellent reports.

Like yourself I was born and brought up in a working class household and am proud of my background. Frankly I achieved a great deal and even got a gong from our sovereign.

So I will not take any sermons from you. You knew what you meant and any attempt to gloss over with threats to 'ask me outside' (wich is the normal reaction from someone who cannot back up his argument! and also does show a lack of intellect) is just childish.

Mind you it would be comical!

Just learn to place brain into gear before writing your nonsense.

I also suggest you read Heffer's book on Powell. You may learn something.

TrevorsDen

Strap - I think we have been here before. I did not so much admire Powell as despair of him. I would not read anything by the oaf Heffer - but would take Powell over Heath any day. You continue to rabbit rubbish if you think I read the Guardian.

I know what I meant and I for one am furious that once again people are talking about soaking the middle classes for the failures of Socialism. That attitude is not driving people to the BNP. And it is not nonsense.

How are we to achieve anything by penalising people who do the work. On top of which take a look at experienced and senior nurses pay to see who we call middle class these days. They will be caught in the web.

Benefits have got out of control - but taking them from the so called middle classes without a significant increase in tax allowances is criminal.

Andy

I suppose to an observer, I'd be considered middle class, but I'm a pensioner. Being frugal (no debt, only savings) I don't qualify for any benefits except the non-means tested winter fuel allowance (which I use in part payment of fuel for my heating system because it doesn't meet the whole bill). I'm entitled to a bus pass, but I haven't claimed it because at the moment, I can afford to run an old car and anyway, buses where I live are pretty few and far between, plus I live in the Marches so I can't get to my nearest town on a free pass as it's over the border in a foreign country - thanks, Tony, for Devolution. Throughout my working life, I contributed through tax (still do on my pension) and NI. If they want to save money, not to mention the planet, limit child benefit to two children, given as a tax rebate the way it used to be.

Tiberius

Hope you won't mind me saying this, TrevorsD, but welcome to the world of the big self-dug hole that those of us, whose instinct is to support Cameron, sometimes have to inhabit.

TrevorsDen

PS
"those who have chosen to have kids who get all the benefits"

Its because having children (I have had none myself) is perceived to be a benefit to the community that their upbringing is encouraged. Parents etc buying all the accoutrements that go with children refund the state in taxes!

Ah dear peter from maidstone - I don't know which is worse having you agree or disagree with me.
But what I say is this - the nation needs its middle class.
Exploiting it without resolving the problems of the millions languishing, incarcerated, on benefits will solve nothing, merely destroy the nation in the longer term.

And I reserve the right to get livid about it.

RMH

This reads like 1984 and Ronald Reagan with his trickledown economics is around.

That was not a good idea then and it is not a good idea now.

Peter From Maidstone

Dear TrevorsDen, probably, as in most online forums, we would discover over a pint that we agree more than we disagree - otherwise we would not be Spectator readers. My wife thinks I am getting dangerously 'political' as I get older, but actually I become less confident that politicians are able or willing to do very much at all. I can't even remember what we may or may not disagree about.

General Zod

I have no mockney vowels, Dirty Euro, be reassured.

I know that you want to assimilate the middle clases into your great proletariat alongside the working classes, but the fact is that the middle class is very broad and deep and there are an awful lot of people on incomes above £50k per annum, twice the national average. Should they get child benefit?

The whole tax system needs to be reformed and simplified so that the poorest pay no tax, there is no tax trap that makes people coming off benefits poorer if they work and using allowances to target extra help where appropriate - better not to pay the tax in th first place than to get some of it back in the form of benefits.

Stephen

Where have our principles gone? Judging by the comments it looks as though we are very good at finding reasons why someone else should pay more or, in this case, be given less. Either they are too undeserving or they are rich enough to afford it. Make 'them' pay. Don't care too much who 'they' are. As long as it's not me.

For example, Child Benefit should not just be means tested, it should be scrapped completely - we don't need more people in the UK but we do need to cut government spending. By billions. But Speccie readers needn't fear. We can see from the reaction here that the 'middle class' have enough voting power to prevent too much cost to themselves.

Peter From Maidstone

General Zod, I agree with you. It is always better to not pay the taxes in the first place than have a whole industry and organisation paid for and pensioned to allow me to claim it back.

Fergus Pickering

You take away child benefit from ordinary people and there will be blood in the streets. Besides, don't you WANT the middle classes to have childrehn to leaven the lump of immigrants and home-grown criminals. Mad people!

General Zod

Woo! Peter and I agree on something.

I fevently hope that the next conservative government will quickly turn to reforming and simplifying the labyrinthine mess of our tax system starting with the pinciple that tax should only be payable once a decent income above benefit levels is attained and that allowances not benefits are the rule.

The tax lawyers' and accountants' bible, the Butterworths Yellow and Orange Tax Handbooks have grown physically by something like four inches in thickness under genius Brown.

Cogito Ergosum

A fairer system of taxation, in which people pay for the services they use, would be as follows.

1. The rich pay for armed forces and foreign policy. After all, they have most to lose if we are conquered by an enemy.

2. The middle class pay for the NHS and police, as they benefit most from these. (The rich can afford private medicine and fortress houses.)

3. The poor pay for social security, as they are the ones that use it.

4. No state education, and hence nobody paying. Comprehensive schools are a comprehensive waste of money.

Dirty Euro

Cogito Ergosum Well how is anyone supposed to get an education that is ludicrous that is right wing extremism. The poor have no money how can they pay for social security.

Stpehen you values will cause extreme poverty,. You have values of greedy right wingers.

Nick Grady

There is, if anyone pauses for thought long enough, only one way to get out of recession and that's to spend out of it. Messrs Brown and co are right in that respect, but unfortunately are playing the wrong ball. Credit, loan and mortgage interest rates have to be reduced, for credit and loan accounts currently at 23-30% a reduction by several percent. Current interest rates only benefit high rolling investors who don't give a damn about anyone but themselves. We need to cut them out of the equation. Real money has to be created to create purchasing power acrosss the whole of the economic spectrum. It was blinkered and narrow minded political and financial agendas that got us in this mess, but, with a little common sense it's not hard to see that the people with the most to really kick start the economy are the British Public themselves. We need capital release schemes and reduced interest payments, debt consolidations etc for the man in the street, and lots of them, with minimum interest costs. This will get more money into the market quicker than any other proposal currently on the table. GDP is all about turnover - and who creates that turnover? We do, the great british public. If the banks can bring themselves to chill out for a bit and live for tomorrow instead of today, everyone will benefit in the long term. Banks need wide range markets for business to attract ans sustain long term investment and profitability including the UK. Can they really afford not to back us when we need it most? People have long memories - I'm sure thare must be at least one institution out there who realises there is a massive fortune to be made out of investing in UK PLC I.E. British Public good old you and me. What about it chaps? If the UK goes down your investors will walk away from the market. There's 60 million UK customers looking for business - can you afford not to support us? Get those interest rates down. Get them down NOW.

Neil Wilson

This is a silly article, entirely ideological and demonstrates a very poor understanding of accounting.

There is no difference between paying out £31 billion in benefits and having 8p extra on income tax, against not paying anything out and having tax 8p less. The net trouser is exactly the same.

Yet if you have means testing on benefits *and* on taxation then you are paying real money out to do the job twice. That is real money paid to real administrator that could otherwise be doing something useful.

Have you seen how many trees get pulped to handle Tax Credits vs. Child Benefit? You can't even apply for tax credits online because of the possibility of fraud.

No the Universal Benefit is the most sensible approach - with minimal entry criteria that are easily validated. That handles the state's obligation to provide a safety net and it should be available to all (as long as they are working - or exempt from working due to retirement or illness).

Then the tax system can sort out the 'fairness' aspect by taxing people on their individual circumstances (or perhaps in a family unit if that's how we want to go now).

We pay wages gross to the public sector and then recover PAYE. We pay state pensions gross and recover PAYE. VAT is done on a netting off basis.

Why not individual benefits and taxes?