The beginning of the end of universal benefits

luke

They are unlikely to "own aspiration" whilst creating a 1000% marginal deduction rate for people when they become top-rate tax payers.

Hopeless

Jannie Geldenhuys

Labour can bitch and moan all they like but once it is gone, it is gone.

Labour fought the demise of free eye tests and dental check ups but did they restore them once in power?

Commentator

All this is is a disguised tax hike on the middle classes dishonestly sold as something else. If child benefit is "middle class welfare", then so is the state pension, access to the NHS and access to state education.

Naomi Muse

It has to be right. I know that several 30/40 somethings, who share my blood line, won't like it at all but it really cannot be right for people on lower incomes to be taxed to pay child benefit for those who can afford to move house, have three children, 2 hols a year abroad, three cars and strip an historic house out to completely revamp it. They cannot need child benefit, and btw work for the public sector too.

Percy

I recieve child benefit which I don't need and agree it should be reformed but this ham fisted reform just looks like total suicide. IDS and Dave better have something pretty bloody good up their sleeves.

Bloody Bill Brock

I cannot understand why people who pay high rate tax on earnings or pensions feel they have entitlement to state handouts. Those Tories who feel they have the entitlement are not really Tories, just greedy bastards. And those socialists who think it is right on, have totally lost sight of what and for whom state handouts are for.

Robert Eve

Sounds very sensible to me.

John Findlater

If this is the beginning of the end of universal benefits, then the National Inusrance payment should also go.

Lets assume you take out an insurance policy. You pay a regular sum every month for years an years. Then when its close getting a payout, the insurance company says you cannot get the money because they have decided to insert a clause that prevents you from getting your payout,,basically it is fraud.

So, unless the government allows people the opportunity to opt out of paying National Insurance, combined with paying back the moneys already payed in,,they will be committing the same fraud as the private insurance company.

No Universal Benefits,,should mean no Universal Payments eg National Insurance,,because those of us who have been thrifty can take care of ourselves.

Nick

Next stop, the State pension.

After all someone has to fund civil servants and MP's pensions

Tiberius

I think there are a number of people who don't get the psychological aspect of CB for higher earners.

It may have started out as a universal benefit but it has now become a relief, following Brown's stealth taxes of lowering the 40% band in real terms and of hiking the NI rates.

For all the talk of scorched earth and booby traps, it appears that Osborne may have tripped one that not even Brown himself realized he'd set.

Janet Daley wrote a very good piece on this a few weeks ago in the ST.

Jannie Geldenhuys

@JohnFindlater

NI isnt an insurance premium - an insurer maintains a fund to meet claims on it - the government has never done this. It is just income tax by another name. So I agree, let's be honest (as Ed Miliband likes to say) and scrap NI and have a transparent income tax system. Hopefully that can come out of IDS's reformation of the tax and welfare system.

les

It's quite novel to see Labour complain about benefits being cut from high earners!

Richard Calhoun

The priority must be to reduce the scope of the welfare system to very low earners and those in society who will always need help.

If this is the first step, I welcome it, but it must be followed up within 5 years with tax reductions for those on higher incomes.

AG

Tiberius I agree. I think some of this is fifth column stuff that has sneaked in unrecognised. I said right in the beginning that the change to CPI indexation of pensions was copying Bruin and I wonder which official helpfully suggested it and now we have a 'tax' on motherhood and apple pie that is so like socialism that Ed Elasticband won't be able to 'get one over'on us with it and in which case why didn't someone shriek "there's something wrong here"?

Nr

I'd have been happier if he'd left it at, "it's difficult to justify taxing people". That would be a truly Conservative opinion. Unless there is some magic to come i.e. tax breaks for married couples, this is going to prove very unpopular. Not because, as some assume, CB is needed but because there are so many other frankly ludicrous schemes Labour introduced to deprive us of our income, it's impossible to believe CB was the most deserving example.

David Lindsay

Middle-class benefits are right, just and necessary. The median household income in this country is £21,320. That is the middle. Ninety-three per cent of children attend state schools. Every business is dependent on them, as it is on public transport, on the road network maintained at public expense, and the National Health Service. Indeed, hardly anyone has private health insurance, and a large proportion of those who do, have it through their trade unions. And so on.

In the present state of affairs, extremely few are those who could do without their Child Benefit, or their tax credits, or their state pensions, or their winter fuel payments, or their free bus travel, or their free prescriptions, or their free eye and dental treatment, or their free television licenses. Taking away consumer spending power is hardly the way to aid economic recovery.

Paid for by what? Not by any private sector, as that term is ordinarily used. Thus defined, there is no private sector. Not in any advanced country, and not since the War at the latest. Take out bailouts or the permanent promise of them, take out central and local government contracts, take out planning deals and other sweeteners, and take out the guarantee of customer bases by means of public sector pay and the benefits system, and what is there left? They are all as dependent on public money as any teacher, nurse or road sweeper. Everyone is. With public money come public responsibilities, including public accountability for how those responsibilities are or are not being met.

Dimoto

It's pretty obvious that the full weight of "financial consolidation" will be born by the 3m or so who earn more than £44K.
There will be minimum "benefit recovery" from cheats, and minimum contribution from those earning more than (say) £200K (we need them too much).

When we eventually come out of the other side of this crisis, income disparity will be even larger than before (has been getting worse for decades), with a mass of poorly paid people, a tiny elite of big earners and very, very, little in between.
Pensioner wealth will also whittled away by the punishing interest rates, transferring money to the banksters.

Perfect, fertile conditions for a socialist government, red in tooth and claw.

A pensioner

The welfare state should be a safety net. As it stands it's a disincentive to the work ethic. Those who pay NI ought to be able to get something back. As far as I'm concerned, I've paid for my pension several times over with the tax and NI I've paid all my working life. I'm not pleased to find that people who've made no contribution are getting at least as much as I do.

HFC

The biggest losers here will be the off-licences and wine bars in middle class areas.

Kennybhoy

"The end of universal benefits would, though, change the nature of the welfare state. Quite rapidly, it would become a safety net not a contributory system."

From your key board to God's ear. To the best of my knowledge our Welfare State never really was a "contributory system". All of the tax income, including NI, went into one general pot.

Clear Memories

The predictable whinging is only to be expected. The sad thing is that those affected are generally the more intelligent who can't seem to see the mess we're in and where the fault really lies - with Bruin and his cohorts.

Their purchasing of the votes of the welfare classes was little more than treasonous, the cost cannot be afforded by society and welfare has to be cut right back. Hopefully, when they've calmed down, they'll realise this is but the first step on a long path that will, ultimately see them and their children far better off in the future.

The best news, if followed through, is the proposal to limit the total benefit. This will, hopefully, stop the inconsiderate breeders with hordes they can't possibly afford. It might also act to limit the huge levels of procreation amongst the invaders from around the world seemingly determined to colonise the UK by out-breeding the host population.

Now we need a firm proposal to move the cost of childcare off the State and onto the feckless Fathers. Perhaps, as a first step, no benefits at all until the Father is named and identified by DNA. Not difficult - most of these absent Fathers will be on the criminal database. Then the absent Fathers can have their benefits redirected.

It is not society's duty to raise other peoples kids. We absolutely have to move to a position where people take responsibility for themselves and their actions. If we are to survive, the benefit system has to be moved to a position where it is not aspired to, where it does not act as a magnet to the worlds economic migrants and where it is not a Family lifestyle choice.

Whig

@DavidLindsay - none of those things should be in the hands of government. It is the existence of a vast and overbearing state which creates the need for the vast majority to depend on the state in such a way. It also creates a vested interest in preserving a large state - which is the justification for universal benefits as it happens.

Richard

I am all for benefit reform but this ham fisted idea and anomaly creating implementation plan has just alienated a lot of people - go and read mumsnet if you want to see how many middle England voters this has cost the Tories. Like it or not, these people decide the outcome of elections.

John Bracewell

There must be a lot of sad people about, a higher rate tax payer who cannot manage on a salary of £44,000+ is just one example. They are probably the people who overextended themselves in the high mortgage and high credit era of the Brown Chancellor/PM period. The argument that 2 people earning £43,000 each and keeping Child Benefit is a red herring, not many of them for a start and it is just envy on the part of those just over the tax rate limit. It does not alter the statement that higher rate tax payers should not be paid child benefits.

alexsandr

Jannie Geldenhuys @ October 4th, 2010 8:11pm
Dead right Jannie. And rolling NI into income tax would stop the fraud where people take income as dividends instead of pay, avoiding NI.
Do it 1% a year. I bet your rise in income tax basic rate would not need to be as big as the cut in NI too.
Hmmm. but how to you do the jobs tax line employers NI???

ChildFree

@Bracewell
'...The argument that 2 people earning £43,000 each and keeping Child Benefit is a red herring..' no....no it isn't if your message is that everyone has to do their bit and that the promise of fairness is a guiding principle for those planning and implementing cuts.
One house earning 80.000 gets it, but next door earning 45 doesn't, and you think this doesn't figure in people's perception of the integrity/validity of what wholesale benefit reform might bring? Or how much trust they will place in the Coalition?

Boudicca

Osborne should have first withdrawn the right to Child Benefit for immigrants. Why should people turn up here and immediately qualify for a benefit when they have paid nothing into the system. I object to taxpayers money going to fund Child Benefit for immigrants children living here or those they claim are at home when our own people are being told they will lose the benefit because we cannot afford it.

The EU should be told to mind its own business ... it is time to put British interests first.