Cameron should leave this terrible 'tax breaks for cleaners' idea in Sweden
Melanie McDonagh 12:33pm
There are times when you think, really, the Prime Minister should get out less. The good
ideas he comes back with when he goes abroad are fine and dandy — of which, more later — but the bad ones are very bad indeed. One notion he is considering just now after attending a
Nordic-Baltic summit is the Swedish/Finnish one of giving people who employ domestic help tax relief on half of the cost. On the plus side, you get more women in the workplace, by allowing them to
subcontract the domestic drudgery, and you shift thousands of workers, mostly female, from the black economy to the respectable economy.
For the downside, I hardly know where to start. Look, of all the problem David Cameron has got, the most acute is that he looks, sounds and seems like a toff who gets to know about ordinary people's lives from his cleaners and his drivers and his friends’ cleaners and drivers (actually, I knew one newspaper editor like that). So let me spell it out: giving a tax break to people like his wife is not the way to seem less out of touch. It makes him look like a man looking after his own. It's not going to come across as a measure to help the domestics; it's going to sound and feel like something to help the middle-class women who employ them. It would be a Valentine's gift for Labour — notwithstanding the fact that every single left-leaning female pundit who opines on it will herself be employing a cleaner, probably of Polish origin, and may indeed mention as much in the course of her diatribe.
Indeed in Sweden, by all accounts — and I yield to the editor of the Spectator on this one — the measure has its critics. They say it benefits the high earners more than the lower paid on the employers' side and it benefits migrant workers more than locals when it comes to the employees. And the same would be true in spades here — if you know an English cleaning lady, you probably don't live in London
That out-of-touchness is, I’d say, at the root of an awful lot of Tory problems. It’s how they ended up taking child benefit away from higher rate taxpayers. I can only fancy that the Chancellor had his ear bent by umpteen trust-fund wives, who told him how ridiculous it was that they were being paid child benefit. I know I’ve heard that one from the wealthy again and again. Trouble is, by listening to the upper ten thousand, you lose track of the fact that it’s actually rather a good benefit for many more people who are only just in the higher tax band but whose pips are being well and truly squeezed by rising inflation, the inexorable fact that children get dearer as they get older, and, quite possibly high levels of personal debt — all right, that last one may be just me. Being a universal benefit meant that it didn’t bring in its wake an army of means testers; it was yours of right.
And that’s the other thing that’s wrong with this attempt to use the tax system to get women back to work. The tax system should, I’d say, discriminate in favour of marriage but it should not be used to favour those who work outside the home as against those who work in it, bringing up children and cleaning up after them. A universal benefit doesn't do that; it’s yours whether you farm your children out or mind them yourself. And giving tax breaks for domestics goes against another erstwhile Tory ambition, which is to simplify the tax system, not render it more complicated.
Which brings me back to one of the Swedish ideas the Prime Minister should have brought back home with him: that of his fellow Conservative (or, rather, ‘Moderate’), the Swedish premier Frederik Reinfeldt, who transformed his country's economic prospects by cutting taxes for the working poor. Cutting taxes, and letting people spend their money how they want — rather than nudging them in the direction of employing domestics — is, I’d say, a profoundly conservative way to go.
Previous
Slim Jim
February 10th, 2012 12:44pm Report this commentMelanie, I wholeheartedly agree with your last paragraph. The rest of your article can be summed up thus: what feckin' planet are these people from?
startledcod
February 10th, 2012 12:45pm Report this commentWhilst I agree with much of what you write I think you are rather trying to have your cake and eat it. One way, if not the very best way, to have the wherewithal to cut taxes is to stop spending money and what simpler way than to stop paying universale benefits. Don't take the tax, don't pay the benefit.
Heartless C.
February 10th, 2012 12:48pm Report this commentThanks Melanie. You put the words together so sweetly. Many people, myself included, might use stronger language.
Barry Williams
February 10th, 2012 12:50pm Report this commentYes I have an English cleaning lady and, yes, I do not live in London. There is a big big world outside London. Neither am I a rich toff and to suggest they are all that would benefit is rubbish. Many ordinary people pay for a 'daily' or in my case a 'weekly' I also have another lady who does my ironing too.... Being self-employed I can pay for help in the office and get it down as business expenses so why not by providing someone a domestic job should I not get tax relief? It makes sense.
Heartless C.
February 10th, 2012 12:52pm Report this commentPS - Melanie, - yes indeed, thank you for the mention of low tax.
Typically, the one useful thing that the H2B might have brought back is ignored - in favour of ridiculous nonsense.
Hugh
February 10th, 2012 12:52pm Report this commentKeep Child Benefit universal, simple and cheap to administer. That is the Conservative way and keeps the Mums onside. The other way is the Gordon Brown way.
Raise the Tax Free allowance, that also improves simplicity by getting more people out of the tax net. That paradoxically is the LibDem way, although it is really the Tory way. Once again that is not the Gordon Brown way. Once again not half clever and complicated enough for him.
Rosa
February 10th, 2012 12:59pm Report this commentSuperb ,Melanie- you should be prime minister. I do have an English cleaning lady as it happens, a Londoner who moved out because she could not stand seeing houses being allocated to people who had just arrived from abroad....
Hugh
February 10th, 2012 1:02pm Report this commentOh yes and tax deductions for domestic wages against income Taxed under PAYE. A no brainer.
The marginal cost of childcare/domestic help to highly educated girls like my daughters in law and daughter working three or four days a week in London is crippling. The long term benefit to the exchequer of keeping their careers going while they struggle with small children will be worth many thousands a year each if they can be motivated to keep their careers turning slowly. At the key times when they need support the net income they get is not a great incentive to work though. What price fairness.
Richard
February 10th, 2012 1:03pm Report this commentJealous Melanie?
So what if it benefits the high earners more than the lower paid? Makes a change for once, and why shouldn't the well off have some benefits... else what is the point in working hard to improve your lot?
FYI I'm very much a middle earner.
MilkSnatcher
February 10th, 2012 1:24pm Report this commentAnd there you have the problem with the British economy in a nutshell: policy is driven by how it "looks" for some politician, not by whether it is a good idea or not.
Who says this policy and cutting taxes for the working poor are mutually exclusive?
Why does the fact that it may confer a benefit on the middle class automatically consign it to the rubbish bin?
Does every policy have to exclude the middle classes from any benefit because we are in austere times?
Has anyone calculated the amount of black economy tax loss this may reduce?
So what if migrant workers benefit? Is the Nick you're agreeing with actually Nick Griffin?
Hair shirt politics = weather-vane policy, weak Government, and recession.
M. Rowley
February 10th, 2012 1:30pm Report this commentIt's hard not to conclude that the man is simply a congenital idiot.
Ian
February 10th, 2012 1:43pm Report this commentI think you are choosing to miss the point. Maybe that is because you employ a cash in hand cleaner yourself for £8 an hour. Allow me to compare such a cleaner with a legal cleaning service that deducts PAYE and national insurance, pays holiday pay and provides equipment and products (to comply with health and safety law) and pays its VAT liability.
Such a service would cost double your £8.00 and hour to provide. At present the government does nothing to prevent this injustice and yet claims that 'it looks after the businesses that play by the rules'.
This issue is a black and white issue between right and wrong. I hope your self serving presumptions fool nobody.
Mirtha Tidville
February 10th, 2012 1:51pm Report this commentI dont know about leaving this idea in Sweden..I wish he`d leave himself there as well
Magnolia
February 10th, 2012 1:52pm Report this commentWho pays?
At the moment single income families pay an extra one months income in tax and NI compared to the same income dual wage family. This is so even at average income levels.
Are they to pay even more for others work related expenses?
Social engineering of the vilest form.
Kennybhoy
February 10th, 2012 2:14pm Report this commentMiddle class welfare dependency...
Frank P
February 10th, 2012 2:30pm Report this commentM Rowley
Very hard indeed! He also looks as though a bit of the ol' Swedish would perk him up
a little. Shcwisshh ... shcwhwackk!
Not that it's done much for the 'editor'.
Right On
February 10th, 2012 2:47pm Report this commentYou have the love a line of thought that suggests this is a bad idea cause it makes Cameron seem out of touch. No - it' s a bad idea because using the tax system in this way is insipid and creates far more problems than it fixes.
Lower, flatter rates - it's really not that difficult.
Scary Biscuits
February 10th, 2012 3:22pm Report this commentWe should stop using taxes to try to influence behaviour (by distorting the market). We should use taxes purely to raise money as simply as possible and as little as possible.
People can then be free sort out their own domestic arrangements.
Barbara
February 10th, 2012 4:01pm Report this commentI don't think we should be paying women to have children we are over populated in this country. It was devised after the war. I believe we should only pay for the first three children anymore after that should be kept by the parents. Its a personal choice to have children. This would in effect, give the child benefit to all, and would make top and bottom claimants have a fair go at the benefit. Why should those who don't have children be forced to support those who do? The population is bursting at the seams and paying women to have children is getting out of hand, it might make them rethink what they do, the rich can afford to keep them, the poor could seek childbirth control. In many areas it is sorely needed.
Peewit
February 10th, 2012 4:51pm Report this commentHe and his bunch of metropolitan 'advisors' just don't get it.
Single income families are being harried at every turn.My wife wants to bring up our children, not outsource it to tax assisted foreigners. So I earn as much as I can in order to enable that. Our reward? Removal of child benefit so that we can carry on giving it to 28000 Poles in Poland and the cash in hand crew.
Rabyrover
February 10th, 2012 5:23pm Report this commentMelanie is spot on. Cameron should be appealing to the millions, not a hundred thousand or so fellow toffs. Raising the threshold to £10k would benefit all tax payers, while transferring allowances between husband and wife would put us on a par with almost every other country
2trueblue
February 10th, 2012 5:45pm Report this commentDefinitely not a good idea. Why make our tax system even more complicated than it already is. We need to try and make it simpler and therefore cheaper to collect.
I can not understand why we pay childrens allowance for children who do not live full time in this country. Our system is far too complicated, open to abuse, and too expensive to collect as it is.
Magnolia
February 10th, 2012 5:53pm Report this commentRabyrover, "raising the threshold to £10,000 would benefit all taxpayers"
Not true.
>£100K loose all their tax free allowance which has the effect of pushing the income tax bands right down by the amount of the threshold. They are admittedly well off, but it is the single income families who loose the most at this point because the dual wage family on £100K will have two tax free allowances between them.
daniel maris
February 10th, 2012 6:16pm Report this commentExcellent - glad you have blown out of the water James Forsyth's absurd enthusiasm for yet another p-poor idea.
WIlliam Blakes Ghost
February 10th, 2012 6:17pm Report this commentToffs?
Since when did the Spectator start pandering to the class bigotry of large parts of the Westminster Freakshow?
Hell anything you can say about Cameron on such matters you can equally falsely be said Boris and a good many others (and not just those in the Conservative Party ~ Clegg, Huhne, Balls, Harman).
Such left wing propaganda should be left on the toilet door and treated as the brown smear it is!
plumedhat
February 10th, 2012 6:49pm Report this commentIf a small business can offset employment costs against tax for obvious reasons, then why not a family business - which is what a working husband and wife are?
The trouble is that 70% of the population lives off the minority 30%, through the tax system. The majority think that this entitlement, which most undeservedly enjoy, should be accompanied by making life for the minority who actually contribute as hellish as possible.
Sylva Ngen
February 10th, 2012 7:13pm Report this commentWhat about BIG SOCIETY Mr. Cameron!!!!!!!
The more he tries to copy or create anything, the more he looks like a joke.
Dimoto
February 10th, 2012 8:02pm Report this commentThe £10K threshold target is an interesting one.
Recently, I've taken to asking several <£20k earners what they think of the increasing threshold, thus increasing take-home.
To a man/woman, they have noticed no change and simply don't understand their tax statements (one of the glories of PAYE), and are unaware that their tax has reduced.
They only look at the bottom (net)line.
If anyone in the coalition is really expecting an "electoral dividend" from this, (Clegg), they can forget it.
Maybe the beneficiaries should be sent a cheque or notes in the post, with a message: "this money is for you with love from the LibDems" ?
Herbert Thornton
February 11th, 2012 2:58am Report this commentI sense here a whiff of Cameron wanting to do something that a fair number of voters will like, but that, at the same time quietly helps to preserve the class system that likes to distinguish between 'downstairs' people and those who consider themselves to be 'upstairs'.
Roue le Jour
February 11th, 2012 6:57am Report this commentIt is socialist policy that citizens will only be employed by state approved employers, not by each other.
Try again, comrade.
Widmerpool
February 11th, 2012 8:27am Report this commentWasn’t it Sweden that had to drop the Tobin Tax? A lesson to be learnt here?
Taxes and for that matter Higher Education should not be used for Social Engineering Experiments.
Taxation policy should be driven by effective revenue generation only IMHO and not pander to various strains of the “English Disease” like the Politics of Envy.
Boudicca
February 11th, 2012 10:00am Report this commentThe Conservative Party slogan at the next General Election should be:
"The Conservatives: Out of touch and divorced from reality"
Carl Bröms
February 11th, 2012 10:44am Report this commentSaw this article by incident and said to myself: bet that the swedish PM has got his name misspelled (as usual. Aaand yepp ! "Frederik". Letīs see what ideas Mr Kamerun brings home from Denmark !
Anne Wotana Kaye 1
February 11th, 2012 11:36am Report this commentI'm thinking of employing a butler, a valet and a lady's maid. What are the benefits?
Anne Wotana Kaye 1
February 11th, 2012 11:46am Report this commentBarbara
February 10th, 2012 4:01pm
By all means restrict the amount paid, to nil, for children of non-British born residents. The maternity hospitals are filled with immigrant and illegals who are spawning non-stop, whilst the natives of this country are declining drastically.
Robbo
February 11th, 2012 1:59pm Report this commentIf I wnat to pay my cleaner one pound net, today I have to pay them c 1.40 and to be paod that I have to earn 2.80 that is crazy and surely reduces opportunities for cleaners to find paid work.
Rue de la Loi
February 12th, 2012 9:45pm Report this commentA typical knee-jerk reaction to today's "news grid" rather than any real analysis. Had Miss MacDonagh bothered to do any research before scribbling this down, she would have found that the tax deductibility of domestic services is quite widespread in Europe. France, not normally considered a testbed for Conservative thinking, allows childcare costs to be deducted from tax and in Belgium, in an effort to rein in the near Greek levels of tax evasion, domestic services can be obtained through "titres-services" that bring cleaners etc into the tax net as employees of cleaning service companies, the higher costs this entails being offset by the tax break.
The ten thousand at the top railed against above are likely to be far better informed about the world at large than the chippy instincts on display above.
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