Fraser Nelson Fraser Nelson

Osborne can go even further on middle-class benefits

George Osborne had been expected to subject child benefits to tax. Instead he is to abolish them entirely for higher-rate taxpayers. I’ve spent this morning talking to friends, whose judgment I respect, who are furious about Cameron hitting the squeezed middle. I cannot agree, and here’s why. We are not talking about the “squeezed middle” here – of the 30.5 million income tax payers in Britain, just 3 million pay the top rate of tax (figures here). They’re the best-paid 10 percent – and I have never worked out why the tax of the average worker (who’s on £22k) should be higher to afford the payment to those on twice as much money. Osborne reckons he will save £1 billion by this measure. If there are to be cuts, this strikes me as a fair cut.

Indeed, why stop there? Winter fuel payments should be next: this is a misnomer, a New Labour scam hurriedly assembled to try and buy votes to recover from pensioners. So-called Winter Fuel payments are sent before Christmas, long before the winter fuel bill arrives. They are sent to expats in the Costa de Sol, and – as Policy Exchange’s Robert McIlveen pointed out on Coffee House – 82 percent of Winter Fuel payments go to people who are not in fuel poverty. There is a fortune to be saved here, and the money could be diverted into a system that can reduce one of the most under-reported scandals in Britain: that each winter at least 22,000 pensioners die of the cold. (Imagine the outcry if a tenth of this number died due to a cause that could be related to global warming).

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