Last night, one minister came up to me nervously and asked, ‘is this our 10p tax moment?’ He was talking, obviously, about the decision to take child benefit away from households with a higher rate taxpayer in them.
My answer was no. The comparisons with Brown’s removal of the 10p tax rate miss a crucial point: Brown tried to hide what he was doing. In his final Budget statement to the Commons, the abolition of the 10p rate wasn’t even mentioned. Instead Brown boasted about a 2p reduction in the basic rate, to huge cheers from the Labour benches.
By contrast, the Tories have been upfront about the fact that there are losers from this change. There’s been no attempt to cover that up which is why the outcry started straight after the speech.
I still think that taking child benefit away from households with a higher rate tax payer in it is sensible; I also bet that there’ll be a whole slew of others cuts that will cause more outrage. From the point of view of the right, I also think this beachhead against universality is potentially transformative.