Tuesday, 5 October 2010

Child benefit cut, bankers bonuses rise

Two weeks ago, the Liberal Democrat conference voted to “Safeguard universal child benefit in conjunction with progressive taxation in order to provide a reliable source of income protection throughout childhood.”

But, as we all know by now, the Lib Dems are only useful for keeping Tories in power, and this week the Tory conference was told that child benefit would be withdrawn for any family where a parent was paying higher rate tax.

The Tory plans are full of holes. A single parent earning £44,000 will lose child benefit, but a couple earning £43,000 each will keep it. More than a million families will lose out.

But there is a bigger principle at stake. By focussing on the issue of child benefit being paid to better-off families, the Tories are looking for an easy target. It seems illogical to pay benefits to some people who clearly don’t need it. The evidence shows, however, that universal benefits are extremely successful, and child benefit is one of the most successful of all.

As Kate Green, Director of the Child Poverty Action Group, said last year: “Simple, straightforward and easy to claim, child benefit reaches more children living in low-income families than any of the complex means-tested benefits or tax credits intended for them. With a take-up rate of 98%, it provides financial security in households that are struggling to keep afloat.”

When everyone gets child benefit, everyone has a stake in seeing it continue. If it becomes a benefit only for the poorest, it won’t be long before the Daily Mail is talking of ‘child benefit scroungers’ and calling for more cuts.  As a universal benefit, it delivers support to children efficiently and effectively. 

The Tories say they can “no longer defend paying out £1bn a year to better-off families”. But at the same time, as the Independent reports, cash bonuses to bankers will reach £7bn in this year alone. If the Tories were genuinely interested in 'sharing the burden', they could start with the bankers. This attack on child benefit is just another part of the ideological drive to roll back support for the welfare state. 

(For another look at whether the cuts are a necessity or ideologically-inspired, see this video by Guardian journalist, John Harris at Sunday’s demonstration outside the Tory conference.)