05 October 2010

Are you really that pissed off?

The media are having great fun with this child benefit cut

The lefties naturally oppose any cut (despite it being against high earners...) and the Mail who usually rail against benefits, despise the cutting of middle-class benefits - so nobody's happy

But I have to ask - is it really that bad?

The Tories, and many supporters, will admit it's ridiculous to pay the wealthiest people (e.g. David Cameron, who can claim £2,500 if he chooses) benefits - and I point to the decent tax breaks in their stead being a far more sensible option than taxing and repaying the middle classes

So why is twenty quid a week so important? Everyone, including families (particularly at the bottom), will have gained hundreds in tax breaks by 2013, so what if we cut off the top 15% from a fairly minor benefit?

We have a huge welfare bill, and a small chop from those who can probably afford it, seems very reasonable to me

There are some notable problems, I admit - the main one being that a family can earn 35 grand twice and keep it, while a sole earner on 50 cannot, thus penalising stay-at-home-mother families

However, how many are being hit by this 'rough justice' as Philip Hammond put it? As he pointed out - the median earnings for a couple both under 44 grand is only 46, while sole earners were in the seventies

In short, just how many people are at the bottom end of this scale - i.e. sole income families earning around 45k? The stats show that the very few people who do live off one wage these days need a little bit more than the higher rate threshold anyway - you will always find people who do exceedingly well from a situation, and those who get caught out quite badly - that's the Mail's job

But as long as it remains a few this is a rather painless cut to the vast majority of people, and is highly unlikely to put anyone into poverty, if it does, I apologise, but I'll take the risk

I agree it's in principle unfair, and a few will benefit to the detriment of others - but the fact is the PAYE system is much, much easier to base this on than means testing all claimants, and therefore more cost-effective - I challenge you to work out a simple way of cutting an unnecessary benefit while keeping it totally fair

I agree it is against traditional Tory principles, they support stay at home mothers, but that's their problem, not mine, I think that's a more philosophical debate for them, for the rest of us however, it will have a tiny impact on families who can largely afford it

Likewise, the 'universality' line they used in the election is going to come back and bite them, because it is a break - they can claim they didn't win the election but who seriously believes this one was caused by the Liberals? They should be cutting extravagant benefits anyway - get some balls, and don't lie in your manifesto (it's not technically lying if you don't win...)

It's a few grand (tops), to those who are paying higher rate tax - I bloody wish I was paying higher rate tax...

Also, I must take issue with the man in the Newsnight crowd who claimed it went against aspirational values - i.e. people wouldn't aspire to earn 44k because they might lose a benefit of 20 quid a week

Does he not understand maths? If they are aspirational, all they have to aspire to is 47k before they wipe out the perceived loss (dependent on number of kids) and they are back in 'aspiring' territory - do people just get to the threshold and sit there forever more?

With the increase in the tax threshold and allowances we are getting a good deal for losing a bit at the top end - it's unlikely people are going to be worse off in general when you look at the overall picture of taxation, so I think this is a perfectly fair, and rational, decision

In my mind (though I doubt anyone else's), surely the Lib Dems are doing well here - without them we wouldn't have got the big increases in the allowance, and with them this wouldn't have been cut - I doubt anyone will note that they're the ones with the popular policies, however

Also this 'no families on more than 26k of benefits' needs some fleshing out - is that 'every' benefit? And how do you keep tabs on all the various payments made?

I agree it needs doing (and frankly 26k is too high), but it's going to be bloody difficult when you consider housing costs in certain areas (as Nick Robinson points out)

But this is way more fun than the sodding Labour soap opera

Update: The BBC are using 'human' stories from the people to point out the flaws (which are obvious)

'Trisha' from Hertfordshire claimed it was the only income she gets - right, besides the 44k+ that you get from your husband/partner?

Let's break that down - you are 'earning' £20 or £34 (average number of kids is two) a week, this is what? Spending money? That's not even a weekly grocery shop! Meanwhile, post tax your family earns roughly £610 a week minimum - otherwise equivalent to £2,500 a month against £130 (and that's minimum)

In no one's world is this your sole income, it's nice to get money but do you really need it? I am working on highly conservative estimates here, and while all cash is nice it is not an 'income' - it's a small supplement

Is Trisha's hubby getting 45k? Or is he getting more, like, say an MP? (I'd be interested to know where we draw the 'fair' line) And by 2013 will her kids be at school and will she be able to balance her budget so that this two grand a year fall in revenue can be expected, seeing as it's announced nearly three years in advance

Get a grip, people

1 comment:

  1. indeed middle class can be a lot less than 44k - we're only looking at the top 15% here, so obviously I would say it hits middle classes - but not the vast majority

    I think it's more dependant on state of mind and aspiration than the amount of cash you earn or even job you do these days, and of course, your age - if I had kids our combined income would be pretty low (under 50k) but we're still middle class!

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