Cutting Child Benefit – A Progressive Case for the Defence

15th March, 2012 1:19 pm

There were many reasons to commend the Labour Pre-Budget  Press Conference on Monday.  Good attack lines against the government on the 50p rate, a restatement of a costed five point plan to drive growth in the economy and a new pledge to cut higher rate pension tax relief and use the proceeds to reinstate a number of tax credits.

The overarching strategy looks appealing; identify modest tax rises on the wealthiest and use the proceeds to help provide support to some of the groups most gravely affected by the financial crisis.  All of this ties neatly to the pitch of delivering, ‘fairness in tough times’ and deserves to be applauded.

The problem for the party is that this is the easy part.  The 50p tax rate and pension tax relief are easy targets; if we are serious about an economic strategy that is redistributive, we need to make some difficult choices about the spending priorities of a future Labour administration.

This leads me to child benefit, the £2.4 billion elephant in the room at the Press Conference on Monday.

Ed Balls didn’t duck the question entirely, saying that Labour wants the government to conduct an ‘urgent review’ into the policy to remove child benefit from higher rate tax payers.  He condemned the Coalition for an ‘unfair policy’ that will see  a two earner family earn up to £84,000 and retain their child benefit while a family with a single income of £43,000 would lose their benefit entirely.

My charge is simple, what is truly unfair is that taxpayers across the income spectrum contribute £2.4 billion a year so the state can provide child benefit  to higher rate taxpayers.  A generous subsidy for the most affluent 15% of families, at a time when the government is presiding over an austerity programme that is undeniably hitting the poorest the hardest.

I fully appreciate that a family in the South East of England with three children, a mortgage and a single income of around £45,000 are not ‘rich’ and we should not take lightly a decision to remove a valued benefit from this cohort of people.  However, the reality is that this family would be better off than 8 out of every 10 in the UK and are relatively better placed to withstand the loss of child benefit.

If we are serious about delivering fairness in tough times, calling for an ‘urgent review’ into child benefit is not good enough.  Labour should make the progressive case for a permanent end to child benefit for higher rate tax payers, and support Osborne’s original plan.  The one qualification I’d be happy to accept is a degree of tapering, so that people don’t go from receiving full child benefit at £42,000 and nothing at £43,000.  I’d rather it were phased out gradually from £35,000 to zero at £43,000.

Once achieved, removing child benefit from high earners hands £2.4 billion back to the Exchequer every year; money that could be used for a host of progressive causes.  Where to prioritise an extra £2.4 billion per annum is worthy of another blog entirely, but I will sign off with one suggestion – lifting the 1% pay cap on public sector workers earning less than £42,000 a year.

At a stroke, Labour would move from defending a costly subsidy for higher rate taxpayers, to being the only party to oppose a real terms pay cut for frontline teachers, police officers and nurses.

That is what I call ‘fairness in tough times’.

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  • GuyM

    You say cutting higher rate tax relief on pensions is an “easy answer”.

    As already of a majority are not investing in pension planning and pension schemes are underfunded significantly still, how do you see thing working out if you reduce the incentive of 40% tax payers to invest into funds that support lower paid workers?

    As it stands now, I am very dubious about my pension contributions. If my relief is cut to 20% then I intend to stop all contributions and invest in other areas. There is no point putting money for 40 years into something that returns so badly and is so open to raids by politicians (Brown).

    With ISAs, investment fund, equities etc. I may not get a 20% relief but I do get full control over my savings and they are not in funds that can be abused by government with no recourse for me to pull out my investment into them.

    • derek

      But it’s not really your money Guy? it belongs to the taxman, well a large proportion does and it has a better purpose if distributed to the poor. It is time to forget about relief. Your country needs more of your cash through tax, Inheritance, Land, house and direct including direct pension tax on the larger wage brackets.

      • Hugh

        Well, no, until the law changes it doesn’t belong to the tax man. Unless you want to say that your home, all your possessions and all your money belong to the taxman too on the basis that he may at some stage be given the power to require them.

        • derek

          There is rough;y 29.4 million workers earning in Britain of those 1% earn above the 150,000 mark and pay the 50% tax rate on earnings over the 150,000 mark, I’m suggesting a further tax of something in the region of 65% on those above 150,000 and shining a torch on those on a level above the 50,000 bracket, plus closing the loops holes that allow tax avoidance, while taxing land and inheritance and pensions above 26,000 per ann.

          If we want a world class education system and a fairer society that has utilities for all then the universal system of tax must reflect a fairer deal.

          Hugh, a tax less society created massive boom and bust and 3 million unemployed. I ‘ve no idea why some would want to inflict that ideology on others?

          • Hugh

            “Hugh, a tax less society created massive boom and bust and 3 million unemployed.”

            No, it didn’t.

          • derek

            O’ yes it did! 135 billion has been taken out the economy because unemployment is at a record number, cutting tax and investment in people leads to boom and bust, lack of demand raises inflation, inflation bursts industry, closures and redundancies.

          • Hugh

            Could you point me to any evidence at all that taxation at 40% of GDP (1970s levels) rather than 37.5% (2007) would have prevented the financial crisis and subsequent problems.

            Low taxation did not cause the credit crisis.

          • derek

            Collecting tax avoidance and implementing a fairer taxation in general coupled with creating employment will reduce the financial pressure. but of course tories don’t do fairness and have spent 158billion to implement a deeper recession, wow! that worse than a busted flush!

          • Hugh

             I’m not entirely sure what the academic basis for arguing that higher taxes boost employment is, but I suspect it’s thin.

            Furthermore, since you consistently seem to be of the school of though that the size of the deficit doesn’t really matter, why bother increasing taxation at all?

          • derek

            Hugh, if you take out tax payers, like the miners, steel workers and engineering industry, then your removing a large sum of tax collections..evidence, 1984 onward!

            Cutting welfare and child benefit, is removing more cash from society resulting in less monies being spent and reducing demand which has a direct effect on industry.

            The deficit wasn’t an excuse to create hardship by design?

          • Hugh

             Actually the IFS calculates that the deficit would be higher under Labour’s plans, so your first paragraph doesn’t hold water.

            “Cutting welfare and child benefit, is removing more cash from society”

            Well, no, since they’re both paid for by society. But I’m not sure how that addresses my original point – as you suggest, the deficit is just an “excuse” not a genuine problem so why exactly need we raise taxes to address it?

          • Peter Barnard

            @ Hugh,
            “ … taxation at 40% of GDP (1970s levels) … “
            Hold on a minute, there :
            Taxation as a percentage of GDP :
            1970/71 : 36.3
            1971/72 : 35.0
            1972/73 : 32.6
            1973/74 : 31.9
            1974/75 : 34.5
            1975/76 : 35.3
            1976/77 : 35.1
            1977/78 : 34.1
            1978/79 : 33.1
            (Source : Table C15, Budget June 2010)
            In fifteen of the following eighteen Conservative so-called “tax cutting” years, net taxes and NI contributions were higher than the inherited 33.1 per cent of GDP (see same Table C15).

          • Hugh
          • Peter Barnard

            @ Hugh,

             Sloppy reporting by the Grauniad ;  they are showing total receipts, which then included such items as nationalised industries operating surpluses, council house rents, Post Office profits and I don’t know what else.

            As I say, the authority is in Table C15.

          • Hugh

            Actually could you also point me to teh economic backing for the statement “lack of demand raises inflation”.

            And could you tell me the likely impact of QE, which you favour?

      • GuyM

        None of the money “belongs” to the taxman Derek.

        It is taken on the basis of collective agreement in line with electorate support via elections.

        It also isn’t really my country, less so as time goes on. I feel no shared interests with, no shared values and no responsibility to vast numbers of people who notionally share my nationality. I love the land of England and dislike ever more of the parasites infesting it and expecting others to provide for them.

        Anyway all taxes are avoidable if you are intent. The simplest route os to retire abroad once you have acquired enough. Then the UK doesn’t get a penny does it, perfect.

        • derek

          You use the highways, paths and other utilities as much as anyone else, Death and Taxes! Guy the only two certainties.

          I’d rather we all had a living income that didn’t require a state top up.

          Run away all you like but one way or another a part of your income belongs to me and others, that’s a nice thought, would you agree? 

          • GuyM

            and I’d rather earn a market rate and earn more

            once I’ve retired abroad Derek, neither you nor the state get a penny of my income, however I will keep having any state pension entitlement sent through to me

            nice thought isn’t it 🙂

            also the nice thought is my daughters will have their fees paid in full for university, so they wont be taxed, when they get good jobs, to pay for others. Plus we’ll leave them a large IHT free estate

            nice thought that as well 🙂

          • derek

            Some nice thoughts, all things nice relate to us all.

            By 2013 the one benefit system becomes statute, I’d bet a penny to a rag doll there will be an offset in state pension provisions somewhere within the clause?

          • GuyM

            they can do what they like with the state pension really.

            so long as my mortgage is paid, my isas growing and my investments secure and somewhere in near 20 to 30 years there is a nice destination to go to I’ll be fine

          • derek

            ISA growing? tax avoidance again? Hmmm! I’m not getting through?

            A ticket for a destination? where? on some far foreign soil you’ll imagine an England? don’t be daft just cough up the readies and join in the song of solidarity.

          • GuyM

            tax avoidance?

            yep, pensions, expenses, ISAs, payment in share schemes and the like

            retirement abroad, caribbean if it has developed a bit in certain areas, else the US with a good yank friend and his family

          • derek

            LoL! what about that  America welcome show given too Cameron, Cameron’s ministry of funny walks and yanky doodle fine talk, No doubt he’ll start an argument before the tour is over. He fluffed Europe so much he is now trying so hard to adopt the dollar? and the all American dream. 

          • GuyM

            I think he’s done rather well in Europe and as for the US it beats desperately chasing Obama through a kitchen like a certain Labour PM.

    • Hugh

       Only 2% of pensioners are higher rate tax payers, compared with around 12% of working-age people. That means there’s a hell of a lot of people getting 40% relief on the money going in and only paying 20% when they draw it out. Meanwhile, according to HM Revenue & Customs the cost of relief has risen 87% over the past 10 years.

      Finally, the majority who are not investing in pensions are basic rate tax payers. In fact, there’s  little evidence that scrapping the upper rate tax relief would have much impact on private pension savings (and some against it), but, even if it did, since these are people who would still be unlikely to be in poverty (having saved in ISAs and so on, as you note) that’s little loss from a public policy point of view.

      Given that we do have to cut spending it is indeed an easy answer. As is scrapping child benefit for upper rate tax payers.

      • GuyM

        Then live with many higher rate taxpayers like myself and my wife opting out of pension schemes. I think you’ll find that the damage done to pension funds from the loss of income would lead to some very unpleasant results for those left in them.

        On balance of benefit there is no reason for me to contribute large sums of money into a pension fund, when the funds do not do that well in terms of investment returns and when once the money is paid in you never get to see it again.

        If a 20% relief cap means only a slight decrease in initial investment sums played off against full access and control then I’ll say no thanks to pension schemes.

        My understanding of pension funds talking to a friend who is actuary is that the 40% tax rate payers pay vital amounts into pension funds and without them many wold struggle to provide retirement benefits for low wage earners at expected levels.

        But either way I don’t really care. As I said I’m highly sceptical of pension provision, so reducing the relief to 20% does me a favour and makes my mind up for me.

        • jaime taurosangastre candelas


          with your intelligence, I am surprised that you are investing in pension funds at all, even with the tax relief schemes that as you say some criminals like Gordon Brown can legally raid.  I remove all spare money from the networked Government system and spread it around into no-tax investments that I can control, or where my control is limited such as in land purchase, spread it into different countries as a mitigation.

          As a bonus, in my 25 years of doing that, my own investments in metals, land and latterly fishing rights have outperformed any of the benchmark stock market indices.  I am teaching my daughter the same, and allowing her control over a very small portion of the total investments.  She is doing very well, although her attitude to risk scares me.  But she is only 12.

          • derek

            Excuse me but after your confession of using your child benefit to fund a private education for your children, you can’t question Gordon Brown’s intentions?

          • jaime taurosangastre candelas

            1.  It’s not funding a private education, it is an investment to offset the future costs of a state education at tertiary level.  Using tax-free money the Government insists upon giving us, despite there being no need to do so.

            2. Gordon Brown changed the law to allow him to do something that had not before been legal.  I’m not in the position of being able to change the law.

            Don’t you see the difference?

            Have you worked out the cost of child benefit paid to higher rate tax payers, per ONS statistics?  It is around £2.3 billion per year, which those most able to cope without it regard as free money.  I’d like to see that same £2.3 billion go into free school meals, learning support teachers, capital works on schools with the oldest buildings, holiday clubs in deprived areas, anything than the pockets of higher rate taxpayers.

            Sometimes, I don’t know whether you glance at a post and decide to try to be funny (which you are not, ever), or try to work out how to deliberately mis-represent the text.  Or catastrophically, both.

          • derek

            And you deliberately start from a conservative position of cuts, then when challenged, change your tact!

            All the things mentioned in your last paragraph weren’t  present in your initial post?

            I happen to support the idea of mandatory free school meals and I am more than glad to add my name to the idea of increased employment.

            I don’t think anyone in a low wage bracket is laughing about the forthcoming one universal benefit, that will heap all benefit claims into one and undermine the value of child benefit.

            I’m rather delighted your not in a position to make law, your self style bragging is annoying enough.

            I’d say that if you pay for education then that meets the merits of the private forces, unless you think otherwise. I think when you make allegation of 1.3 billion you should at least back it up with evidence, you tend to be a bit like Osborne on that front, pulling figures out of the air and expect us all to believe your dysfunctional knowledge.

            And they really want to give people like you the control of hospital budgets? now that would be catastrophic! 

          • GuyM

            “mandatory free school meals”.. yuck

            I hated school dinners, always took a sandwich box, as do my children.

            enforced one size fits all food in your crappy ideal of collective suffering is a horrible thought.

          • derek

            No reason why school food should be any different from restaurant food, vitamins, Irons and the rest of goodness supplied, i’d say it’s a snug fit for all.  

          • GuyM

            then pay restaurant prices for it

            I fail to see why I should pay for above average food for my family and also be taxed to pay for it for everyone else at school

            but hten you don’t do parental responsibility do you Derek?

            some underclass oik decides to have 5 kids and not to worry as all the rest of us can fund the little darlings to the same level we keep our own familiy at

          • derek

            I have twin 15 year old boys and I try to be responsible, I’m very supportive of them and dearly hope they reach their potential.It’s a funny thing parenting, they can teach you all sorts of things but parenting, I hope I’ve done my best in all the common sense areas and wish my children develop into good honest citizens, it’s a time thing, so I’ll watch and play my role as best as I can.

          • GuyM

            and that’s answers how?

            if i take my family to a restuarant then I pay, not everyone else.

            The same applies with school food, you can’t provide the top option for everyone collectively and not damage personal responsibility

          • GuyM

            I’m not really, only at the very lowest contribution level and mainly because it also gets me life insurance and critical illness cover. If those last two were seperate I’d junk the pension and take those benefits seperately.

        • Hugh

           “Then live with many higher rate taxpayers like myself and my wife opting out of pension schemes.”

          Since pension schemes in future will all be DC anyway that won’t be terribly hard. There is no cross subsidisation in such schemes. As I said above, upper rate tax payers threatening to opt out of a money purchase scheme is no threat at all from the point of view of public finances.

          Your actuary friend is talking about final salary schemes which have no future anyway. Ninety percent are closed to new entrants and 40% are closed to future accrual. If you are still in one even with the removal of upper rate tax relief you would be extremely foolish to opt out.

          • GuyM

            Actually my actuary friend was talking about all pension provision. His view was that more and more people would decide a pension wasn’t worth the effort and rely on state support in their old age. This in his view was a ticking time bomb as bad as provision of care for the elderly.

            So the more pension schemes are laid to waste, the more instances you’ll get of 20% tax payer paying in for life only to find he/she gets a tiny amount at the end of it.

            In the end the government will pay, either now through incentives to invest, or later with state benefits.

            As to myself I’m mulling over moving to an NHS role, if I do I’m almost certainly going to opt out of the NHS pension scheme. I suspect I’ll divert the savings into faster mortage payments and investment funds, with the intention of retiring abroad to somewhere with lower cost of living and lower taxes.

          • Hugh

             I’m sorry, but whether or not there are 10 or 10,000 higher rate tax payers alongside your 20% taxpayer in the scheme makes absolutely no difference to what he will get out from a defined contribution pension: the amount is determined by his contributions and the employers’ on his behalf and the investment performance of whatever funds he opts for.

            You can’t lay a DC scheme to waste as you can a DB  by removing a section of the workforce, because there’s no guaranteed income. It’s just hundreds or thousands of individual saving pots each with an individual members’ name on it. Remove higher rate tax payers and you simply make it more affordable for the company because it doesn’t have to pay their contributions anymore. The 20% taxpayer will end up with exactly the same retirement income whether they stay in or out.

            The inadequacy of most DC schemes is a time bomb – for those who aren’t saving enough. They’re not higher rate tax payers by and large – which is why you’ll find pensions experts who are most vocal about the problem, such as Ros Altman and Michael Johnson, nevertheless supporting removing upper rate relief.

          • Hugh

            Incidentally, while paying down your mortgage first might make sense, the only sensible reason to opt out of the NHS scheme would be if you don’t believe it will remain a DB scheme, which it currently is.

          • GuyM

            Actually I’d opt out of the NHS scheme partly because I don’t trust any government to manage it.

            Nor do I want to push ever increasing contributions into state schemes never to be able to see the money again.

            I’d rather bet on my ability to better use my investments than leave it to the state to manage.

  • Brumanuensis

    Oh God, here we go again.

    The continuing ability of some people on the left – Jackie Ashley and Polly Toynbee spring to mind – to play into the hands of the Tories by effectively proposing the destruction of the principle of social insurance, never fails to depress me.
    Truer words were never spoken about public services than Richard Titmuss’ famous ‘services for the poor will always be poor services’. Similarly, ‘welfare for the poor will always be poor welfare’. The Fabian Society have done research on this and have fairly conclusively demonstrated that means-testing, in the medium to long-term, harms the poor by creating a less generous, increasingly mean-spirited system of public provision. Universal social insurance creates a strong, broad-based coalition in favour of public assistance. Compare the fates of the NHS and social housing to see how this works. This is precisely why the Right seeks to destroy universal benefits. Not because they are costly, but because they are popular and work against their vision of welfare as a meagre, threadbare ‘safety net’ for the very poor.

    Add onto this the fact that means-testing is inefficient – compare tax credit take-up amongst eligible persons, vs child benefit take up – stigmatising to lower-income households and liable to create poverty traps – the ridiculous structuring of our tax credits system is a case in point, and you have as clear a case for universalism as you’ll ever find.

    What we need is less means-testing, across the welfare state, and more universal provision. In pensions, by merging pension credit into the the existing state pension. By tying benefits closer to earnings and extending the insurance principle more broadly through the idea of National Salary Insurance. That’s the real ‘something for something’ principle and child benefit embodies it.

    Sacrificing this would be an act of near-criminal folly. The road to hell is paved with good intentions indeed.

    • Brumanuensis

      Not to forget that means-testing mechanisms are wasteful. The alleged £2.4 billion would be nothing of the sort and the scope for evasion is immense.

      • Mike Slater

         Not forgetting that taking tax from people, to pay back to people who don’t really need it, is awfully wasteful in itself.

        Tax credits are also extremely wasteful but they  do have one massive benfit for the left: It crates a massive group of people, dependent upon the state for handouts, who can be manipulated for whatever social experiments the left wish to launch next.

        • derek

          Harold Wilson, wanted to create hi-tech employment with high earnings yonks ago, conservative minded people halted that.

          IDS, say’s work should pay? however he is reducing tax credit for those working 16 hours a week, making them 2,500 worse off a year.

          Mr Slater unless we pay a fair days wage for a fair days work, then we will continue to fart against thunder.

  • Cravensmythe

    This toughness with fairness rhetoric only works if you also implement the fairness part of the statement. Transferable allowances would fix most of the issues including the child benefit proposal and give families a real choice on how to organise their lives and finances.

  • madasafish

    Anyone who thinks taxing people so they pay more than 60% of their earned income in tax – before they spend a penny – is going back to the policies of “tax the rich till the pips squeak”. That was Dennis Healey ‘s policy – a disaster of a Chancellor of the Exchequer.

    To avoid the mistakes of the future, it is important to know and learn from the mistakes of the past.

    I commend the history of the 1970s to  the writer since the policies invoked are basically those from that era.. And disastrous they were for the economy too.

    • derek

      Hmmm! Unemployment was 
      1,023,583 in the 1970’s it’s highest level since the 1930 but nothing like the 1980’s figures nor those of today. Tax was 38 pence in the pound in the 1970’s and we didn’t have PFI nor PPP.

      If you think the 2012 figures are better than those of the 1970’s your not reading history right? 

      • madasafish

        I said: ” I commend the history of the 1970s to  the writer since the policies invoked are basically those from that era.”

        Derek said: “Tax was 38 pence in the pound in the 1970’s and we didn’t have PFI nor PPP.”

        As I was specifically talking about taxing higher earners, to quote 38% is either disingenuous or ignorant.

         I quote Wikipedia:
        “In 1974 the top-rate of income tax increased to its highest rate since the war, 83%. This applied to incomes over £20,000 (£155,247 as of 2012),[2], and combined with a 15% surcharge on ‘un-earned’ income (investments and dividends) could add to a 98% marginal rate of personal income tax“..

        Perhaps a little history lesson is needed?  🙂

        Thanks Derek: you have basically confirmed my comments…

        • derek

          Piffle, you fail to mention the rate of net earnings before the gross tax was applied? surely your not suggesting that an income of 20,000 was taxed by 98% leaving a 2% net take home of 38.46 pounds per week? all the historical pay issue point to the rise in earnings and levels of automatic manufacturing, schools and hospitals were built by local authorities and more woman entered the job market. Perhaps your history lessons are tainted in blinkered thoughts? Earnings are failing since the 1970’s.    

          • GuyM

            98% at any level means no incentive to do any more or any better

            in fact I’d say 50% plus means that

            there is a huge technical skills shortage in the UK, wacking up taxes or forcing down upper level salaries will only make that worse.

            if you want to compete with BRIC nations etc. on the basis of reasonably paid zero skilled manual labourers then good luck to you.

          • derek

            if you want to compete with BRIC nations etc. on the basis of reasonably paid zero skilled manual labourers then good luck to you”

            I think you’ve just had another chat with your imaginary friend “Harvey” by any chance? because I suggested no such thing, there is a skill level, I prefer the kind that can make some thing from a block of wood or metal, you OTOH probably favour the pen pusher but together we agree a mutual process of cohesion and taxes, that seems right to me.

          • GuyM

            and I think metal working and carpenters wont keep the UK with food on the table in the modern world

            I favour the technical skills, whether that be IT, engineering and yep, things like financial services

          • derek

            I’m kinda with you there, wood engineering, metal engineering, fibre optic, computers, phones, energy, hands on skills, no newspeak wrangle just plain old good honest skills with high earnings for all.

          • GuyM

            you cant have high earnings for all Derek

            for instance my mangement rate is never going to be matched by a dustman, unless you cut my salary. In whcih case why bother with the education and training?

            market rates will always be there and my position will always pay more than most others

          • derek

            Yeah! but that isn’t a reason to suggest that the binman has no worth going forward, if you were to lay down your pen then nothing much would be recognised to the rest of us but if the binmen refused to collect, plenty would see the evidence.

          • GuyM

            cant remember the last time I used my “pen”, 21st century and all.

            plus not having the roles I’ve done carried out would have had far more effect than losing 1 binman

            hence the economic rate I charge compared to the binman, a concept enshrined in John Lewis for instance (it’s how their staff bonus is calculated – on economic worth as shown by salary)

          • derek

            Sorry! it’s touch finger pushing these days.

            To be honest, I’ve no data nor knowledge of what you’ve done or not done.

            I’m not sure John Lewis has it right? althoughthe concept of bonus id a shared value on profit, which must be a welcomedeal to all, I’d reserve opinion on who get what in terms of bonus results.

            If we are moving towards the consensus of equality in shared schemes, workers ownership, then I listen and be supportive where ever I can.

        • Dave Postles

           My first full-time professional post in 1971 (after graduating in 1970 and having a year of postgraduate professional training) had a salary of £1220.  My wife was appointed to a similar job in 1973 at about the same salary (I had moved to a p-t job so that we could move for her job).  We bought a terraced house in Rochdale for £2800.  £20k was a hell of a lot of money – although the marginal rate of tax was too high.

    • treborc

       The 1979 crisis budget introduced by the Tories bears remarkable
      similarities to the 2010 coalition budget.

      Value Added Tax was pushed up
      all the way to 15%. The Tories like putting up indirect taxes like VAT
      because they fall most heavily on the poor. Then, as now, they brought
      in tax cuts for the rich.

      The top rate of income tax was cut from 83% to
      60% in 1979, just as the 2010 budget cut corporation tax for big
      business, and there were further vicious cuts in public spending, on top
      of those proposed by the Callaghan government. The strategy of Thatcher
      in 1979, in other words, was identical to that of the Con Dems albeit
      on a much lesser scale. The Tories even froze child benefit in 1979,
      just as the coalition has in the 2010 budget.

      Nothing it seems changes with both Labour and the Tories, it’s the poorest who will be the worse hit with VAT, and the ones to gain will be the rich.

      • madasafish


        After Labour CUT – in actual £s – the NHS budget cos they had no money and called in the IMF to bail us out.

        Funny how Labour supporters fail to mention that !:-)

        I of course being an old codger remember it all…

  • Mark Myword

    Until about 40 years ago the state helped families with children in two ways: by Family Allowance (paid tax free to the  carer, usually the mother, for all but the first child), and child tax allowances for all children in a family (available to the main earner, usually the father). These were amalgamated into child benefit – which is paid for all the children in a family usually to the mother. So the present benefit includes a bit of universal benefit and a bit of tax allowance. The complete removal of child benefit from higher income families not only throws up the anomalies that are already well known, but also removes any direct state support for children from these groups. One possible solution would be to allow the transfer of all or part of unused tax allowances from the non-earner to the earner in high income families where there are children, and child benefit is removed. The rationale would be to recognise children in the sytem.  

  • I disagree completely.

    What is Labour for if we do not defend the universal welfare system?  Putting aside the fact that means testing is more costly, it also devalues the entire concept of Child Benefit and other universal pay outs.  

    Quite simply, the universal welfare state is a recognition of the importance society places on children and the elderly.  It is the government acknowledging that it values every child and every person that reaches retirement age.

    Let’s take the argument back to why a universal welfare state is right and a life-belt welfare system is inadequate and just not Labour.  Let’s stop talking on the Tories terms.

    • AlanGiles

      I agree with you Matthew. Labour should never appease Conservative supporters.  They will never win over the nay-sayers – we see this on LL all the time. Even though Blair pushed Labour to the right – even though the likes of Byrne and Flint still sit in the shadow cabinet and Byrne, in particular sounds like a real Tory and some MPs like Hoey and Field actually collaborate with them,  we still have the likes of “Guy” and “Hugh” imagining they are a load of left-wingers, because for some reason they post their high Tory views on LL!. We have enough of “our own” doing that.

      It is a great pity that both “Labour Conservatives” and the real Tories are not equally as keen to expose those MPs who fiddle their expenses.

      • Hugh

         Stripping higher rate tax payers of 40% tax relief – the focus of my comments – is a high Tory view?

      • treborc

         Which labour party is the question the one that is to the left or the one in the middle, I would argue that child benefit does need changing and that people on £42,000  with children get child credits or tax credits so is the child allowance needed now your being paid twice for children, it is those at the bottom that now need helping more then those in labour middle

        • AlanGiles

          I agree with you that those on the lowest incomes need the most help, but the danger is when the likes of Mr. Lewin try to market penny-pinching under the banner of “progressive” and the other NL cliches (“radical”, “fairness” etc), you have to assume that they are jumping on the Tory bandwaggon – again!

          • Hugh

             Surely there’s very little difference between raising taxes on higher rate taxpayers (which the left broadly support) and cutting their benefits. Certainly there’s practically none at all between raising taxes and cutting a tax relief (on pensions).

    • GuyM

      Universal welfare is simply wrong, end of story.

      • But you are a Tory, so who cares what you think?

        • GuyM

          The government of the day?

          Whereas they don’t give a damn about your views do they Mike 🙂

          • But this is a LABOUR site, Guy. Go and discuss your views with Tories, who I don’t expect to listen to me given that I shall never vote for them under any circumstances

    • Absolutely, Matthew

  • MonkeyBot5000

    “a family with a single income of £43,000 would lose their benefit entirely.

    More likely, they’ll go to their boss and ask for a paycut to bring them back under the limit.

  • jaime taurosangastre candelas

    There is no justification at all in my mind a higher rate taxpayer receiving any child benefit whatsoever.  Let no one forget that among the initial motivations for the creation of child benefit was that so children could be fed a nutritious and balanced diet, and clothed adequately.

    I am a higher rate tax payer, as is my wife.  We have no need at all of child benefit.  We would not if only one of us worked.  We would not if only one of us worked at just over the threshold for higher rate.  I simply cannot understand why Labour still support the universality of the benefit.  Tapering I can accept.

    I’m now going to shoot myself and my argument in the feet.  Despite no need, we do claim it for our 2 children.  We put the money into a standards LloydsTSB savings account, and then each year take the accumulated sum and buy investments for the children.  It is our aim to establish a fund for their education at university, so the tuition fees are significantly offset.  I cannot respond to accusations of immorality for taking the money when I say that we do not need it:  I am guilty.  But in mitigation, it is unclear to me that me not claiming the money will result in more money going to less advantaged children.  No, in the crazy world of universal benefits, no one cares whether we claim or not.  I would rather make use of that money to ensure my daughter and son are not as compelled as their future-student colleagues to take bar work or other student jobs to pay their bills or reduce the amount of their student loan, and have the ability to spend that time concentrating on their studies.

    Now here is the worst:  what I describe above simply perpetuates the middle class “look after themselves” reality.  There will be millions of families doing the same.  It will result in millions of students saying “I cannot afford to go to University as I will have a debt of £50,000”, and other students saying “I can go to university as I have £30,000 in saved Child Benefit”.  Crazy crazy crazy, and I cannot see why the Labour Party support this universality.

    • Quiet_Sceptic

      The existence of the welfare state is not guaranteed, it relies on a majority of voters supporting its’ continuation and willing to pay for it through their taxes.

      The more you means test and restrict access to services, the more people you push into the group who are paying for services but getting little or nothing back, you erode electoral support for it and that ultimately benefits the parties that would scale back or dismantle it.

      There’s also the question – why stop with child benefit, what about other services? Access to the NHS? A family with income of >£86k/year can afford to pay for their own health insurance, why not role back NHS cover from those on high incomes or with assets and target the savings at the neediest? Where do you stop?

      • jaime taurosangastre candelas

        Quiet Sceptic,

        you raise some good intellectual points.  At a theoretical level, I could agree with some of them.  My father’s mother (long dead now) used her state pension to buy a very expensive brand of gin he recalls:  she had grown up in the era before state pensions, married a man who made good through a textile company, and received his wealth as an inheritance when he died.  For her, the state pension was literally free money.  But for millions it is not, of course.

        I would say that NHS treatment is of a huge range of cost, probably beyond the ability of health insurers to re-insure unless they charge huge health premiums, which of course most could not afford.  Leukaemia treatment is astonishingly expensive, and very manpower intensive, and there are dozens more examples.  Of course, maybe I am biased as my income comes from the NHS, but I would never support a move away from the free at the point of care principle.  A Duke’s son and a miner’s daughter with leukaemia are both in the same desperate position – the last thing I would ever support is some form of prioritisation based on ability to pay.

        However, do not get me started on gastric bands, gender re-assignment, or even vocal chord adjustments, all of which are respectively caused by indolence, societal over-acceptance of culture over basic biology, or vanity.  And there is an astonishingly low bar for some hapless GP to sign off on the “need” for these treatments, at which point it by policy becomes a “have to do” operation and non-elective.  The GP does not pay any form of price, or have the cost deducted from his private practice for making his signature, so it is easy to go with the flow for him.

        • Quiet_Sceptic

          Prioritisation doesn’t come into it –  the NHS would fund the miner’s daughter, the Duke would have to pay for his son’s treatment, their medical treatment wouldn’t differ.

          Also, a lot of health care treatments are affordable to those on higher incomes. Why have NHS dentists – why should the miner subsidise the dental treatment of the higher rate taxpayer’s child?

          Why should a low income worker’s taxes pay for the hip or knee replacement of the middle aged or old aged person with lots of assets or expensive homes when they could afford to pay for it themselves.

          You could roll back NHS cover for a lot of routine or standard conditions and treatments and substitute with private insurance cover without much trouble.

          The case for universality of NHS treatment is no more solid than that of child benefit. One is paid in cash, the other in medical treatment but ultimately NHS medical treatment is just a glorified insurance policy with a cash value like child benefit.

          They are essentially the same.

        • Peter Barnard

          @ Jaime T and Quiet Sceptic,
          If employees were paid proper wages in the first place, there would be no need for wage-earners to be in receipt of benefits and tax credits.
          Even Ricardo and Malthus recognised the necessity of a subsistence wage, ie a wage sufficient for food, housing, clothing and bringing up children. Nowadays, in our “advanced state,” many employees don’t even receive subsistence wages.

          • GuyM

            You ahve two choices on wages.

            1 Market rates

            2 Rates politically set, which would never work

            If you have a 3rd option, let us all know

          • Peter Barnard

            @ Guy M,
            “Market rates for employment.”
            The “market” is horribly distorted to the extent that there is no such thing as a “market” nowadays, ever since the Conservatives used mass unemployment as an arm of policy back in the 1980s.

          • GuyM

            Last I checked Peter, when people apply for a new job, when employers look to price a vacancy, both sides estimate what the market rate for the skill set is.

            Certainly supply/demand has a significant impact on what that rate might be, but what do you expect?

            The minimum wage prevents jobs from falling below a certain level, so if you want to raise that up make it a policy.

            Otherwise if you don’t want a centrally mandated incomes policy, which in a global MARKET for investment and employment with a flexible labour force then live with market forces deciding.

          • Dave Postles

             ‘Market rates of salaries’
            There’s no such phenomenon in the public service.  In some sectors of public service, there is immense competition for the posts (e.g. academic posts in HE), but there is a spinal column of remuneration (as in all public service posts in throughout the public sector).  The emphasis – unlike in the misnomer financial services – is on service (and service to the public, not to oneself). 

          • GuyM

            Not from my experience in the N HS. The pay scales are there, but the skill sets required in terms of hires mean positions are placed on the pay scales in a mixture of organisatioal pay scale structures and market rates.

            It would be pointless for instance for the NHS to want an experienced Head of IT (market rate £60k plus in London) yet be willing to only pay £40k. So I’m afraid “market rates” very much impact on public sector hires.

            Also my time in NHS areas showed my that certainly in the case of non medical staff, they were no different in outlook to private sector staff. They did a day’s work in order to get paid to support their families, not out of some greater calling.

            The fact that large numbers of staff move between private and public sectos only confirms that fact.

            My time in a wing of the NHS meant no different to me than my time in the financial services sector. Professional responsibility meant both jobs were done as well as can be, there was no fuzzy feel good factor driving increase performance simply because of the letters NHS.

          • Dave Postles

            IT staff in HE and LG are remunerated according to national salary scales which apply across the sector.  I would imagine that £60k for a head of IT would accord quite easily with national salary levels.  Heads of IT in HE are usually equivalent to professorial levels, often with that title now, and sometimes members of the VCs management team.  They are still on a nationally-determined salary scale.  In many NHS services, moreover, the IT is provided through the HE with which the combined medical school and the NHS are associated.  So the University of Leicester supports IT in the hospitals and the IT staff in the hospitals are devolved from the university IT services.  I know that because I was the departmental representative to IT services.

          • GuyM

            £60k being the bare minimum Dave.

            Ranging all the way up to £100k plus.

            But if you want to get some sort of personal affirmation from “public service” good for you, I and millions of others are more interested in getting on in the world and earning what we can to improve our standard of living and that of our families.

            I really have no time for holier than thou “public service” freaks really. I suspect having to work with any of them would be akin to  working with some sort of religious nut with a constant mantra of “we’re not worthy” whilst beating himself with birch.

          • Dave Postles

            Quite the reverse; it’s immensely satisfying.  Ich dien should resonate with you as a monarchist.  What’s the point of being here if not to help others?  Task-orientated work is valuable, but only part of the value.

          • AlanGiles

            What’s the point of being here if not to help others?”

            That’s always been my philosophy too, Dave – probably the way we were both bought up.

            Guy is quite typical though of the selfish attitudes inculcated in Thatcher’s children – and – instead of being grateful for their good luck they prefer to boast about their perceivedposition in life as somehow “better” because they have more stuff – I hate to say it but I daresay his attitude will rub off on his daughters and they in their turn will write pompous self-satisified messages on sites like this in years to come.

            Guy ought to remember that sometimes good luck can turn to bad and one day he might not be in so fortunatea position.

          • Dave Postles

             £60-£100k p.a.
            Just to round this one off (no doubt everyone is bored by it), heads of IT in HE are increasingly members of the top management team, equivalent to or designated as Pro-VCs, so £100k is well within their remit.  That situation is all about the internal dynamics of HE where IT is considered so important with the introduction of fees (but still they are not risk-takers, relying on M$ and Blackboard rather than other models).

          • GuyM

            Yet to see a private company where IT is not seen as the lifeblood of a commercial operation.

            And still I repeat we all do that andnot feel the need to constantly fixate on on “service”.

            I’d imagine you are terribly boring to talk to with allt his holier than though crap. It comes across a bit like  a fundamentalist christian.

            Do you also sell the Watchtower by any chance?

          • Dave Postles

            Some IT people thus seem to have their own personal culture, then.  From my personal experience of 18 years in local government, public service was an admirably strong ethos.  For the most part, my subsequent experience of 17 years in HE did not disabuse that ideal, although it was being eroded towards the end and now seems to have collapsed in the RG and 94 Groups HEIs.  That’s why I have become a honorary senior research fellow at the University of Hertfordshire.  Please feel free, any of you, to contribute to the hardship fund which I am establishing there.

          • Hugh

             “The emphasis – unlike in the misnomer financial services – is on service (and service to the public, not to oneself).”

            How so?

          • Dave Postles

            Thank you.  It was an exaggeration of course, but that ethos seems to exist in a fair part of the sector, particularly on the ‘investment’ side.  I posted previously the resignation letter of Greg Smith in the NYT.  There is a suggestion that it is what motivates numerous people in ‘financial services’, according to the various reports and responses in the national press (well, predictably in the press which I read).  I’ve no doubt that what few customer liaison people still survive in retail banking, are highly motivated in providing a service.  Yet again, others were too concerned to mis-sell PPI and annuities.

          • Hugh

            I wasn’t questioning the aspersion on financial services, just the unique focus on public service you identify in the state sector, and how we see that reflected in the pay structure.

            As far as I can tell, public sector employees seem  as keenly interested in their remuneration as the rest of the population.

          • Dave Postles

             Ah, oh well.  I’ve been out for some time in lovely Loughborough.  The point which I was making was that the slary rates in the public sector are not determined by the market.  No one, I would imagine, goes into public service for the level of remuneration.  People in the sector may protest to protect what they have, but that is another matter, I think.  For myself, I have first degree from a university consistently in the top ten in the world in all the league tables, a postgraduate training in one of the world’s foremost libraries, and a PhD.  I’ve never ‘risen’ into the 40% tax bracket.  That’s of no consequence to me.  There are many more graduates in the public sector with postgraduate training (MA-level) who will never earn as much as I did.  They may never break the £30kish level, especially those in LG.

          • MonkeyBot5000

             3 Artificially reduced market rates subsidised by tax credits.

          • Hugh

             How are they artificially reduced?

          • MonkeyBot5000

             By giving people tax credits to top up their wages. Without them, people would need higher wages to maintain the same standard of living.

          • Hugh

             So why not just scrap tax credits.

          • MonkeyBot5000

             I would in a heartbeat.

          • GuyM

            Good, I’m with you on that 110%

          • Hugh

            Fair enough then. I have to say, however, I’m unconvinced we’d see wages rise to cover the difference.

          • GuyM

            How many people have you recruited in the last few years?

            I’ve hired well over 40 and not one of them had a salary pushed down by the factor of tax credits.

            BAs, DAs, DBAs, PMs, ProgMs, Dev, BI Devs… all have market rates for varying levels of experience.

            Every time I discussed a new hire with a recruitment agency we’d have a discussion about market skills availability and market rates.

            In all my time in business never once have I ever heard of a recruitment process that involved agreeing a salary rate then taking some off due to tax credits.

          • MonkeyBot5000

             I’ve hired well over 40 and not one of them had a salary pushed down by the factor of tax credits.

            I doubt you’re hiring at the kind of salary level where tax credits make the difference between earning enough to live on and not.

            In all my time in business never once have I ever heard of a recruitment
            process that involved agreeing a salary rate then taking some off due
            to tax credits.

            Neither have I, but then that’s not what I was suggesting. My point is that, without tax credits, a lot of people would be asking for more money and hence the market rate gets pushed upwards.

            Whether they’re underpaid or overtaxed is a whole other argument.

          • GuyM

            The lowest was for £25,000 pa.

            Well within tax credit range.

            In all my time in work I have never heard wage discussions include moves to lower wages to get the state to make up the rest.

            That does not mean I don’t believe it ever happens, but I think it is rare and just another excuse by the left to attack management and markets.

          • Dave Postles

            I’d like to know how your new enterprise is getting along.  Mail me at [email protected] if you wish to let me know.

          • jaime taurosangastre candelas

            @ Peter Barnard,

            I would agree on your first point about proper wages.

            However, given the origins of Child Benefit (to allow for decent nutrition and adequate clothing), I can’t see a case at all to be made for higher rate taxpayers to be paid this at all.  I can’t really see a case for anyone over the national average wage to receive it, but that may be too extreme a suggestion, so I do not make it.

            The provision of shelter, food and clothing are the first priorities of any family, whether nuclear or unconventional.  Flat screen TVs, holidays and smartphones are distinctly secondary.  Anyone who earns enough to be on the higher rate of tax has more than enough money to shelter, feed and clothe their children, and should not be a burden on the state.  Let the state rather concentrate on distributing the same amount of money onto those who earn less than the national average wage.

            That point to me seems so fundamental and in accordance with Labour’s values as I understand them that I cannot comprehend why the Party opposes getting rid of Child Benefit for people like myself, who can manage perfectly without it.

          • GuyM

            It’s a bribe Jaime and was always intended to be partly that.

            The idea was to give everyone some sort of welfare hand out in order to make the higher waged feel they had some benefit and vest interest in the welfare state.

            The same logic was applied by Gordon Brown to the retarded tax credit scheme. Higher rate taxpayers taxed only to be provided with state hand outs. Not only catching ever more in a web of state dependency but also requiring a lot of new public sector employees to manage the money merri-go-round.

            What other possible reason is there to give someone on £50,000 pa state benefits other than to draw them into the welfare net?

          • jaime taurosangastre candelas

            I may be the only person on the planet to accept a bribe and make use of it for my family, but to say “give me no more”.

            In my defence, I do not regard it as a bribe, but rather like Nero fiddled while Rome burned.  We don’t have the spare money to give it to higher rate taxpayers when we can do without.  It is also a massive betrayal of what the ethos of the welfare state, and the Labour Party is about.Either I am crazy (you will all tell me, I am sure), or the system is crazy, offering bribes to those who do not need them.

          • GuyM

            You are correct not crazy.

            It’s a bribe to mitigate opposition to a welfare system the left have ever wanted.

          • No. You fundamentally misunderstand the welfare state and its design,  which was a universal base with additional means tested benefits – not the other way around

          • GuyM

            designed by 1950s socialist to tie the middle classes into welfare provision by offering them a few scraps.

          • AlanGiles

            Not as clever as you think, Guy. It is pre-50s. Except for 1950, the Conservative party was in power from 1951-1964. Are you saying Winston Churchill (PM 1951-55) Anthony Eden (955-1957) or Harold McMillan (1957-1963) were “socialist”?.

            The great man is a bit flaky on fairly recent history! Perhaps you should take some evening classes?

          • GuyM

            45 to 51 under Labour, so late 40s or early 50s either way the ethos as bribe the middle classes with welfare scraps

            As to accuracy on a blog as to Atlee v Churchill, Eden and MacMillan, I simply don’t care.

            You though remind me of a typical rather boring pub quiz fanatic.

          • jaime taurosangastre candelas

            @ Mike Homfray,

            I think you are wrong.

            No one owns the welfare state – it is defined by the policies put in place by whichever Government is in power.   The original design was merely a template by Attlee’s government – it is not in itself some enduring truth.  It is a set of policies that were popular in 1945.  It is politics and the ebb and flow of political parties as to what the welfare state is in 2009, 2012, or after the next election in 2015.

            For me, the welfare state should be about using the redistributive power of taxation to channel financial assistance to those below the average in terms of income.  Nothing more, nothing less.  Universal benefits are a completely inappropriate way of addressing that.  In my mind, no household on or above the national average wage should ever receive a single penny of welfare assistance.  If you are above the national average, no child benefit, no housing benefit, no other form of universal benefit because YOU DON’T NEED IT, AND IT IS BL**DY EXPENSIVE FOR THE COUNTRY TO PROVIDE.

            It may have escaped your attention that we have a crippling deficit and are loading up debt for our children and grandchildren to pay.  That’s a lot more unfair than some of the things Labour do support, such as everyone getting child benefit, including millionaires, and that child benefit is paid for from the taxes of minimum wage workers.

            But hey ho, in the crazy world of universal benefits and socialist nutters that is acceptable because it is in accordance with a single academic report made in 1942 in which, it is acknowledged that universalism is only suggested as there were no more effective means to target support to those that really need it.  Yes, even Beveridge only supported universalism because it was the least difficult way ahead.

          • I know you are wrong, Jaime. You know about economics, but you know little about social policy which you constantly reduce to social policy. Go and do some research….and thanks again for displaying that you are against yet another Labour policy. What are you doing here, Toryboy?

        • With people like you in the medical profession, its hardly surprising that people are still campaigning for access. You clearly know nothing about gender re-assignment – perhaps because like many hospital doctors, you have very little idea of the social consequences or setting related to what you do, amply identified by your posts here.

          Go back and peddle your philosophy in Chile, do….

          • Bill Lockhart

            I’d rather keep the |A&E doctors and export some of the dilettante part-time sociologists if it’s all the same.

          • GuyM

            Under Labour cancer drugs were rationed on cost.

            Anyone who believes gender re-assingment ought to be funded above drugs that may keep someone alive with their family for longer has his or her priorities badly misplaced.

          • jaime taurosangastre candelas

            This is my country as much as it is yours.  I am married to an Englishwoman, my children were born here, love their home and feel comfortable here.  We contribute to our society.

            I will not be browbeaten by you.

          • GuyM

            Mike’s like that woman in Rochdale that Brown ran into at the election.

            He is against global markets, free trade and the movement of Labour. Hence as you started in Chile, you should stay in Chile as he can’t stand hte thought of the more able moving to better theirs lives when the less skilled can’t.

            “All in equal miserey” would be Mike’s motto

          • Then stop using your position to discriminate against others. Transgendered people in your hospital area need to be warned about the views you hold and think acceptable to express

          • Bill Lockhart

            And poor Indian people who have children need to be warned about the views you hold and think acceptable to express.

            “But the country will collapse unless it does something drastic about its
            population, and that may take a Chinese-style approach, which is far
            from democratic, albeit absilutely needed. There are some good ‘carrots’
            – for example, we came across a first-division English-medium school
            which offers free places to the poor, but only if the mother has two
            children and is then sterilised. Is this harsh? I don’t think so.”

            Mike Homfray, who bellows about democracy and human rights-  but only for the rich like himself in the West.

          • jaime taurosangastre candelas

            That is a horrifying set of Mike’s views you report.  It is the sort of thinking espoused by the attendees of the Wannsee Conference. Efficiency to a difficult social problem, i’m sure he thinks.

            I appreciate that they were publicly made by a member of the Labour Party “in good standing”, but had they been made by a member of any other party, I am sure Mike would have been calling for their public expulsion, and I would agree with him.

          • jaime taurosangastre candelas

            There is no discrimination in my post.  You have invented it.

            I have expressed an opinion, and one that is backed up by physical and policy reality.  It is not biologically possible to change gender, even from the 13 internationally recognised natal intersex disorders.  The law tries to pretend it is, but it is not, no matter how much surgery performed or hormones administered. In policy terms, once a course of surgery and lifelong hormones has been sanctioned, it is a “have to do” procedure, but the cost of that is not ever considered.  My opinion is that it is a waste of money, merely resulting in the surgical removal of unwanted tissue and costing money through life for drugs.  It does not ever change anything, least of all gender.

          • derek

            Jaime, I don’t know how you’ve survived as long as an  NHS doctor? aren’t you in breach of your rules by going into patient confidential circumstances.

            To be honest, it’s about time the trade union reps in your area took you by the scruff of the neck and guided you out the front door. 

          • jaime taurosangastre candelas

            No.  I believe if you did some research you’ll find that “gender re-assignment” is not an A&E procedure.  Or I can save your time by stating that it is not. 
            If a trade union rep even tries to take me by the scruff of the neck he or she will get a very polite pointing out of their total lack of competence (in both senses) to affect my employment circumstances.

          • derek

            We’re not really sure what alias you akin to? a few tapping marks up in the Cambridge area? I do believe you are over stepping your contractual arrangements (  patient confidence) you’d be surprised at the kid of mud that can stick?

      • GuyM

        Scrap child benefit and reduce taxation.

        Plus give tax relief for those paying for private health care insurance.

        • Bill Lockhart

          When the private health sector start training all their staff from scratch at no cost to the public purse, plus offering complete hospital services including emergency ambulances and A&E- then you can start talking about tax relief-not before.

    • derek

      Obviously the higher rate of income tax is to low for you and your wife, so rather than create a false attack on benefits, shouldn’t you be supporting a higher tax rate on your joint disposable incomes?

      Honesty is the best policy?

      • GuyM

        Why should anyone pay more of any £1 they earn to the state than rather keep themselves?

        You love the idea of contributing to others beyond providing a basic safety net, most others do not.

        You put tax up and more and more will avoid it where they can. I’d use any and all avoidance options with a clear conscience.

        • derek

          Why should anyone take you seriously? having a whole privatised nation that ignored the plight of the needy would result in a civil war.

          Do you remove the Monarchy? do you close all state schools and foreclose the NHS.

          To keep threatening to leave? where on earth would you go? at the end of the day, we all want to earn and live in dignity and embrace the social cohesion of humanity, shaving another 20,00 thou off your salary to help create the wider society is probably right and proper, after all! if you proclaim the intentions of fair play in cricket, then just pitch that thought out there to your fellow citizens.

          • GuyM

            You seem to think not wanting to be taxed to provide for income redistribution equates to not supporting state provision of schools and medical care etc.

            It’s the usual idiotic stance of the left.

            I’ll accept reasonable levels of tax for schools, for hospitals and all the other infrastructure, that’s not in question.

            I was talking about WELFARE. So a basic safety net of unemployment benefit and the like but not a penny more. No redistribution techniques like tax credits thanks.

            I’ll go to work to be taxed to fund a school, but not to provide some underclass scum with a mobile phone.

          • derek

            I’m not to sure I’d class your work as deserving, your certainly not productive in a manufacturing sense.

            Reasonable levels? set by your own mind? if you dislike the welfare support benefits so much, then why aren’t you asking for more paid employment? or is it…”see it as you do” for tae see us as others see us.

          • GuyM

            You don’t define “deserving” Derek, the market does that and always have.

            As for paid employment, only mine and my wife’s interests me.

          • derek

            I’ll concede that, your most probably correct to lay the blame of greed and other indulgence at the private markets front door. Thank you most sincerely!!!!!!      

          • GuyM

            you can always campaign for communism, I hear it as a fine track record

            until then markets and freedom to buy and sell skills and labour remains the norm

            my work can or can not be defined as “deserving” on the only criteria that matters….. whether someone wants to ay for it.

          • derek

            I’m not bursting out in praise of  everyone should drive a lada and earn the same, I recognise differentials in paid structures but I also recognise the need to raise the lower bracket earners to a living wage position, where state intervention isn’t a necessity?

            I’ll settle for you as a member paying into a state, in the knowledge that your income has many supportive roles, whether you buy the daily paper or pay the decorator for work done, is fine by me.

          • GuyM

            so long as my ability to leave that state remains as free as it does now… along with all the lovely avoidance options.

      • jaime taurosangastre candelas

        Unless you propose a massive increase in percentage terms of tax for higher rate taxpayers, your argument does not work mathematically.  What I suggest is that in my family’s case, we for-go £1800 annually in child benefit for 2 children, and the Government can use that £1800 to give those less fortunate a lift up.  If you do it through tax increases on higher rate taxpayers and allow higher rate taxpayers to still claim child benefit, you will need to increase tax payable by those in the higher rate bracket by £3600 (i.e. we claim our £1800, but also contribute £3600 to achieve the net £1800 reduction).

        An increase in tax for the higher rate taxpayer of £3600 is effectively around 8% (from 40 to 48%) at the level the higher rate starts.  Does that sound electorally attractive to you?  It does not to me.  Raising the £45,000 person from 40% to 48% sounds like a death wish.

        How much simpler to simply stop anyone on the higher rate from claiming the initial £1800.  Or if that does not work, printing another box on the self-assessment tax return that simply says “If you are a higher rate taxpayer and claiming child benefit, insert annual amount of child benefit claimed and pay us back that amount”.  All higher rate taxpayers submit a self assessment tax return.  That would result in an effective increase of around 4% in annual tax for the £45,000 tax payer which is also difficult to sell to the electorate, but less difficult than 8%.  Of course, the difference between 4% and 8% is £1800 in the pocket, but the headline numbers would ignore that.

        The universality of this benefit is completely stupid.  The policy of the Labour Party to support this universality is also completely stupid.

  • Dave Postles

    Now Cable has changed his mind – it must be the cleanest in politics.

    ‘No fault dismissal rule’!

  • ThePurpleBooker

    I think you make a good point, but I disagree. We should instead get rid of higher rate pension tax relief altogether, which can easily fund free universal childcare which would be extremely beneficial for all families, it will improve social mobility and reduce inequalities. Instead of backing Osborne’s original plan which I feel is unfair, we should scrap child benefit and child tax credits for families earning over £100,000 to invest in early foundation years.  That would be tough but fair.
    On Winter Fuel Allowance and cold weather payments, we should be more radical by legislating that energy companies subsidise pensioners by putting them on the very lowest tariff so that the state do not fund these benefits and instead the markets understand their responsibility.

  • Can’t say I disagree with this, and I’m glad a progressive case is being put forward on it, assuming the numbers given above add up. I remember seeing a clip of an exchange between Louise Mensch and Yvette Cooper on this in the Commons a while back. Mensch alleged that low-income women at her surgeries were telling her they couldn’t understand why Labour opposed the coalition policy on high earners, and while Cooper did hit back forcefully, asking whether those same women were happy about Coalition cuts to Sure Start and other, more targeted tax credits, I couldn’t help but notice she didn’t directly rebut Mensch’s point and wondered where our defence was. To me, the “fairness in tough times” theme is a vital one. I understand the arguments about universality, and I’m always concerned about phasing and definitions for means-tested subsidies, but Labour’s going to have to accept that we need to mentally shelve certain policies until we can find the money for them again.

    • Brumanuensis

      There is plenty of money for child benefit. The only thing lacking is political will. Billions are being spent on NHS reorganisations, corporation tax cuts, Trident, free schools, HS2, increasing foreign aid, additional PFI schemes, etc. I don’t even disagree with all those policies, but the point is that politics creates necessity, and the government’s decision to axe child benefit for higher earners has precisely nothing to do with affordability. 

      • GuyM

        welfare payments to those on high incomes is simply bribery to try and increase support for welfarism

  • Dave Postles

    ‘I simply wish to pass in obscurity, quietly and noticed by as few as possible leaving little or no mark of my coming and going.’
    Starting when exactly?

    • GuyM

      It started quite a while ago when I realised high level politics wasn’t for me, the dedication for professional sport wasn’t for me and I didn’t like the idea of CEO style business leadership either.

      Close friends (from all walks of life) would describe me as a happy perennial underachiever, which at times drives my wife up the wall.

      My politics and comments on LL amongst other places are driven by this attitude. I do not feel obligated to “be the best I can” in pursuit of your collective nirvana, nor do I regard it as your right to enforce anyone to work towards that through punative taxation etc.

      I reject the more personal notion of society and community and expect any government to butt out of my life as far as is possible and to take only what is needed from me taxation wise rather than what people like yourself want to take.

      The problem with your sort Dave is you insist everyone has a part to play in your grand socialist design, despite many of us rather wanting you to simply pss off and stop bothering us.

      • Dave Postles

         ‘I simply wish to pass in obscurity, quietly and noticed by as few as
        possible leaving little or no mark of my coming and going.’
        Starting when exactly? 

        • GuyM

          as soon as you stop trying to force socialism onto all those who detest your creed?

          • Dave Postles

             No, many of us here as much voluntarists as communitarian and/or collectivists.  Communitarians are not socialists.  If you hadn’t noticed, we live in a democracy.  You intend to use the power of persuasion (Vance Packard’s ‘the hidden persuaders’, although not so latent now) in your workplace, so please allow us on LL to express our opinions to each other without your constant interloping.  Please spend more time with your PC games, your wife, and your two children.  They need you more than we do here.

          • GuyM

            As I said, as soon as you stop expecting your creed to hold any importance to others, or insulting the Tory areas of the country who see what you believe in as nothing more than holier than thou clap trap.

          • AlanGiles

            I still find it odd that as you hate socialists and socialism so much you persist in coming on to a Labour website, where common sense tells you, you are going to read views with which you profoundly disagree. Why do you do it? Do you just enjoy bragging about your personal circumstances?.

            Last night, in one of your personal attacks againsgt Dave you wrote “I’d imagine you are terribly boring to talk to”

            Well, I happen to enjoy what he writes and if anyone is boring, matey it is you, with your constant references  to the working class, the “underclass” spiced up with details of what you regard as your affluent lifestyle (I imagine that this came to you a bit later in life, if you had always been what my grandparents would have called “comfortable”, you would take it for granted and not go on boasting about your job, your lifestyle, your daughters education etc). 

            You think you are so superior to the rest of us, but since you have no knowledge of our lifestyles, you cannot know for certain that you are “better” in material terms than any of the rest of us. Just because everybody else has more class than to display vulgar ostentation,  and constantly boast, doesn’t make you “better” in anybody else’s eyes but your own.

            If you don’t like LL and don’t like the people on it, then I would respectfully  suggest you leave us, and go and watch a few repeats of “Keeping Up Appearances” on UK Gold – you’d find you had an awful lot in common with the heroine of that series!

          • GuyM

            I post on LL as it reminds me of all I detest in politics, politicians and humainty in general.

            It serves a useful purpose therefore in ensuring I don’t get lulled into a false sense of security and engage with any of the chumps I see on high streets or rarely at my front door.

            I’d actually like to offer my personal thanks to you especially for aiding in the above, it does me great service to be reminded just how unpleasant “do-gooders” actually are.

          • AlanGiles

            What sad, pathetic little man you must be Guy. You have this wonderful lifestyle, a beautiful wife, two spoilt brats, dreams of retiring to some sunny shore. You have all the material possessions you could ask for, you like to think yourself superior to the rest of the people in this country – yet with all that, you have nothing better to do than post pompous, irate rants on this site, often interlarded with gutter langauge.

            I am sure there are many people on here who feel contempt for you – but actually I feel a bit sorry for you –  you seem to be a sad, lonely man with delusions of grandeur, who can only feel “big” by belittling others.

            And of course – we only have your word for it that you are this successful snob – you could of course be a Billy Liar character.

          • It can’t be going all that well for him at home nor at work. He’s the most prolific contributor to this blog, posting at all hours of day and night, weekdays and weekends.

            One wonders why his employer and family tolerate it.

            Or perhaps, as you suggest…

          • GuyM

            Working from home  for 2 or 3 days a week is a blessing. Although as I’m likely to change jobs in the next month or so I guess my time will be more limited.

            As to home, I’m in my home office, watching the days sport, F1 on the new Sky channel this morning and an afternoon of 6 nations now.

            Wife and daughters are watching some crime series thing they like, but Saturday is sport on the tv. The blessing of a nice office overlooking the North downs with a pc to write on LL and a flat screen with all the cable channels to watch whatever I like…. heaven and no need to mix with “society”

          • GuyM

            Funny isn’t it, I revel in obscurity and underachieving and you think I feel “big” 🙂

            I’m quite mundane, marriage of two well paid professionals, but not millionaires by any means. Daughters at Grammar School and a very simple lifestyle.

            Health club, golf club, NT properties, beach in summer, cable tv, internet, cinema, good food and a few friends. That’s all nothing more. Probably far less than many others but all I want.

            What you can’t handle Alan is I can’t abide certain other groups in society and see no obligation to help them directly or indirectly.

            I’m not intrinsically Tory, I’m intrinsically “leave me alone to manage my life with as little state interferance, nanny advice and social enhineering as possible”. 10 years ago I though Blair sort of got that, but he’s gone and Labour are falling back into their do-gooding, stick their noses in and expect everyone to “engage” ideology. You are a great representative of that as well.

          • AlanGiles

            What a damned pity you don’t leave us alone. Yet again a response that is all me, me, me. Even in this current reply (“marriage of two well paid professionals, but not millionaires by any means. Daughters at Grammar School and a very simple lifestyle.
            Health club, golf club, NT properties, beach in summer, cable tv, internet, cinema, good food”).

            Self promotion on the scale you indulge in it Guy is a bit like masturbation – it only gives pleasure to the person doing it.

            As for “What you can’t handle Alan is I can’t abide certain other groups in society”

            We know you are arrogant, vain, selfish, Guy I don’t think you need to keep repeating it. We all know what you are.

          • GuyM

            Even when I show how mundane my little life is, how happy I am in obscure underachievement you think it is “self promotion”. I’d guess under your line of argument any personal detail is “self promotion”, online we should all be indistinct avatars should we?

            I revel in doing as little as possible and ensuring I do the minimal in supporting anyone outside my family. I am happy to say I do not use the full span of talents and skills and near completely opt out of “caring” or seeking to aid the “greater good”. You can’t stand that can you?

            And I stand by that point, you simply can’t handle the fact I detest certain societal groups and am happy to make that clear can you?

            Anyone on LL has to live with the constant insults and slurs directed at Tories, Southerners, Londonders, Middle Classes and Private Sector Workers etc.

            BUT total and utter outrage from you should anyone reply by saying they actually detest many of the groups Labour hold most dear.

            Labour has become once more the party of busy bodies, of do-gooding holier than thou sanctimonious “listen to nanny” advocates. That’s why I think you are beyond the pale Alan, not over policies on the NHS, welfare and the like.

            Those policies are dry ideologcial differences that in practice mean not a great deal. But in terms of the cringing Simpsonesque type cry of “won’t anyone think about the children”
            I detest your inference of the right to intrude, bother, hold expectations and that those able SHOULD ALWAYS feel obligated to help.

            No thanks, simply mind your own business Alan, and I’ll continue to argue that is exactly what you and your political soulmatea should do always.

            If Labour returns to a Blairite trend of distanced macro management and lets go of the worse excess of socialist lecturing that Milliband is drifting into then maybe you’ll get re-elected.

          • so you are here simply to cause trouble – wish the moderators would actually read this and block you for good. A bit too much liberalism around here!

          • GuyM

            Yes because you’d block all Blairite supporters as well, in fact you’d remove them from the Labour party to maintian your socialist ideological purity wouldnt you Mike

          • AlanGiles

            You do go on, Guy. 

            I am not fond of censorship, but you have said all you have to say so often, I really think you have nothing left to offer this site, and perhaps it is about time you were invited to leave. You seem to believe ignorance is wit. The fact that you have said (often) things like  “saying they actually detest many of the groups Labour hold most dear.” suggests to me this site should not bother to keep giving you a platform to display your ugly character.  There are  Tories on this site who manage not to be so condescending and offensive, and are not nearly so stuck up. I do sometimes wonder if you are being deliberately a parody of yourself, or if you are a fantasist, because your wittering becomes ever more desperate and shrill. Perhaps you were not given enough attention as a child and in early middle age now wants to compensate by making yourself noticed, even if in a negative way.

            You say you want to be left alone, so why do you post several times each day on a public forum?. I wonder if “Guy M” is really who he tries to pretend he is?

            Just one thought about your snobbery: supposing one day your house burns down, or you have a serious accident: the chances are a fireman or somebody else from the emergency services who have to deal with you, will be from the “class” you so despise.  they might even watch reality TV or eat fast food. Will you refuse their help, after all, socially you regard them as beneath you, and bursting into your home to put the flames out, could be construed as “do-gooding” or even busy-bodying. Perhaps you will have a pre-printed questionnaire at the ready so you can decide whether they are of a suitable social class to enter your premises.

          • GuyM

            And what do you bring Alan, other than the same tired old inverted snobbery in favour of the “umble worker”?

            But of course those of us who don’t agree with you must sit in silence and be grateful for the do gooders of society like yourself deign to offer us your wisdom in exchange for ever more taxes?

            What I love most about your post is for the call for censorship…. typical of every left wing of your type I’ve ever met. Aleways in favour of free speech until they run into an impacable opponent, then they run behind the good old barrier of fingers in ears.

            You could also not reply to my posts, even… shock horror, not read them, yet still you feel the need to reply with your crass holier than thou socialist homalies.

            Go and run a suop kitchen or preech at the local church tomorrow and maybe someone wont cringe at your do-gooder peronality.

          • AlanGiles

            Another ill-written rant, Guy. It’s “preach” by the way – not “preech” – so much for your alleged superior intellect!

            I don’t think I am the only one sick to death of your boasting, like a house-proud whinging old woman – the impotent ramblings of a selfish, self-obsessed deluded man

          • I think ‘Guy’ is an invention designed simply to wind us up

      • Brumanuensis

        I feel rather disappointed that you seem to have no civic feeling at all. Are you really saying you recognise no obligations on your part towards other people – excepting your family of course?

        I’m glad you’re happy, in your own way. No-one on LabourList wants to impoverish you or continually prevent you from achieving your own happiness. We’d just prefer that you be mindful of the effect your actions might have on others, both intended and unintended, seen and unseen. Sometimes we all have to make difficult sacrifices for the greater good – like the author of this article suggested, although I think this is the wrong way to go about it. The very fact we often have trouble knowing what the ‘good’ is, doesn’t mean we should do nothing. It just proves we have to be careful.

        • GuyM

          I replied but once again selectively replies are being removed by the censor. No bad language, no insults, just removed. C’est la vie I guess.

          Brief response once again is that  nope I have no interest in community and society beyond macro support through reasonable taxation and I feel no obligation to others other than through living a peaceful, quiet, unobtrusive lawful life.

          I mind my own business, keep myself to myself and I’d like everyone else to do the same

          • “I mind my own business, keep myself to myself … ”

            If only you were true to your word.

  • Dave Postles

    ‘Yet to see a private company where IT is not seen as the lifeblood of a commercial operation.’
    So what?  A complete non sequitur.

    • GuyM

      meaning that your nomage to public sector IT means nothnig as it is run of the mill

      back to self flagellating for you over “public service”

      • Dave Postles

         Nah, in HE it’s about providing an educational experience and imparting transferable skills.  You stick to your IT in companies as mundane.  In HE, it is a formative element in educational services.  That’s why the online Stanford and MIT courses have been so successful.  That’s why so many pioneering apps are being produced from HEIs in the USA for improving the educational experience (VUE, as just one example).  

        • GuyM

          Mmm a comparson of my IT, multinational global implementations across multiple language and cultural set ups against yours of “providing an educational experience and imparting transferable skills” in one department somewhere in the UK?

          I’ll stick with mine thanks, I always though teaching to be one of the most low life jobs a graduate could go into and still do.

  • Glenda-h

    Why are the government going to take back the child benefit in tax from high earners and how far back are they going to go.  I thought it would just be stopped from jan 2013.  why do we have to repay and how long for????


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