Rethink family benefits?

 

          I was glad to hear leading members of the government say today they plan to think again about how they will implement their policy of cutting Child Benefit for the better off.

          In the original proposal there were two big problems that gave rise to a sense of injustice. The first was the differing treatment of the one earner and two earner couple. A single earner couple on £45,000 a year loses all child assistance, whilst a two earner couple on £80,000 still receives it. That needs changing.

           The second was the fact that as soon as your pay goes over the 40% Tax threshold you lose all child benefits. This could be a perverse incentive to avoid promotion or extra pay. That too needs examining.

             The Chancellor could still make his savings, whilst working out a fairer and gradual withdrawal system that tackles both these problems.  I have discussed these matters in the past with colleagues, and never thought they would implement the original proposal as reported.

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86 Comments

  1. Neil Craig
    Posted January 13, 2012 at 2:21 pm | Permalink

    It is very much not in the national interest to discourage the most successful and competent not to have children.

    Of cpurse it is also politically incorrect to say that smart parents have smart children – which, as with som much PCness, doesn’t stop it being true.

    • lifelogic
      Posted January 13, 2012 at 4:53 pm | Permalink

      I am sure the BBC types think all is nurture and upbringing because that is the way the left thinks – they are born with genes that make them think that way – but do not tell them.

      A cuckoo however never even meets it parents and yet knows to murder the other “hosts” chicks after hatching, then migrate to Africa, return and place her eggs in a new reed warblers nest exactly a day or so after she lays her own eggs.

      It is clear that very much is genetic. This of course destroys the absurd BBC/lefty “discrimination” and “equality” agenda it is thus not liked much by the caring sharing left/Cameron and Clegg types. Government of course need vast resources, staff and taxes to re-educate all the Cuckoo’s and spiders and make them nice caring and sharing and equally paid.

      • Disaffected
        Posted January 13, 2012 at 6:58 pm | Permalink

        We pay teaching assistants to teach nurturing to young children whose parents cannot parent.

        It is a choice to have children and it is a fact there are associated costs to having them. The state/taxpayers should not pick up the tab. There should be a cap for the amount of benefits associated with children so it does not provide an incentive to have more children. Benefits for the first two children only for people on low incomes only. In most cases the money is not spent on them it goes in the general household budget and some wealthy people give it away.

        Same principle to be applied to the winter fuel allowance. Politicians need to stop the notion it wins them votes and act in the national financial interest.

        Lower taxes please.

      • Bazman
        Posted January 13, 2012 at 7:07 pm | Permalink

        That would explain how if you go the Eaton you will almost automatically do well in life as you are intelligent much observational evidence proves this not to be true. The Wealthy elites like Tim-Nice-Butt-Dim are there because of their special genes and their merits. This is laughable and show how simplistic you really are. King, castles and dirty rascals.

        • Mark
          Posted January 13, 2012 at 10:44 pm | Permalink

          Perhaps you should read up on Francis Galton’s discovery of regression to the mean:

          http://www.econ.uiuc.edu/~roger/courses/471/lectures/L1.pdf

          • lifelogic
            Posted January 14, 2012 at 11:20 am | Permalink

            Regression to the mean is much misused to justify speed cameras in places where there have been a few accidents one year then claim wrongly to have saved x accidents the next.

            But how long do you think it would take for a cuckoo to regress to the mean behaviour of building its own nest and feeding its own children. It there even any pressures on it in that direction?

          • APL
            Posted January 15, 2012 at 10:29 am | Permalink

            Lifelogic: “But how long do you think it would take for a cuckoo to regress to the mean behaviour of building its own nest and feeding its own children”

            False analogy. The mean for cuckoos is parasitical behavior. They have evolved to this particular ecological niche.

            It is either successful or they will become extinct. In this case the mean is a changing baseline, not within the cuckoo species, but within the environment the cuckoo lives in.

        • lifelogic
          Posted January 13, 2012 at 11:00 pm | Permalink

          Genes are not the only factor but they are a very major one. For example the differences between genders, in anything you care to measure (what they choose to buy, their general motivations, interests, subject chosen at school, longevity, height, cars, insurance risk …….. are huge. You can pass endless laws but unless you are going to genetically re-engineer people it will clearly change nothing.

          ,

          • Bazman
            Posted January 14, 2012 at 10:25 am | Permalink

            Going to Eton is also a factor and has little to do with genes. Or everything as you have to be male…

          • lifelogic
            Posted January 14, 2012 at 9:07 pm | Permalink

            Going to Eton does indeed help greatly. If you do go to Eton you probably have fairly clever parents with contacts and some money, also you sound as it you have money even if you do not. Anyway you mix with people who have parents who know how to use money well and have money. (I have however never met Cameron as yet so perhaps there are problems)

            Personally I went to a small northern grammar school but all the Etonians I have met have been very pleasant and quite useful in general – perhaps a bit on the dim side on occasions but very polite & pleasant in general – it has to be said.

    • zorro
      Posted January 13, 2012 at 5:45 pm | Permalink

      This is interesting as we see the birth rate amongst the middle classes shrinking because of the need of families to have both parents working and starting families later. However, we may see some increase in children being born to more well off parents in their late 30’s and 40’s in the near future. However, this is probably easily countered by the increase in children born to poorer or immigrant families where the birth rate is higher.
      I know what some say regarding genetics and it might be generally true that children born to better off families do better. However, I think it is more likely to be due to better parenting and a more selective education system which allows people of any background (rich or poor) to take advantage and progress. Perhaps it might be argued that one’s situation in life might cause one to aspire to a higher position in society like in previous days (I’m thinking of Thomas Cromwell, a butcher’s son).
      I think that in a modern egalitarian (in opportunity) society all children should have the opportunity to excel and aspire to greatness in their most appropriate field. This is unfortunately lacking in our education system today which tends to write people off or force them into the wrong educational choices.
      If you look around society you can see that privilege still exists but it doesn’t necessarily mean that the most sensible or cleverest (well educated?) people govern or run our societies…Do I need to expand….?
      There are lots of people with PPE Oxford educations (not including Lord Major) who have taken many of the decisions over the last forty/fifty years which have led to the collapse of our economic well-being compared to other countries.

      zorro

      • zorro
        Posted January 13, 2012 at 9:55 pm | Permalink

        Sorry, Wolsey’s father was reputed to be a butcher and Cromwell’s father a blacksmith.

        zorro

      • lifelogic
        Posted January 14, 2012 at 11:26 am | Permalink

        Indeed as you say “all children should have the opportunity to excel and aspire to greatness in their most appropriate field.”

        But it is not proof of “discrimination” if some groups, genders, ages do different things than others. Nor should the state waste money and effort trying to level every hill and “correct” natural differences.

        • zorro
          Posted January 14, 2012 at 5:04 pm | Permalink

          It certainly is not proof of discrimination. People have different vocational skills and abilities. We have been weak in nurturing these abilities as a country for a long time. I think this is one area where the state (preferably small) should have an interest because a well educated, skillful population will produce more, earn more, commit less crime, and make for a wealthier country in all respects.

          zorro

          • lifelogic
            Posted January 15, 2012 at 10:54 pm | Permalink

            Worse than weak we educate people in totally the wrong things and with duff information and BBC type lefty political indoctrination much of the time.

    • Bazman
      Posted January 13, 2012 at 7:09 pm | Permalink

      Often, and I have seen this the intelligence seems to miss a generation. As if there is some sort of balance that needs to be kept. Some successful parents have some really %^&8wit children.

      • Nash Point
        Posted January 13, 2012 at 8:52 pm | Permalink

        I suspect your parents were really bright

      • lifelogic
        Posted January 13, 2012 at 11:01 pm | Permalink

        Perhaps it is the drive & motivation that is sometimes lacking given a rich comfortable up bringing.

  2. Nick
    Posted January 13, 2012 at 2:21 pm | Permalink

    Still not addressing the issue of taxing people and offering nothing in return.

    If people are paying tens of thousands of pounds in taxation, isn’t it fair to treat them like everyone else?

    Ah yes, lets milk them and offer nothing in return.

    Same mentality as slave owners. I feed them, they should slave for me.

    • lifelogic
      Posted January 13, 2012 at 6:51 pm | Permalink

      Taxation at 50% on income at and 40% inheritance together with inflation (in effect) can take nearly all your capital off you in just a few years. What level of tax constitutes slavery? Cameron’s 50% +NI plus 20% vat + 40%IHT or Healey’s 83%+15% investment surcharge?

      The clear message is if you are British, not nondom and have capital leave.

    • Disaffected
      Posted January 13, 2012 at 7:01 pm | Permalink

      I disagree. Let’s stop the benefit culture and have lower taxes for the workers. Less entitlement from the state for every able bodied person.

      • uanime5
        Posted January 13, 2012 at 8:29 pm | Permalink

        That won’t work unless there are enough jobs for all the able bodied people. Currently there are over 2 million more people than there are jobs available.

        • lifelogic
          Posted January 13, 2012 at 11:04 pm | Permalink

          Jobs can be created very quickly as new things become economic – if they just stop over taxing and over regulating – they is not a fixed number!

        • Electro-Kevin
          Posted January 14, 2012 at 12:56 am | Permalink

          Uanime5

          2.5 million net immigration in 15 years.

          Coincidence ?

          • Bazman
            Posted January 14, 2012 at 10:23 am | Permalink

            Cheap labour for business. Only desperate foreigners will put up with the living conditions offered by the wages on offer.

          • Electro-Kevin
            Posted January 14, 2012 at 10:38 am | Permalink

            2.5 million net immigration in 15 years and a housing crisis which seems to have caught planners and builders out, Uanime5 ?

            Coincidence ?

          • Electro-Kevin
            Posted January 15, 2012 at 12:24 am | Permalink

            Bazman – You mean minimum wage ?

            I agree. Benefits pay more. They also drive up the cost of housing artificially (benefit subsidised landlords) making minimum wage less than adequate.

            Why do you think people get tattoos on their faces ? It’s not only to intimidate fellow citizens – it’s mainly to ensure rejections at job interviews.

      • Stephen Almond
        Posted January 13, 2012 at 9:01 pm | Permalink

        Disaffected,

        Yes! Why should people on £20,000 a year pay tax to give to people (couple, or otherwise) earning over £40,000 per year.

        WHAT ABOUT SOME CUTS!

  3. javelin
    Posted January 13, 2012 at 2:48 pm | Permalink

    Dow Jones reports S&P Eu downgrades imminent – but “not Germany” – which may mean France.

  4. Paul Danon
    Posted January 13, 2012 at 3:22 pm | Permalink

    Rather than tinkering, let’s have just one benefit paid to poor people through the tax-system. It’s unfair that I should pay tax on my small pension to provide child-benefit to someone on £35k.

    • zorro
      Posted January 13, 2012 at 5:53 pm | Permalink

      I think that this should be in the form of a citizen’s income with strictly enforced qualifications. The other savings in assessments will be good in the long term.
      I really wish that we could get these ideas embedded in the mainstream. Anything which cuts cost in administration through the tax system is good. I have never liked the complexity of all these complicated tax credits/working tax credits/pension credits etc. They are intimidating to older people and far too bureaucratic.
      The default position should be to allow people to retain their income rather than excessively tax them and then allow them to claim it back. It just creates non jobs which could be created in the productive economy if it was taxed less.

      zorro

      zorro

      • forthurst
        Posted January 13, 2012 at 9:53 pm | Permalink

        “I think that this should be in the form of a citizen’s income with strictly enforced qualifications.”

        People should not be entitled to a pension until they are of retirement age and have paid tax in this country during a whole working life.

        Politicians have completely destroyed the incentives for vast swathes of people to live productive orderly lives. For thousands of years people in this country were obliged to think ahead, to plan for the futures of themselves and their families in order to survive. They are now encouraged to adopt the horizon of a hunter gatherer for whom their pray are those whose cash cascades into their local benefit office after expropriation by politicians.

      • sm
        Posted January 14, 2012 at 11:04 am | Permalink

        Means test or not?

        Don’t we need to standback and review this from 30,000 feet.(or 10,000 meters if you like)

        Should not the governments tax and benefits policy needs to be rational, coherent, progressive and supportive of public policy as per its mandate avoiding peverse incentives. Should not all fall within guiding principles.

        We need to simplify where possible and be very wary of peverse incentives.(Hence principles)

        We have a benefits mess – means tested/not means tested (pip squeeking stuff not just (50%+NI 2%) ignoring the kink at 100k.) Some benefits taxable others not. Certain income taxable some not?The Lords daily allowances are taxfree? JSA is taxable? Some benefits paid oversees some not. Some pensions uprated some not and on and on.

        Personally this benefit should be thought of in context of benefit/tax policy in total and be coherent with IDS universal proposals. Some cross party principles should be agreed.(Get hold of Frank Field)

        In respect of Child benefit, it is inconsistent with other benefits? Paid to overseas dependents?

        I think we need a sustainable population strategy and this should be coherent with immigration policy. We should encourage sustainability and that means replacement only (approx 2 child benefits or equivalent). This imho will encourage social stability.

        So more coherent policies inline with policies and principles in the national interest not party interest. (Can parties agree principles agreed for tax and benefit policy – is that completely impossible).

        Should not a winter fuel allowance be zero fuel on a deminimus amount on electricity/gas use within the UK? If you migrate should you be entitled to a state pension?

        We should get the principles agreed, before we are forced by circumstances beyond our control!

        PS we should be losing more than 50 MP’s etc, given the EU increase in budget!!

  5. Bill
    Posted January 13, 2012 at 3:22 pm | Permalink

    Some of this discussion needs to be put in the context of Executive pay. Of course successful business people will look for big pay hikes if they know that all state benefits are going to be withdrawn.

    My son, who earns 100k per year, would not consider it worth changing jobs to anything less than 120k per year.

    • zorro
      Posted January 13, 2012 at 5:56 pm | Permalink

      With the tax position at the moment, I am not prepared to put in more hours than necessary. I am happy to forego income if it gives me more time to pursue family interests or other hobbies.

      zorro

    • Shade
      Posted January 13, 2012 at 8:02 pm | Permalink

      And there’s another bad feature of the tax system. He will pay 62% tax on the first £16k or so of a pay rise over £100k due to the withdrawal of his personal allowance. If tax rates are to increase over £100k, rising to 52% at £150k, the pa should be withdrawn at a rate of £1 for every additional £6 earned as opposed to £2 at present. This would equate to a rate of about 48% which would be a lot more rational.

      Toodlepip

  6. scottspeig
    Posted January 13, 2012 at 3:28 pm | Permalink

    I do think it strange that we as taxpayers pay for other people to have children. As I understand it, it was after the war when we required a population boost that it was introduced. As we no longer require a population boost, one would have thought we’d remove the benefit ASAP.

    Of course, you can’t do that, but you could announce that in 1 year, no more children would be eligible to start receiving the benefit – hey presto, 18 years later, there is no benefit! 🙂

    As for the claim that that is cold-hearted, I receive a healthy sum from it and would be a lot worse without it. Still, it really is daft that I get paid just to have a child!!

  7. A.Sedgwick
    Posted January 13, 2012 at 3:58 pm | Permalink

    The rethink should be on its demise not messing about with the niceties of higher tax breaks.
    From 06/04/2013 it should be limited to two children, existing payments remaining the same, for those living in this country and the amount frozen for all time. The savings should be a minute step to increasing the lower income tax threshold.

    • alan jutson
      Posted January 13, 2012 at 11:53 pm | Permalink

      A Sedgewick

      Agreed if you are going to pay a child benefit at all, then only for two children, alternative, one per adult, thus couples combined is limited to two children, single people to one child, then you are just being encouraged to replace yourself not extras.

      The real problem of eventual sustainability, is the growing number of people in the world, why encourage the birth of even more, making the problem worse for future years…

  8. Richard
    Posted January 13, 2012 at 4:45 pm | Permalink

    More fundamentally, why does the State hand out money to its citizens to encourage them to have more and more children?
    Its not as if we are short of people.
    Child benefit needs to be replaced with a simple tax coding adjustment giving parents a little more tax free pay.
    Those parents who don’t pay tax could have their benefits or tax credits adjusted.

    And in any event it should be only for the first two offspring.

    • zorro
      Posted January 13, 2012 at 5:58 pm | Permalink

      Immigration has formed a very large part of the population increase recently and this will be more so in years to come with births of their children in the UK.

      zorro

    • Bazman
      Posted January 13, 2012 at 7:17 pm | Permalink

      Then what? What would happen if you had more or adopted more by misfortune? Err! Have a think…If you think they should starve then say this. Failing that. Thanks for the input Dick.

      • Richard
        Posted January 13, 2012 at 9:42 pm | Permalink

        Bazman…You need to try to be constructive and state your own argument instead of launching into childish comments like some heckler at a political meeting.
        If you have a solution to this complex problem then lets hear it, as usual all you do is criticise others.

        • Bob
          Posted January 14, 2012 at 10:39 am | Permalink

          “Bazman…You need to try to be constructive and state your own argument”

          I suspect that would invoulve confiscation of wealth and the conversion of all stately homes into homeless shelters, including Buckingham Palace which would be be-draped with a giant likeness of the new head of state (Chairman Livingstone).

        • Bazman
          Posted January 14, 2012 at 2:05 pm | Permalink

          If I want to heckle you I will. Mr Redwood can moderate as he sees fit on his own site.
          If I had the answers I would not be where I am sat, but I do not come out with stupid simplistic right wing comments of stopping all benefits for having more than one child as if it where like taxing cars. Many of the commentators would not last a day without the various social support they get often through the middle class social security system. There is no such system? Yeah right!
          What is the family supposed to do if they find themselves with more children than they can afford? As I have mentioned before citizens in this country are entitled. Yes, entitled, to certain living standards whether they have earned this or not. Do you think anyone should just accept poverty and do you think punishing any family by financial means would work?
          Do tell us as you said in your previous posts that you believe this would help.

          • Richard
            Posted January 14, 2012 at 7:15 pm | Permalink

            Gosh Bazman… I really seem to have annoyed you, although I’m not certain you have read what I originally said.
            I was calling for the end to child benefit as it currently is paid, and for it to be dealt with through the tax coding system and the existing tax credits and benefits system.
            I think this would save a lot of Government money via lower administration costs.
            I never ever said I wanted to reduce child benefit rates, nor overall benefits rates, merely to change the way it is administered.

            Yes, I would restrict it to two children as I think this is fair but I am very aware you do not agree. Iwould bring this in gradually so as not to disadvantage existing large families.

            I think getting personal is always an illustration of a poor argument and please, dont accuse me of “wanting to see people starve” as its not what I said nor implied.

        • Electro-Kevin
          Posted January 15, 2012 at 12:31 am | Permalink

          I agree.

          We’ve been more than accommodating to Bazman and he’s turned childish. This is disappointing.

          We need more challenging lefties than this.

          Can you invite some over please, Mr Redwood ?

          • Bazman
            Posted January 15, 2012 at 4:55 pm | Permalink

            If you had to argue your shallow mean minded little ideas with someone with real political knowledge you would be taken apart. Even with my lack of education and low status job it is obvious that many of the post on here are middle class right wing wet dreams. Put forward by often one post wonders who don’t often get talked at by plebs like me. A new experience for them. Glad to help.
            Don’t see many challenges to my posts from you and a few others though. What does that tell you? I admit it is easy being right when often the points I am making are just about how unacceptable it is for small mean minded middle class men to put forward policies that they themselves will never have to live with the consequences of. Dragging millions into real poverty and the country into the third world, whist defending the rich who seem to think they are somehow hard done by because there is richer people than themselves and using the poor as a scapegoat for failed economic policies.

  9. Mike Stallard
    Posted January 13, 2012 at 4:55 pm | Permalink

    My wife has borne me four children and now I have five grandchildren too. As far as I remember, money didn’t come into it at the time of conception.

    Part of the problem seems to me to be the commitment of public money to people who will not vow to stay together to bring up their children as a team. “Marriage” is a naughty word now. I can call myself gay, or transsexual, or even (something else-ed) to anyone. But my wife is always my “partner”.

    What we really need to do is to arrange a system (not necessarily called “Marriage”) where two opposite sex parents swear, in public, legally, to stay together for life and to do their best to love each other. Two people of the same sex cannot possibly conceive and bear children and let us stop pretending that they can.

    If only people who took the sacred oath got the benefits, we would all be a lot better off. Ask any child, (yes, any child) if they want their Mum and Dad to stay together and love each other.

    Heavens above, sex and liking people and adopting children – even IVF – are way outside this equation. You can have everything you fancy without marriage of any kind!

    • zorro
      Posted January 13, 2012 at 6:03 pm | Permalink

      I remember a work colleague telling me 20 years ago that there was never a right time to have children, when I was deliberating about whether to wait until later when I was more established…..I’m glad I took his advice and had children early as I think that my parenting skills are better and I am still fit and well to enjoy life in my 40’s now that they are nearly ready to go to university.

      zorro

    • forthurst
      Posted January 13, 2012 at 10:26 pm | Permalink

      Mike, you will be continue to be perplexed by the assault on Western culture and values until you put on your historian’s hat and trace the origins and development of Political Correctness from its inception in Frankfurt until the present day.

  10. Daedalus
    Posted January 13, 2012 at 5:15 pm | Permalink

    Personally I think that if we should have a child allowance at all, it should be for the first two children only. They could bring this in with 10 months notice, after that it only applies for any additional children under the age of 16 who were born before the cutoff date, so if you had 4 kids before the cutoff date they would still get it as now. If you have a 3rd child after the cutoff date then you get nothing. For families with an income of over 2 times the average wage then no child allowance at all after the cutoff date for all new children but any they already have get paid as above. It will take 16 years for it to fully flow through the system but you will start making big savings in 10 months. So in 16 years time you get child allowance for 2 kids as long as the family income is less than 2 times the average. I suppose you could put some form of slider in so that the allowance reduces in line with any increase above the average wage so that a family with with 2 times average plus a £1000 losses only the £1000 of child allowance leaving the neutral but it seems to be a lot of effort.

    Daedalus

  11. Bernard Otway
    Posted January 13, 2012 at 5:39 pm | Permalink

    As I have said before in answer to many and ALL subjects,the people of most countries are TRAPPED IN A MATRIX created by the ruling class.Designed to extract revenue in the form of tax,to fund all the harebrained and crackpot schemes,to keep the populace trapped by need
    for BENEFITS from a CLIENT class,while keeping the client class completely enslaved by those BENEFITS. The Machines in the films of THE MATRIX at least EXTRACTED the surplus electricity from a different species to them,and the electricity was necessary for their
    SURVIVAL,ie PARASITE AND HOST.In our case the PARASITE is the STATE and the HOST is ALL OF US. ONE DAY!!! a RECKONING WILL COME and IT WILL NOT BE PLEASANT.

    • Electro-Kevin
      Posted January 15, 2012 at 12:34 am | Permalink

      We’d all be richer if we’d taken the blue pill, Bernard.

      • Electro-Kevin
        Posted January 15, 2012 at 12:42 am | Permalink

        PS – How can one be ‘enslaved’ to benefits, Bernard ? An oxymoron surely ?

        PPS – I think you need to have someone look at your Caps key. Either that or have your blood pressure tested.

        (I do worry about you taking things even more personally than I do sometimes.)

  12. Rebecca Hanson
    Posted January 13, 2012 at 6:22 pm | Permalink

    This is sensible thinking.

    How do I find out if I’ll be getting any child benefit this month or not?

  13. Jon
    Posted January 13, 2012 at 6:51 pm | Permalink

    I suppose it will be in the detail. A single earning household will receive nothing on £45000 but if they earn £49000 then they basically take home the equivalent that child credits would give them so is that the window? Another way of looking at it is that if a joint earning couple loose it at £80000 then should a single earning couple keep it to that limit?

    Whatever is decided I hope HMRC does not look for millions more to administer this. Any private company constantly takes on changes and additions that are assimilated into the same cost base.

  14. ian wragg
    Posted January 13, 2012 at 6:54 pm | Permalink

    I bet the ones getting rent paid at £2K per week and having kids like shelling peas continue to draw max benefits.
    Some cultures think it only correct that the workers support them. Thats what being a multi-cultural country means today.

  15. lifelogic
    Posted January 13, 2012 at 6:58 pm | Permalink

    No tax system should have arbitrary thresholds (or indeed dates and ages) with big tax jumps like the 1%, 4%, 5% stamp duty thresholds and the ones you mention above. It should be mathematical a formula that rises smoothly. So as not to distort behaviour too much nor encourages cheating like the £100K of curtains and furniture.

    Not that one should even have turnover taxes like stamp duty anyway.

  16. Bazman
    Posted January 13, 2012 at 7:13 pm | Permalink

    Maybe parents should be taxed more for having children as they use more. Lets make the fundamental basis of society. ‘The user pays.’ ‘Who is against this common sense idea? This could be easily organised by using the existing tax code system.

    • Electro-Kevin
      Posted January 14, 2012 at 1:14 am | Permalink

      Do we want working people to reproduce or not ?

      Or have you just got used to the idea of just importing the workers you need ?

      The problem is that the proposals – unless reviewed – will look and feel more like tax increases than benefits reduction.

      Part of the Nu Lab poisoned chalice I’m afraid.

  17. Iain Gill
    Posted January 13, 2012 at 7:17 pm | Permalink

    I have paid for other peoples family allowances big time over many years and now I have a kid of my own you want to take it away? what exactly am I getting out of the system? I cannot get to see a doc when I’m serioulsy ill and have to go private, I cannot get any benefits when unemployed as I have been silly enough to save a bit, I dont get much for my massive tax contribution

    Bad idea, cut the “aid” budget first, cut the funds to Europe, cut the funds to the IMF, cut the tax dispensations to foreign national workers in this country, dont be silly and mess around with family allowance.

    If ever anything showed how badly out of touch a bunch of public school boys running the country could get this is it.

  18. Anthony Harrison
    Posted January 13, 2012 at 7:34 pm | Permalink

    I think Mike Stallard’s post is, unusually, way off beam. Rather than gross interference with the purely private domestic arrangements of citizens who choose to live together long term, or not, by coercing them into some sort of loyalty oath (ah, wasn’t it Captain Black’s Great Loyalty Oath Crusade, in Catch-22…?), the State should simply refrain from subsidising people’s reproductive choices. It is absurd that citizens should receive some of their own money back (or in far too many cases, their fellow citizens’ money) in order to pay them to have children. In my old fashioned way I think if people can’t afford to bring up children, they shouldn’t have them. Contraception is available to everyone.
    And I was struck by Paul Danon’s post too. Never mind me, what about my 84-year-old mother? She has to pay tax on my late father’s RAF pension, which is iniquitous in itself since he served his country for nearly 40 years to earn that pension; and that some of the tax she pays goes to subsidise the childbearing of the feckless or terminally stupid makes my blood boil. It is very, very wrong.

    • Gareth
      Posted January 14, 2012 at 12:21 am | Permalink

      “the State should simply refrain from subsidising people’s reproductive choices. ”

      I agree. And there is a way for the State to retreat from that part of our lives that does the least harm – keep paying child related benefits for those currently receiving them but have no more claims for children born after 9 months from now.

      This would recognise that the present system alters the choices people make *and* that it would be unkind to suddenly withdraw those welfare payments from people who are receiving them now, and also introduces a cut off point for that distortion which would apply to everyone regardless of income.

      • Bazman
        Posted January 14, 2012 at 3:15 pm | Permalink

        What is the case if an old woman ‘chooses’ to live in a shoe due to the amount of children she has and the accommodation problems associated with this. Starving and beating them can hardly be considered a solution even in the short term.

  19. JimF
    Posted January 13, 2012 at 7:46 pm | Permalink

    The key here is to support the bringing up of the future generation, without encouraging profligate child bearing or a cash 4 kids culture.
    Possibly the best way is through vouchers for kids clothes, music lessons, sports, or other activities until they are 18.

  20. Michael Paskauskas
    Posted January 13, 2012 at 7:49 pm | Permalink

    Child Benefit for those receiving £40,000 per year and more? Why?

    • Rebecca Hanson
      Posted January 13, 2012 at 9:09 pm | Permalink

      Because my husband has to live away to earn that salary and we’re stretched to the max to cover our costs and we’re decent honest hardworking people who plan our finances carefully and are going to struggle with this sudden cut in income?

      • Bazman
        Posted January 14, 2012 at 3:34 pm | Permalink

        You can keep yours then Rebecca. Proof will be required of your respectability, which we are sure is just a formality in your case. Points will be awarded by a board of respectability in your area and future payments will then be based on this. Marriage status, income, Cleanliness of children and house in particular will be taken note of. Any activities such as witchcraft and rumors of entertaining men will result in suspension of payments and possible prosecution by the Witch Finder General. Mr M. Hopkins will oversee at a national level. Separate rules will apply to men and labour voting areas.
        As an incentive you may even be able to keep any future lottery winnings if respectability certificates are up to date.

    • alan jutson
      Posted January 14, 2012 at 9:10 am | Permalink

      Michael

      Child Benefit rules should apply to everyone or no one, Simple.

      If you are going to have child benefit it should be limited by numbers, as the first child is the most expensive, one partner usuallyhas to give up, or moderate work for a chosen period.

      When we decided to start a family 36 years ago, child benefit was not even in our equation, we started a famiy when we thought we could afford to keep one, my wages were at that time just a fraction above the UK median wage, my wifes at the time a fraction below.

      We had been maried for 3 years, had established ourselves in our house, with both myselfand my wife working hard and had a little, (equivelent to 6 months earnings at the time) Our decision was made on the basis that my wife would stay at home until they started going to school, and if we started running out of mone then I would take on a second job.

      Clearly this solution is not for everybody, that was our decision, but really why should the state offer big incentives for people to have an unlimited amount of children.

      • alan jutson
        Posted January 14, 2012 at 9:12 am | Permalink

        Oops missed out (savings equivelent to 6 months earnings at the time)

  21. Martin
    Posted January 13, 2012 at 7:57 pm | Permalink

    You might have a choice here of sticking with oroginal proposal or getting into household taxation. Household taxation could well be an even bigger pandora’s box of regulations (red tape) and privacy issues.

  22. uanime5
    Posted January 13, 2012 at 8:37 pm | Permalink

    The first problem can be solved by using total household income, rather than the income of the highest earning parent. The second can be solved by phasing out child benefit at a rate of £1 for every £2 earned.

    • Mark
      Posted January 14, 2012 at 12:00 pm | Permalink

      So long as you count the absent parents in single parent households as part of the household while they are still living. Not sure that £1 for £ 2 helps much – you are starting with employee income tax and NI of 42%, so the total marginal effective rate is 92%.

      • uanime5
        Posted January 14, 2012 at 6:24 pm | Permalink

        I’m not sure how you’ve miscalculated the total marginal effective rate. £2 minus the 42% in tax leaves you with £1.16. So for every £1 in child benefit you lose you gain £1.16 from working, making you 16% better off.

  23. yudansha
    Posted January 14, 2012 at 12:39 am | Permalink

    The greatest fib is that the threshold £42,300 makes one rich. That all depends very much on location, number of dependents and age (when – if – the family home was bought)

    I for one am continually brassic and find my taxes paying for things such as free school meals which I cannot afford to buy my own children. I don’t mind helping the genuine poor but why am I anywhere near the 40% tax bracket ?

    The plans are to limit welfare to £500 per week. We can assume that there are many benefit claimants over this amount on more than £42,300 pa and yet they can claim poverty.

    It is also galling to work at a place where partnered people (doing the same jobs on the same 40k-ish salary) have had children together, are doing the maternity entitlement thing and have been especially accommodated around childcare hours having sent their children to nursery with state vouchers – a lifestyle chosen so they can buy the dream house with country kitchen and Aga…

    …and all the while they’re doing this the fathers of traditional families (who are scared to do overtime) are bumped on to nights and other unsociable shifts to cover the double-earners.

    Guess who loses the child allowance ?

    This country is anti traditional family every step of the way. No wonder there is so much dysfunction in it.

  24. Bob
    Posted January 14, 2012 at 10:24 am | Permalink

    I detect the dead hand of the Lib Dems in this policy.
    The obvious solution would be to limit the benefit to two kids unless they were born say 12 months after the date of the change, and no more annual increases for anyone, ever.

    This would lay the foundations for a phasing out of this anachronistic benefit.

    Then perhaps we could stop paying for IVF. If you can’t afford the IVF yourself, how can you afford the resulting offspring?

    There’s no money left, we’re having to borrow to fund all this nonsense!

  25. Alan Wheatley
    Posted January 14, 2012 at 10:33 am | Permalink

    The “falling off a cliff” effect would not occur if the benefit is taxable.

    I appreciate that higher rate taxpayers would receive a benefit some claim they should not have: the higher the income the more insignificant the benefit becomes, BUT also the higher the income the bigger the tax take.

    We all gain by avoiding the complexity and administrative costs of means testing and tapered reliefs.

  26. David John Wilson
    Posted January 14, 2012 at 11:28 am | Permalink

    Child allowance and most other benefits should be made part of the income tax system. This means that means testing becomes automatic and the costs of distribution are reduced.

  27. Barbara Stevens
    Posted January 14, 2012 at 1:48 pm | Permalink

    I must say I agree with ‘disaffected’. Firstly, I’ve worked in CAB for many years, but not now, and saw with my own eyes what poverty meant to many people. However, I also saw what having to many children did, and how they could not support themselves, and many had no intention of doing so, did to their living standards. Many had different fathers, or had no idea who the fathers were. I’m talking here of four and five children a time. There appeared to be no moral or social responsiblity on the adults part, but the expectation that the state would provide for their lifetime of need. When you come to the better off, well I can understand the arguement. Its the circumstances of the family unit we should look at. Who should provide support etc. Fathers. Mother’s who work should have the help from the absent father’s financially. In the working class society often the father’s don’t work either. Therefore, I believe limiting the numbers of children the state should be expected to support continually should be taken into account.
    Another problem as now arisen. (problem of large families and more than one wife-ed) We keep them via taxes and the children they have. Often several. This money is taken from them, pooled, and propeties are bought, rented out, often cheap properties and benefit claimants rent them. We, the taxpayer land up paying twice, benefits and housing benefit. We are being drained all ways, it’s the benefits system that as gone haywire. How am I sure of this? I live where it’s happening, see it with my own eyes, and it makes me angry that this nation is being ripped off in such a way. Plus the fact we have our own citizens unable to afford to rent or buy houses. We need a government with enough courage to stop this, full stopl

  28. David
    Posted January 14, 2012 at 8:00 pm | Permalink

    “This could be a perverse incentive to avoid promotion or extra pay. That too needs examining.”
    Could be? I have already decided not to try for jobs further away because the extra pay needed to make it worthwhile (I would need to commute) would mean than I would go into higher tax and lose my child benefit.
    I could get a job paying £5k p.a. and because of child benefit and commuting costs be worse off.

    It is madness.

    John feel free to email me if you want full details

  29. Anne Palmer
    Posted January 15, 2012 at 2:41 pm | Permalink

    Benefits should be equally available to ALL.

    There are 827 people at present in the House of Lords and there is talk-as I understand it- of clearing them all out and filling it with others. While I respect the very good job they do-most of the time- there should be no changes in there until all our debts are cleared. Since the Hereditary Peers were (disgracefully) sent away, the House of Lords appears to have been used to fill it with those that didn’t “make it” to the House of Commons. So much so has this once highly respected House seemed to have been abused, perhaps it is time it was ‘done away with’ altogether-at least until we are free from foreign Rule and are able to Govern ourselves completely and we can afford such luxury. Sadly, maybe it may die of shame itself, before it is rejuvenated?

  30. Conrad Jones (Cheam)
    Posted January 18, 2012 at 4:56 pm | Permalink

    With an increase of the World’s Population of one billion people in just over a decade, is it ethical and logical to provide Tax Incentives for People to further increase the World’s Population – with all that entails.

    Cut ALL Child benefits and reduce taxation by an equal amount.

    The Government should keep it’s nose out of a peoples’ decision to have children or not. If we weren’t being overtaxed to start with they wouldn’t have to helped parent’s (who are short of cash) in the first place. And how many single parent families are created through this idiotic Socialist Benefit?

  31. Conrad Jones (Cheam)
    Posted January 18, 2012 at 5:23 pm | Permalink

    Is there a tendency for Politicians to crave unfairness in the system so as it can offer remedies – such as stripping us of our Taxes then giving it back to certain groups inorder to carry favour at General Elections?

    Is Child Benefit required to remedy unfairness in our Country or provide money due to a constant shortage in our money supply? Is it designed to encourage people to have children or bail them out due to lack of money in the first place?

    Will amendments to Child Benefit discriminate against the Middle Classes in favour of low intelligence, low wage, low ambition types of people. After Tony Blair saying we need “Education, Education, Education” , are we now saying “We need ditch diggers too”, we therefore need to breed more workers.

    Spend the money on Schools and reduce cumbersome Teaching curriculums that shackle Teachers into doing no more than thought control at State Schools.

    If House Prices weren’t so expensive, we wouldn’t need or these rediculous benefits which just breed dependence on the State while ignoring the Systemic Faults in the System. It’s all about the money. Fix that first then other issues will be possible.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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