Knowing why we oppose

Every Labour activist I know opposes the proposed Child Benefit cut for higher tax earners.

I do too.

But why do we oppose it?

There are two possible reasons:

First, we might regard the principle of universality is central. This would lead us to argue that money paid to all increases benefit take up, encourages all to have a ‘stake’ in the system, and means all children get support.

Further,we could argue that the apparent ‘waste’ of giving child benefit to high income families is largely an artifact of the system – those high income families who contribute via taxes would likely share in any benefit from the reduction of their own benefits, and do in fact gain from the administrative simplicity of universality.

If we sought to limit the fiscal gain of high income families, the obvious move would be an increase in Taxation, preferably at a level above that of £40,000.

Alternatively, we could say that in principle it is foolish for the state to distribute limited resources to high income families who, largely, don’t need the additional income.

Further, we could agree that in a society much more capable of tracking individual family incomes than sixty years ago, the administrative and social benefits of universality are overstated. Targeted interventions are more effective use of resources.

Having said all that, we could argue that the issue is therefore not the principle, but the implementation. That it is unfair to treat single earner families more harshly than dual earner families and using the Tax system creates a cut off point for benefits which is both far too low for single earner families* and represents a significant disincentive to increased income, especially for ‘Traditional’ families.

It strikes me that these are very different reasons for opposition, and following either creates a different range of policy options for a future Labour government.

Labour’s policy position is that we would like, in principle, to return to universal child benefit, but cannot commit to doing so because we cannot know the future.

This is an entirely reasonable position, but has the consequence of not setting out why, exactly, we oppose the Governments policy. Our attitude could be either of the two I have set out. I’ve heard both used, by the same person in the same interview.

There may well be a political advantage (unity, flexibility) for avoiding the question of why we oppose the government this week.

There will not be a long term governing advantage.

 

———–

* Though note, dual earner families are far more likely to face high childcare costs and therefore to “need” child benefit, which is an argument I am amazed I have never heard a government minister make

2 Responses to “Knowing why we oppose”

  1. Brian Hughes

    I am a Labour activist* and I think the proposed Child Benefit cut for higher tax earners is a good idea.

    According to a Populus poll, 82% of the Great British Public agrees with me. So not all that much political advantage in opposing it, no matter how reasonable the reason for so doing might seem to some to be, that I can fathom.

    * (v1) “used to be” might be nearer the truth (it is apparently (at least as E Milliband kept telling us in the Brown era) time for the next generation to take over).

    * (v2) why does that sound so much like a statement that might be made on a first visit to a meeting of recovering addicts?

    Reply
  2. Matthew

    “dual earner families are far more likely to face high childcare costs and therefore to “need” child benefit”

    though note that (say) two £30k earners will pay about £4,000 less tax a year than one £60k earner, and get £800 or so back for childcare.

    Reply

Leave a Reply