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Capping benefits (and families?)

Stephanie Flanders | 15:24 UK time, Monday, 4 October 2010

As predicted, the chancellor had some more bad news for families on benefits in his speech this afternoon: from April 2013 there will be a cap on the amount that any non-working family can receive. I've now got some more details of this policy - and some initial thoughts on the implications.

Man and boy count money

 

The Treasury is talking about an "indicative" level of the cap of around £500 per week - or £26,000 a year - which is its forecast of what the median working family will be earning, after tax, in 2013-14. If the cap were set at this level, they reckon that up to 50,000 families would be affected, and the savings would be in the region of £300 million a year.

So, we should say first that we're not talking big bucks. For reference, Mr Osborne is expecting to save £3.9bn - £3900m - in 2013-14, simply from uprating benefits to CPI rather than RPI. The total benefit bill this year will be around £270bn.

There are three reasons why families end up receiving a lot of benefits. First, they have special needs - for example, a disability - and are therefore thought to face extra costs. Second, they have very high housing costs which are subsidised by the government. Third, and most important, they have a lot of children.

By excluding families claiming Disability Living Allowance, the government is giving some protection to families in the first category - though it's worth pointing out that other benefits such as Carer's Allowance and Industrial Injuries Disablement Benefit will be included.

Housing benefit is the second way that the benefits for a single family can add up. There will probably be many among those 50,000 families who live in south-east England or live in those very large houses in Chelsea which feature regularly in the Daily Mail.

But, remember that 50,000 is the number the Treasury expects to be affected in 2013 - after the introduction of sweeping cuts to housing benefit which, among other things, will cap the amount that families can receive from this single source at £290 per week for a two-bedroom property and £400 per week for four bedrooms or more. The implication is that rather more than 50,000 families would be affected if the cap were introduced now.

One key conclusion is that most of the families who now earn a lot of benefits will see their payments  cut long before 2013, as a result of the housing and other cuts already in train, which by 2013 will be saving £8bn a year.

Seen in that light, the cap on the total amount of benefits any one family can receive is almost a "mopping up exercise" - a symbolic effort to ensure there aren't any shocker case studies left knocking around for the Daily Mail.

The other key conclusion is that the vast majority of the families who will be affected by this cap will be households with a large number of children. After all, the cap will be set with reference to the net earnings of the "median working family", not the median working family with the same number of kids. By design, families with an above-average number of children will be relatively penalised.

That will not concern the editorial-writers at the Daily Mail or, perhaps, many in the hall in Birmingham. But it could provide some awkward case studies when the reform comes in.

Mr Osborne says he wants to cap the total amount of benefits that non-working families can receive. The effect will also be to cap the number of children that the government is willing to support, in households in which nobody goes out to work.

Update 1637: As suspected, the child benefit change hasn't gone down well with tax and benefit purists, who don't like the idea that a couple with a combined income of £80,000 will still get the benefit, whereas households with one earner on a similar amount will have it taken away.

As I said earlier, this is because the Treasury was looking for something simple. But if you remember, child benefit was originally introduced to compensate families for the loss of the child tax allowance. In effect, it was supposed to be the state's way of saying  that (a) society benefits from people having children, and (b) families with children face higher costs.

Today the largest extra costs are usually child-care expenses - and those, in turn, are often higher in families where both parents work. So you could argue that there is some rough justice in allowing dual-earner households to keep the benefit, even if their total income is more than £45,000. But high earning single parents will still lose out.

A bigger objection, to the likes of the Institute for Fiscal Studies, is the odd earnings barrier that it creates for people who are now earning just below the higher rate. Under the new system, a person in that situation would have to think hard before taking a better-paid job or accepting a raise. In fact, if they have two children, they would need to be making an extra £2,975 a year to see any increase in their net income at all.

Mr Osborne could have avoided this problem - and raised a similar amount, £1.1bn - by simply taxing child benefit. That would have maintained the universal principle, but it would also have created a lot of losers further down the income scale, who only pay basic-rate tax. You can see why he wouldn't want to do that. But it's ironic that he's introducing a more-than-100% marginal tax rate for people just below the the higher-rate tax threshold, just as Iain Duncan Smith is pledging to get rid of high withdrawal rates for people on benefits.

Comments

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  • Comment number 1.

    "The effect will also be to cap the number of children that the government is willing to support, in households in which nobody goes out to work."

    About time too. The benefits system is supposed to be an emergency lifeline when you are desperate, it is not supposed to be a career choice to stay home and have enough kids to get you a decent standard of living.

    If we can get back to the situation where people see benefits as a last resort then maybe we can afford to pay those people a decent amount.

  • Comment number 2.


    Excellent news. At last, a workable plan to reduce the number of state-dependent children and break the cycle of dependency that is currently being handed down the workless generations. I'd like it to be introduced tomorrow, but at least the longer leadtime gives the affected claimants a chance to make an appointment at the family planning clinic.

  • Comment number 3.

    Well it's about time something like this was done. Though in my opinion the cap is still too high. There is simply no excuse for those that are on benefits to live in expensive areas or to have many children. Cut the benefit and I'm sure you'll soon see an end to the large families that do indeed feature in the Daily Mail.

    Of course the real issue here is still that people are better off on benefit than working a minimum wage job - this is disgraceful. I would suggest capping the limit to be slightly under minimum wage over a 40 hour week (excluding those on disability).

  • Comment number 4.

    The problem is that if you get £26,000/year in benefits, most of that is non taxable, and that that is falls close to the tax free limit anyway

    Housing benefit isn't taxable and that is the largest contributor to income along with council tax. £10k per year rent + 1.5k for council tax is an average rent for 20 year old couples with no jobs and two kids. Add ~2k in Child benefit and they are already taking in more money than someone on £18k a year.

    £26k net is equivalent to around £35k gross, a salary most people would love to have. If only the people who worked were so lucky to have their largest outgoings paid before being taxed.

    This is a start, but it is not enough. If you want a nice house/ flat it is easier to leave work and get the government to pay for it than it is to pay for it yourself. £400/week is too high for housing benefit. If you don't have a job and don't have any money why are you living in Chelsea?

    £1000/month for rent should be the tops, and I'm being generous there. There are plenty of properties in this country that fit that criteria, I'm sorry they are not next to Mayfair though.

  • Comment number 5.

    Lots of benefits are paid to families with:

    (a) disabilities
    (b) high housing costs
    (c) lots of children.

    Given the alarming population growth estimates it does seem reasonable that govt limit the support for large families. But just wait for the outcry and headlines such as "govt benefit cuts lead to starving children"

    Housing benefit has long been known to be completely out of control. Large families end up renting houses costing thousands of pounds a month and expect govt to pay. Even worse because govt pays the tenant not the landlord there is a high chance of fraud and landlords have to charge a bit more to compensate for risk of tenant not paying over the benefit. Mind you govt policy over the last 100 years to private rented sector has ranged between the truly insane and the totally stupid.

    Disability is the difficult one. I fully support families with disabled children being given govt support. In some cases this support can be limited to paying for appropriate changes to the family home, in some cases it will need longer term support. As with adult disability the trick is not to create a system where the disabled are permanently left in a benefit driven culture and convinced that there only lot in life is to sponge off the state. I know a number of blind people who take great offence at the idea that they are not fit for a lot of jobs

  • Comment number 6.

    Just a couple of thoughts:

    1. If you change anything first make sure the new administrative system is tested - FAIL (and this is catastrophic - but typical of all the amateur politicians in all parties.)

    2. Benefits and Tax need to be merged with a National Minimum Income and a Nation Maximum Income system. Everyone (new babies to centenarians) needs to fit in the system so that no one gets less than the minimum nor more than the maximum and that special needs are met.

    We need a public debate about the levels and mechanisms. The scheme need to be 'parallel run' in shadow form for a couple of years at least alongside the present system to prove that it works and to iron out the glitches in the administration and the unintended consequences. Then we need a phased introduction over a few years. That is real reform anything else is amateur tinkering and will be a disaster! (I hope IDS agrees!)

    (By Income I mean pay, benefits and unearned income - everything!)

  • Comment number 7.


    So now the Tories are practising eugenics and specifying who can and cannot breed based on a maximum level of benefit ?

  • Comment number 8.

    An intersting analysis. Given that welfare changes although techncally devolved in Northern Ireland are adhered to in practice the differential adverse impacts on families with more children could provide some special difficulties for the local Minister Attwood from the SDLP. Under NI equality laws (enshrined by 1998 Westminster legislation which anchors the Belfast Agreement) there will be a requirement to put the new proposals through an Equality Impact Assessment. The analysis will undoubetedly show a differential adverse impact on Catholic families which are still larger on average than those of Protestants. Under the legislation the Minister is required to seek to ameliorate any adverse impact that is identified or change the policy. The NI impact will therefore have a distinct sectarian dimension and could cause political difficulties.

  • Comment number 9.

    Look at all the commentators in the "Latest from BBC News blogs". Loads of 'em. I think the government may be spreading the pain their way too. I'd suggest that this parade of six (check out Harding's dire post) is the best depiction of state spending gone mad that one could ever hope for.

    Let's simplify all the rules, then sack all the paper shufflers, and cut the BBC. Only then can we let those that make stuff happen get on with creating jobs rather than taxing the nation to death to keep people in a job who could not cut it in the private sector. And if they can cut it then they'll get a job, so np.

  • Comment number 10.

    Since when where Children ever an affordable option? Also, isn’t baring children a human right? (if not, why do we have IVF on the NHS?). This isn’t some bizarre reversed “Logans Run” you know where some children are deemed excess by the state and culled! The crux of the matter is that there are too few jobs with sufficient wages out there..simple as that. IF these fabled families on these levels of benefits do manage to move to cheaper areas…wouldn’t areas of London become a ghost town? Aren’t levels of rent and property values in these areas the REAL reason for this excessive spend? Why not tackle that, reduce the inflated and un-viable rents and you have an immediate and CROSS THE BOARD reduction in benefit costs without the social fall out.

    I am greatly concerned about families with REAL needs being hit. There is “some” protection for those most in need (disabled for example) but no where near enough, how many ex-servicemen’s families will be effected for example? They are not supported well enough by the MOD, the state is often a lifeline for them..a final one.

  • Comment number 11.

    A few years ago my son came to live with me. At the time I was with a company who were growing and paying increased wages. Due to benefits issues I eventually contacted a friend who worked as a benefits adviser and constructed a spreadsheet whuich calculated for each level of wages what mt net income would be. The results were illuminating: between £70 p.w. and £220 p.w. my net income was virtually constant, i.e. tax increases and benefit clawbacks approached 100% of income. (Yet we have people whingeing about paying 50% on much larger incomes!) I had to tell my employer that there was no incentive for me to earn more unless they could pay more than £220 p.w. In my case I was able to get a job at a salary which made me better off, although it involved much travelling and arriving home sometimes after my son had gone to bed, which meant I couldn't spend the time with him I would have preferred. If this is the first step towards a more sensible system that restores work incentives while balancing family needs (how about £10 p.w. minimum wage?) then I welcome it.

  • Comment number 12.

    Fabulous oxymoron in the article: "who earn a lot of benefits"

  • Comment number 13.

    According to the ONS:

    Year 2007 – 2008
    Gov’t debt = £527bn (excl financial sector intervention)
    Gov’t debt = £614bn (incl financial sector intervention)

    Year 2008 – 2009
    Gov’t debt = £617bn (excl financial sector intervention)
    Gov’t debt = £707bn (incl financial sector intervention)

    Year 2009 – 20010
    Gov’t debt = £777bn (excl financial sector intervention)
    Gov’t debt = £1004bn (incl financial sector intervention)

    There is a consensus that ‘something should be done about it’.
    And we are now being asked to consider how we can cut our debt.
    Which is not an unreasonable question given the figures above.

    But up to press, none of the politicians or journalists for that matter, have asked the question:

    Why is the Government always in debt?
    Why even in prosperous times are they in debt?
    Why given that the Government has the absolute right to issue its own currency and not borrow it from anyone, does it choose to let banks create it from nothing and borrow it from them, and then pay interest to them for doing so?

    The links to help understand this are shown below:

    A short animated film by Paul Grignon, ‘Money as Debt’ (link below).
    http://www.youtube.com/watch?annotation_id=annotation_942534&feature=iv&v=z5vC_8azMFk

    The documentary Secrets of OZ (link below)
    http://www.youtube.com/watch?v=D22TlYA8F2E

    The mystery of banking by Murray Rothbard (320 pages pdf)
    The link to this is usually blocked by the moderator, so I won’t post it.

    Groups wishing to make changes to the system, see links below.
    http://www.bankofenglandact.co.uk/act/
    http://www.prosperityuk.com/prosperity/prosperity.html
    http://www.positivemoney.org.uk/

  • Comment number 14.

    I posted earlier on the Child Benefit post, finding out that we will be losing our 'allowance' for having children to keep the potential future of this country going....to now find out that 50000 families in this country get more than 26000 tax free per year! I may as well quit work and live on benefits if this is the case.....I fall straight into the category of 'EARNING' 44,000 a year with my wife being a full time mum for my two lads.

    WHAT IS THE POINT!

  • Comment number 15.

    @ #7 SotonBlogger

    "So now the Tories are practising eugenics and specifying who can and cannot breed based on a maximum level of benefit ?"

    No they are not. They are specifying how much they have to pay out for those irresponsible enough to bring children into this world with no means to pay for them. Why do you think the taxpayer is responsible for paying for this? It is still very much personal choice to have children or not, but if they do they will have to make some sacrifices to get by - similar to the way working folk have to.

  • Comment number 16.

    'One key conclusion is that most of the families who now earn a lot of benefits'.
    Is this BBC speak? surely you mean 'claim' benefits rather than 'earn' benefits. I was not aware that benefit claimants had to do some work or service to the community in order to qualify for benefits, but it sounds like a good idea.

  • Comment number 17.

    "(a) society benefits from people having children"

    So people wouldn't have children if there was no child benefit? Do we really want to encourage people with poor work attitudes to fund their lives with children?

    I know the current Ponzi pension scheme requires the future population to be larger than the current but surely we don't need people being paid just to reproduce?

    If our benefits bill was lower, maybe people who worked would be able to afford to have kids through less taxation.

  • Comment number 18.

    If you can't afford kids, don't have them. Seems like a clear enough message. Contraception is effective and free - there is no way the taxpayers should pay towards the bills of anyone who decides to have children.

    Do we then force people to move to a smaller house or a less affluent area if their benefits no longer financially support their current residential arrangements? The answer must be yes. And there's nothing wrong with that.

    The big problem arises when parents put their lifestyle before their children's needs. Perhaps vouchers is the way to go for child-related benefits (or virtual vouchers on a plastic card which can only be used for certain types of goods).

  • Comment number 19.

    Long overdue - let's hope there are more radical in-roads to the vast welfare budget to come.

  • Comment number 20.

    I tend to agree with comment number 9 from Ben. This blog is titled as one about economics yet these days it mostly discusses politics. When unemployment or inflation figures emerge we get no comment but when there is a political story we get 2 in a day.

  • Comment number 21.

    I'm glad to see the government is tackling the ludicrous benefit system, where it can be better to stay at home and breed children than go out earn a living and contribute to society.

    Yes the government will risk tabloid headlines of cutbacks hit innocent children. But the hard working civilians of this country cannot and do not want to support this benefit culture any more. By making these savings now and reducing the national debt I hope that in years to come the government will be able to offer lower taxes to the lower paid and make it even more beneficial to work than live off the state

  • Comment number 22.

    Child benefit should be capped at age 16 and limited to the first two children. We need to tackle the problem of all these teenagers having children and living off the state.

  • Comment number 23.

    Over population of the planet is a major cause of climate change and we should not be using the benefit system to promote it. The green policy here would be to limit the benefit to two kids per new claimant.

    As for benefit caps, they are a great idea, but I fear they are set far too high. Housing benefit should be limited to the cost of renting a two bedroom house in the NE of England. If you don't want to work in a high cost area where jobs are available, then you should move somewhere cheaper.

    Total benefits per person should be limited to a level where someone working 40 hours a week on minium wage is clearly better off than some one who is not working. A figure of a 150 per week + child benefit seems more than generous.

    The housing benefit system has lead to inflated rental prices in large areas of the country, as those who work have to compete with those who live off the state. Scaling it right back will be a great help to those on low incomes as rental prices slowly start to decrease to more affordable levels.

  • Comment number 24.

    "Given the alarming population growth estimates it does seem reasonable that govt limit the support for large families."

    ONS 2008:
    "The population of the UK is projected to increase by 4.3 million over the next 10 years from 61.4 million at mid-2008 to 65.6 million at mid-2018, an annual average rate of growth of 0.7 per cent. It is projected that the UK population will be 71.6 million at mid-2033, a total increase of 10.2 million over the next 25 years."

    "Some 45 per cent of the projected 10.2 million increase in the population between 2008 and 2033 is directly attributable to the assumed level of net inward migration. The remaining 55 per cent is attributable to projected natural change (an excess of births over deaths) of which 32 per cent would occur with zero net migration. The remaining 23 per cent arises from the effect of net migration on natural change. It is estimated therefore, that some 68 per cent of projected population growth in the period to 2033 is attributable, directly or indirectly, to migration."

    Even if you consider a 70m population alarming, child benefit clawbacks probably won't dent it much. It will increase social division by increasing the perception among middle class families that they are paying more and getting less, while the "workshy" pay nothing and get everything. Taking a penny off the standard rate later won't address that resentment.

  • Comment number 25.

    SotonBlogger wrote: "So now the Tories are practising eugenics and specifying who can and cannot breed based on a maximum level of benefit?"

    It would be pretty unlike the stereotype of a Tory government to "practice eugenics" by only encouraging procreation by the lower-class, surely?

  • Comment number 26.

    Ah yes, Jizzlingtons: it's not often that we see so clearly as we do in your argument that children are a purchase like any other. only to be allowed to those fortunate enough to be able to afford them. If I earned more, could I get some better ones? or is it just more of them? I guess there aren't too many people on benefits in your area, either, otherwise you might be a bit less inclined to assume they aren't making sacrifices. Also, Saltfordman, last time I looked bringing up a family was both a kind of work and a service to the community; on the other hand, I don't believe I've met your children, so you may be right.

  • Comment number 27.

    something has got to be done about benefits for people who choose a jobless lifestyle and this is a start. Millions of us are totally fed up with bearing the cost of these people and others.
    Do the politicians really think we are happy to put up with this present situation and are they not worried about the potential consequences.
    I cannot believe that George Osbourne has let himself fall into such a ridiculous trap.
    If your family income is £80,000 you will receive child benefit if the total family income is £50,000 from one family member, you do not.
    What idiot came up with this plan.
    I thought George Osborne was intelligent and I am now very worried.
    In one of his first act he has managed to alleniate tens of thousand of this goverments supporters.
    It is obvious to me and Iam not affected by the above decisions.
    My reaction and that of thousands of others will be interesting when his decisions actually affect us.

  • Comment number 28.

    I think child benifit should be kept as a universal benifit, regardless of income.
    However it should be limited to 2 children per couple.
    This would aviod the the problem of where the cut off is regarding family income, and would encourage responsible parenting

  • Comment number 29.

    The daily mail has a lot to answer for, and the idiots who take every one off case they spew bile over as the norm should be ashamed of themselves.

    There will always be people who abuse the system, that doesn't mean you punish everyone, it should mean you introduce sensible checks not blanket caps that take no account of individual/extreme circumstances. why should innocent children be forced to live in poverty because their parents are idiots? But of course these changes don't directly effect most people posting here so I suppose it doesn't matter. (BTW I have no children and earn a good living, I just have some empathy and common sense).

    In 20 years time when your houses are being burgled and cars are being stolen by the 5th kid of a desperate parent who lost their husband and bread winner in an accident or who had children when in a secure job but was made redundant maybe you'll realise what a huge mistake this kind of thoughtless policy is.

  • Comment number 30.

    Everyone’s being enticed into considering, what should and should not be cut.
    No one is being asked to consider why.

    The UK Government has an absolute and fundamental right to create as much money as it wants to. There is no rule that says the money it uses must be created from nothing by banks and loaned to the Government at interest.

    Now people will tell you that if the government creates money from nothing there will be high inflation. This will be true if creates lots of it, and untrue if it doesn’t.

    And similarly if banks create lots of money from nothing there will be high inflation, and not so if they don’t. For example when bank’s were creating lots of money and made it available for house purchases, the inflation of house prices was very high, and far above and beyond the inflation of wages. Even now, average wage increases are 1.5% and the RPI (excl housing) is 5%.

    None of the above is an excuse for wasteful Government expenditure, which I do not condone.

    But when you start thinking of ‘cutting this or that’, remember it’s all being done to satisfy interest payments to banks, on money that they have created from nothing in the first place.

    The plain truth is, if the state (which is us) does not control the creation of money, then the state (which is us) can only ever be at the mercy of those who do.

  • Comment number 31.

    Well, in the short term, some families with many children will probably find themselves hard up.

    But in the long term, perhaps this will act as a disincentive for people to have too many children unless they are sure they can afford to support them. That is a good thing on so many levels: apart from being the only realistic long term solution to child poverty, which the Labour government tried and so spectacularly failed to solve, it will cut the benefits bill and more importantly help to tackle the serious problem of overpopulation. There are already far too many people on the planet: we don't need to keep creating more of them.

  • Comment number 32.

    Let us remind ourselves of the ultimate injustice now likely to be played out in the UK.

    • The banks have taken Government money to survive.

    • The Government increases tax, and cuts public sector jobs to pay for this.

    • The extra tax or loss of your job means you can no longer keep up with your mortgage and/or loan payments.

    • The bank in receipt of government money then repossesses your house and petitions the court for your bankruptcy.

    • And finally having been made destitute, you, or a member of your family falls victim to some ailment which requires costly treatment which the NHS can no longer afford.

    And all this is to get the banks back into profit and individuals that work in them, back to receiving substantial bonus payments.

  • Comment number 33.

    I think it's a sad reflection on our society that we are more obsessed about saving a few £100 million per year making sure people at the bottom aren't free-loading, rather than saving a few £10,000 million per year making sure those at the top are paying their taxes.

  • Comment number 34.

    Why not just increase the 40% tax rate so it covers the £1bn required? The better off still pay, there are no anomalies, no disincentive for the higher wage and no need to increase bureaucracy or change the tax form.

  • Comment number 35.

    @Mark, Taxing the rich more, means that you collect less tax not more. The recent changes in Top Rate Income tax and Capital Gains tax has lead to a rush of hedge funds moving from London to Zurich, with a resulting loss in tax receipts in the last six months of £500 million pounds according to last weekend's FT.

    It very simple tax the rich more and they will take their money elsewhere. Tax the middle classes more and you we strangle the recovery. Which means that the only option is to reduce what you hand out in benefits. Life is simple, if you want more, work for it. Time we got back to that world view.

  • Comment number 36.

    I recieve a car allowance which just pushes me into the higher tax bracket, my partner works part time whenever I'm not working. By refusing to travel for work I would lose the allowance and retain the child benefit and so be better off. Does that make sense?

    I dont object to receiving less from the state but object to the unfairness of the system, if they can remove my partners child benefit due to my wage level then they can add a couples income together to remove the anomoly

  • Comment number 37.

    The tax system is too complicated. All income should be subject to tax, so unify income tax, capital gains tax, inheritance tax and national insurance, with a single threshold and a single set of progressive rates. All UK citizens, and anyone who does business in the UK should be subject to UK taxation, offset only by taxation paid in another jurisdiction, as evidenced by receipts. Replace council tax with a progressive land value tax. These two taxes should be all that is required to raise revenue, fuel and alcohol taxes may still be required to modify behaviour.

  • Comment number 38.

    What is wrong with a mother wanting to stay at home and bring her children up? My daughter has chosen to put her career as a solicitor on hold to give her children a loving start to their lives. Because her husband earns just a few pounds more than the Higher Income Tax threshold she will lose her Child Benefit in 2013. How can anyone argue that it is fair that a couple who both work but both earn just under the Higher Income Tax threshold can have a joint income of about £86k per year and keep their Child Benefits but another couple where only one works but earns just over the threshold loses theirs?.

    This proposal is totally unfair in its present form.

  • Comment number 39.

    Benefits should be included as income, and taxed accordingly.

  • Comment number 40.

    I would like to know how this affects 'families' where the father isn't registered on the birth certificate. If they have no parental responsibility then I assume they will not be counted when it comes to removing the benefit.

    Another blow for marriage.

  • Comment number 41.

    30. At 6:01pm on 04 Oct 2010, Dempster wrote:
    Everyone’s being enticed into considering, what should and should not be cut.
    No one is being asked to consider why.
    The UK Government has an absolute and fundamental right to create as much money as it wants to. There is no rule that says the money it uses must be created from nothing by banks and loaned to the Government at interest.

    So, on that basis does he government need to levy taxes? the borrowing is just the difference between taxes received and expenditure.

  • Comment number 42.

    The majority of people that this is hitting are the hard working families who deserve to have nice homes. Why do people have so many children if they are not able to afford to look after them other than for more benefits. People who have not paid into the tax system expect to get money out of the country when they have never done an honest days work in their life. It is the people like us who work hard and save our 'hard earned' wages for nice things like holidays and a nice car that have to wait for any assistance we need or pay for it!!
    The cap on immigrants entering the country is a very good idea maybe there should be a cap on how many children each family can get paid for! This way families can breed to their hearts content but not get paid for the pleasure.

  • Comment number 43.

    Does anyone know what the effects of this decision will be on State Pension credits? We have two children under 12, the Child Benefit is in my name as I both look after them and don't earn enough to pay National Insurance. As a result, I qualify for National Insurance credits to protect my future entitlement to basic State Pension.

    My wife earns just above the £44,000 cut-off for Child Benefit. When Child Benefit is axed, does this mean I lose my pension credits? No one appears to have said anything about this—it would have tremendous implications for me and others in the same position.

  • Comment number 44.

    29. At 6:01pm on 04 Oct 2010, errrrrrrrrrm wrote:



    "There will always be people who abuse the system, that doesn't mean you punish everyone, it should mean you introduce sensible checks not blanket caps that take no account of individual/extreme circumstances. why should innocent children be forced to live in poverty because their parents are idiots? "

    If £26k per annum is poverty then many working families are living in poverty. Why should families living on benefits live better than someone going out to work every day? Very good idea to bring some responsibility and accountability back into the system.

  • Comment number 45.

    How can the party that would put in place such a clear cliff edge in earning incentives be trusted with developing a universal benefit - the greatest reform to the benefit system ever. Completely destroying the situation that someone should always be at least a little better off the longer they work and the more they earn

    In what kind of system does it make sense for a single earner on £40k with 5 children to be better off then if they earnt £45k. What kind of system is it were people are better of turning down more than a 10% pay rise!

    A daft decision and, like so many being made by the coalition, one made on the hoof without any real consideration...

  • Comment number 46.

    7. At 4:35pm on 04 Oct 2010, SotonBlogger wrote:


    "So now the Tories are practising eugenics and specifying who can and cannot breed based on a maximum level of benefit?"

    And not before time.

  • Comment number 47.

    Yes Yes Yes, complain about the Daily Mail which we have the option of paying for as opposed to the BBC which we have no option but to pay for! It is such as give away that the BBC is riddled with "Left of centre" liberal guardianistas or militant lefties who would rather go on strike than cover the conference of the Conservatives. I agree the Chile Benefit cut off is a bit harsh and possibly is unfair and this needs sorted. But why not mention that we taxpayers are paying Child Benefit for children of EU workers, whose children do not even live in this country. No.. it is easier to belittle readers of the Daily Mail who as it happens also are license payers for the BBC!!

  • Comment number 48.

    Andrew Prior wrote
    " Since when where Children ever an affordable option? Also, isn’t baring children a human right? (if not, why do we have IVF on the NHS?). This isn’t some bizarre reversed “Logans Run” you know where some children are deemed excess by the state and culled!"
    As well as being a human right, baring (sic) children also has human responsibilities ie being able to look after them without calling on their neighbours to chip in (or in many cases fully provide financial support). These measures are good but don't go far enough

  • Comment number 49.

    SotonBlogger 7

    'So now the Tories are practising eugenics and specifying who can and cannot breed based on a maximum level of benefit ? '

    No. Previous governments have been practising eugenics by paying people to have children. The end result of which is that we have an exponentially growing underclass.

  • Comment number 50.

    This piece is a pretty blatant Labour party view of the topic. When will the BBC learn that there are actually a lot of tory voters out here, who think we have paid out too much in benefits and need to rein in the generosity a bit.

  • Comment number 51.

    'That will not concern the editorial-writers at the Daily Mail or, perhaps, many in the hall in Birmingham. But it could provide some awkward case studies when the reform comes in.'

    Yeah I'm sure people will be heart broken when they learn of women with 10 kids with 10 different fathers having to cut down on their intake of fags and booze.

  • Comment number 52.

    SotonBlogger wrote: So now the Tories are practising eugenics and specifying who can and cannot breed based on a maximum level of benefit ?

    ....................................................................

    So the government is restricting welfare families to a wage of £26,000. There are many families who would love to earn that amount without lifting a finger. They will just have to restrict themselves to 6 aside tournaments, rather than the full 11.

  • Comment number 53.

    16 saltfordman:

    '' 'One key conclusion is that most of the families who now earn a lot of benefits'.
    Is this BBC speak? surely you mean 'claim' benefits rather than 'earn' benefits. I was not aware that benefit claimants had to do some work or service to the community in order to qualify for benefits, but it sounds like a good idea.''

    Arh yes BBC Menglish, Messy English. I noted this recently on this blog. never a day goes by without an example. Best example ever in an environmental report some time ago. 'the curse of the river has changed'. I presume this was meant to be 'course'.





  • Comment number 54.

    I would like to ask the following questions of the various posters.
    1) How many children do YOU consider to be excess per family - use the income ranges 0-20, 21-30, incrementing in blocks of 10 (£'000)- as the various posters will obviously put the argument that the number of children per family should be income-dependent?
    2) Many people live in expensive areas because that is where the work is. If they are on a low income (less than the £26000 which the article seems to suggest), they will currently be in receipt of housing allowance which may be as much as £1000 per week. If they move they will have no way of getting to work in a reasonable time and any landlord who is a landlord by way of business (ie, they have bought houses deliberately to let) is going to squeeze the maximum they can get - else live elsewhere!
    3) There are several high-profit, highvalue businesses in Chelsea. I would take an even-money bet that many of them wil be paying at or near minimum wage. Can you imagine the screams when they have to close because they will not pay the staff the money they need to live on because the stay will not subsidise businesses by paying housing, child, and other benefts. Starve, you mongrels, starve!
    4) £1000 per month is generous and perhaps too high for housing benefit. I agree -BUT (and it really is a BIG BUT) landlords will swqueeze the maximum from their properties - as one I know said to me (and I do not live in London) "The state will pay, mate, the State will pay! Even the Tories will not stamp down too hard on it without cutting their own throats in the long run!!!!!"

    I do accept that what is written above is extremely provocative. I also maintain that these points need to be put, irrespective of one's political leanings, in order to get SERIOUS debate going (I apologise for all of the capitalisation, but I am not shouting, I am trying to make an emphatic point in each case) and not just have knee-jerk reaction to what may be anathema to the individual concerned and to the Government that backs him. Frankly, the poor are like fleas - in any generation they are alwaysa there and you may be part of them!

  • Comment number 55.

    No-one appears to have commented on the abolition of the support for 16-18 year olds.

    The fears of two social workers, who work in deprived areas in the town I live in, are that

    1. This will act as a disincentive for young people to remain in education after the age of 16. Whilst £30 a week is not a lot of money, in most cases it pays for bus fares and for something to eat at midday;

    2. Where relationship between parents, step parents and the young people themselves are not great, there will be a greater incentive to put the young person out on the street, making them homeless and potentially criminal out of sheer desperation.

    3. Prior to this Government taking office there was a wish to reduce the number of "NEETs" young people, i.e. those who were neither in education, employment or training. It would appear that this government does not care what happens to them now.

  • Comment number 56.

    Yes very fair a single parent on £45k will get nothing, whilst a couple earning £80k of £40k each will get the full whack. As per usual it is the average income tax paying joe that will be penalised. In the area I work I know of masses of slum landlords who have got loads of kids. I bet they get the full whack and don't declare a penny of their income.

  • Comment number 57.

    14 sece11:

    '50000 families in this country get more than 26000 tax free per year! I may as well quit work and live on benefits if this is the case.....I fall straight into the category of 'EARNING' 44,000 a year with my wife being a full time mum for my two lads.

    WHAT IS THE POINT!'

    I know a number of people who have dropped out of the system and survive comfortably without debt on benefits. Debt, mainly mortgage, is what makes most people work because you can't service debt on benefits. One set regularly walk by my office whilst I am working all day. Same fellow regularly is down the river fishing all day day after day in the season. Another family we know the fellow cycles around the countryside all day in the summer with a packed lunch and reckons anybody working is mad. Thankfully he has stopped off asking for a cuppa since he got a sharp comment. Problem is - if there is work would anybody want to employ them because they operate in turtle mode trying to fill the day.

    I am not against people on benefit, but I am against people abusing a system. At present if you decide you don't want to work and set yourself up within the limitations you can do quite nicely.

    Its not the first time I have felt I should cut out the middle man and just walk down the road and hand a bag of money over.

    Anyway, to get back on thread - Child benefit is hard to justify for high income families but it looks dangerously like Browns 10 percent tax gaff. Future cuts are going to be interesting. Benefit cuts are more emotive than tax rises even though they are exactly the same in raising money.

    Regards

    Not Buzz Windrip


  • Comment number 58.

    Well done to the government.There's too many families on child benefits leading an easy life.Big families and single mothers with 2 or 3 kids form different fathers.I work on council estates and see plenty of them every day who do nothing.Good choice of cuts.

  • Comment number 59.

    Not Buzz Windrip - I'd rather have 400 spelling errors and grammatical mishaps per article, so long as it is detailed, intelligent and high-brow. After all, the BBC gets a guaranteed fee so that it can avoid populist, simplistic tripe. Sadly the BBC is failing in it's remit, in part due to Labour's love of statistics and their belief that we must all descend to the lowest level in order to be "inclusive".

    I wonder how the BBC will manage to make the budget deficit into a story about personality? It probably won't get as much coverage as the Labour leadership bid, which had a really easy, spoon-feed-me narrative.

    That's not a reflection on Stephanomics, which is far better than BBC TV.

  • Comment number 60.

    As a parent earning over £44k I am happy to do my bit from 2013, although I am unhappy that those with two jobs earning up to £87k can still benefit.

    In order to restore the faith of my generation of parents with children who seem to be being hardest hit; I would also suggest that GO now looks to pensioners enjoying earnings more than the higher rate tax threshold and removes benefits and other freebies to the tune of the loss of Child Benefit to the average parent (with two kids)- so approximately £2k per annum.

    A good starting point would be the winter fuel payment, free tv licence, free bus pass (or travel tokens) and any "concessionary" rates for publicly funded services.

    Also any single person eligible for higher rate tax should no longer expect a 25% rebate on their council tax; after all - we're all in this together and by all doing our part we'll all be out of it sooner!

  • Comment number 61.

    This is worse than is suggested. Two people earning a joint "£80,000" get two tax allowances meaning they take home approxc £59,000 plus they will receive child benefit whereas in a family where only one partner earned £80,000 they would take home only £49,000 and get no child benefit!! Not sure how that is fair?

  • Comment number 62.

    Those families who are significant benefits recipients for the most part will live in privately rented accommodation in the south east, where social housing is severely limited or unavailable.

    They will qualify for housing benefit, but only to pay for appropriate accomodation (ie not a 4 bedroom house for a two children family.) Housing benefit will also be capped at what is called the local housing evaluation level(ie local market rent)which local authority evaluation officers will assess. This process ensures there are no innappropriate payments of housing benefit.

    But in the south east, these market rents are extremely high, often over £800 per month, so this becomes the evaluation level. This is what it costs to rent a house and this is what is paid in housing benefit, most often directly to the landlord, and never even seen by the claimant.

    Remember that buy to let landlords still get tax relief on their second and subsequent mortgages) while also receiving these huge housing benefit payments. It is also true(and I just couldn't leave them out) that it is the bankers and their bonuses who have so distorted the cost of living in general, property prices in particular and thus rental costs, in the South East.

    Rental costs are at the root of this problem as George O knows very well. So, in the absence of any action to deal with this, I suppose what he is actually saying is that he would like all such families to move out of the south east. I might ask him, to where and to what?





  • Comment number 63.

    59 Ben

    A strange defense of the repeated poor use of English. You say you accept this providing you get high brow stuff yet complain you don't get the high brow stuff. So exactly what is your point.

    I don't recall the sort of headlines we seem to get all the time now - eg 'The objective is to half the deficit' rather than 'halve'. Or - 'wanted to role back employee benefits'. Just exactly what is being said, is the idea to fill in blanks.

    The reporting of 'high brow' stuff is about attention to detail. The measurement of attention to detail also comes from the use of English. I am afraid I do not share your belief in just how good reporting is from any source. When reports are made in my specialist area I have seen presenters talking absolute drivel with extreme confidence. As I cannot be a specialist in all areas witnessing a substandard performance in my area makes me wonder what is going on when reporting in other areas which I cannot judge the content.

    I may make mistakes in my English now and then when I post but the difference is I am not paid to write. I am however paying for the BBC.

  • Comment number 64.

    Benefits have increased in number by accretion, as particular problems are addressed. I am very glad that IDS wants this to be swept away and replaced by a single system.

    The drawback of individual benefits and means tests are clear: they are difficult and expensive to administer. They also mean that some people just above an arbitrary line are excluded. A simple answer is to make all benefits taxable. Universality could then be preserved. There must be a drawback to this simple idea. Would one of the correspondents explain it?

  • Comment number 65.

    Not Buzz Windrip - I wasn't moaning at you. I agree with your point and would add on top this that the actual content is poor. The BBC can spell check all they like but they cannot (yet) have a computer generate interesting content. Much of the BBC web content isn't fit for a local free paper, but as you say we are all forced to pay for it.

    I wasn't saying your post was poor, that you were wrong or any other negative permutation! Sorry you got the wrong impression.

    ps bet you spell checked that! ;-)

    pps my wife used to proof-read so imagine how you felt writing that reply. That's how I feel, but 24x7!

  • Comment number 66.

    54 cynicalsod

    The simple answer is businesses should pay sufficient for people to live in or commute to a high value area or that business should relocate.

    Otherwise the business is indirectly getting a subsidy. This argument was the basis for the introduction of the minimum wage because prior to that some businesses were paying very low rates which necessitated workers claiming benefits to live, i.e. These business were being indirectly subsidised.

    The fact there is such a high concentration of benefit payments in the London area, a high cost area, tells you there is a problem.

    It is probable that the de facto subsidy in London impacts on the rest of the country as businesses that would migrate out of London remain due to the indirect subsidy. Regional public spending related GDP in London is about 1 pound in 3. In other outlying regional areas in the country it is 2 in 3. These areas have a higher public spending dependency than London and will suffer more with the forthcoming cuts.

    If you want to take the argument further - the continued effective subsidy in London strengthens the London property market relative to the rest of the country which has a negative effect on regional and in particular rural communities when that resultant equity is transported out of London into those environments pricing young people out of housing.

    All subsidies have a high risk of warping a situation and creating bubbles.

    Perhaps you can see now it is not that straightforward.

    Regards

    Not Buzz Windrip

  • Comment number 67.

    GO calls it being fair. He's given us alot of information of how he's going to sting the soft under-belly of the low and middle income citizens, but I've not yet heard too much detail about how he's going to achieve his swoop on the super-rich. Apart from some talk about spending £1b of tax payers' money to recoop £7b of tax evasion money from the so called tax havens. Many economists put the annual figure of tax evasion as much higher than £7b, so if £1b of spent by the government wreeps £7b in tax evasion money, surely £2b spent should bring in £14b, £3b for £21b and so on, it's got to be a 'no brainer' to invest until it as all been collected, OR is the £7b figure the limit of the coalition's ambition or indeed courage to crack the armadillo's.

  • Comment number 68.

    64 Old Bostonian

    Taxing child benefit would remove benefit to the lower paid. Limiting it to a salary creates a threashold, one side you lose, the other you win, however the low paid are unaffected.

    It is difficult to suggest higher income earners are desperate unless they have expanded expenditure up to the limits of income. Usually desperation is lower down the stack and shamefully in developed country over 1 child in five is brought up in poverty.

    The road to hell is paved with good intentions.

    The low paid cannot pay much tax. There are limited numbers of high flyers and they pay a fair old bit, therefore the cuts mean a middle class squeeze. Hence Red Ed claiming he wants to be the defender of the middle class rather than the working class. lol.

    Regards

    Not Buzz Windrip

  • Comment number 69.

    £500 a week is very generous actually.

    If you are working 47 hours a week on the minimum wage, you'll earn £14,492, which is very roughly £250 a week after taxes...

    It seems that many will still be better off on benefits, than by working...

    The other argument is that if families are entitled to recieve £500 a week on benefits, in order to live, then the minimum wage also needs to be increased. Approximately doubled actually, to £12 an hour...!

  • Comment number 70.

    65 Ben

    No I'm not bothered, and no I didn't spell check. The speed of data transmission has accelerated but its quality appears to have dropped.

    I've not spoke to my wife for sometime, I never want to interupt her.

    I am however reminded of Ghandi - 'You don't have to burn books to destroy a culture. Just get people to stop reading them'. Sadly it appears to work.

    Now I must sign off.

    Regards

    Not Buzz Windrip.

  • Comment number 71.

    As a happily married father of five - who has worked all his adult life along with my wife who works as a primary school teacher part time - I was delighted recently, i.e. like 3 weeks ago, I got told that I may get a promotion and a 5% pay rise, whoopeee !! You can then imagine the joy I had this morning that I was put in the somewhat unique position of having to phone my manager to make sure that my pay rise didn't take me over the £44k mark, luckily I will be paid just under £44k, which is a made up number anyway, as I already pay 40% tax as I believe the 40% threshold is £37k.

    Anyway, here is the really good part I then had to inform my manager that unless I got a £7200 pay rise, as if - apparently, I get £295/month child benefit - I don't want to be considered for any future pay rises as I would be financially worse off, doh !!! Therefore, as my eldest is 13 and my youngest is 1, my manager now has the easiest job in the world, he now has an employee, who no matter what he wanted to do in his career will now never ask for a pay rise ever again, unless, as I said it was > £7.2.

    Therefore, in my humble opinion, this is simply put the most poorly devised and thought through, kick in the teeth for hard working parents and families ever ? At the end of the day, it is the children who will suffer, maybe I should consider selling a couple of my kids to some movie/pop star ?

    Here are some simple questions our new chancellor, the multi-millionaire Mr G Gideon Osbourne must have asked himself :
    1. does this policy have the potential to financially penalise hard working parents who want to work hard to progress their career and earn a higher wage to better provide for their family ? FAIL
    2. can I devise a policy that has been specifically designed to discourage middle class working people to have large families ? FAIL
    NB for all those stupid people who say their are 2 many people already in the UK anyway, learn something about demographics, who'e going to pay for your pension/nhs etc. etc. in your old age ??
    3. can I alienate, the hard working middle-class families who have worked hard all their adult lives, to feed, clothe and provide for their children ? FAIL
    4. Is it fair that if one parent with 5 kids works extremely hard and earns £44,0001 they should have all of their child benefit removed and penalised to the tune of £3,600, while, if both parents worked and between them earned £87k they can keep the full child benefit ????? FAIL

    Basically there is now a "black hole" between £44k and £51k - depending on how many children you have - where you would be financially worse off if you got a pay rise, urggghhh ?

    Finally, anyone who thinks trying to raise a large family, with both parents working, a large mortgage, a large sexy people carrier - not tax efficient but u try getting 7 into a Smart car - , child care costs, food, clothing, the list goes on and on is easy, is in cloud cuckoo land. Personally my wife and I are in the very privileged position that we are "in the black" for 2-3 days a month and for the rest of the time we live off our over-draught....

    I truly despair for the future of this country and my children's heritage !!

  • Comment number 72.

    #71. mgmclaugh wrote: Précis: a pay rise doesn't pay!!

    You well illustrate the law of unintended consequences. Unfortunately they that shoot from the hip like the crass amateur politicians we have will always do this most of the time. (See also G. Brown 10% tax rate scrapping.)

    If the Civil Service in the Treasury has any integrity they should have pointed out the crassness and stupidity of the silly George Osborne's playground antics - why didn't they? And this is the really interest point, I think.

    What possible reason did the Treasury have for not warning Osborne about the obvious flaw in his silly half warmed fish of an idea?

    Perhaps they are so incompetent they did not realise the problem that you highlight would exist, or perhaps the understood the problem and decided to give Osborne enough rope to hang himself? Either way Nick Macpherson should have the integrity to resign. For those uncertain who he is - he is the Permanent Secretary of the Treasury and by the way the same one that did not point out the pitfalls in the Gordon Brown scrapping of the 10% tax rate. By the way the same man that was in charge of economic regulation, that gave was so poor, that it created the bubble and crash!

    What is the point of a Civil Service if it can't save us from stupidity from inexperience political amateurs, like George Osborne.

  • Comment number 73.

    #26 Michael Richards

    What an incredibly foolish post. Please point me to where I said that children are a purchase. I agree like many on this thread do, that having kids is indeed a right to which we are entitled. Though what you, and a few others here seem to be forgetting that they are also a responsibility. But many people in this country, perhaps including yourself, are always quick to point out their rights, but never too keen to accept their responsibilities.

    Whilst it is a right to have children, it is not a right to be given money for their upkeep. Perhaps you believe it is not only the states responsibility to pay for your children, but also to look after them when you fancy going to the pub?

    The real problem is that someone who attempts to work a low paid job is significantly worse off than someone who sits at home claiming benefit and having kids. This is not a sustainable path to future and long term prosperity, and the government needs to change the system in order to make it worthwhile to work rather than claim benefit. Though perhaps you would disagree. Would you care to explain how this society of yours would work, where everyone sits at home claiming benefit for all their kids? Where's the tax money for all this benefit going to come from if no one is at work because it's not worth it?

  • Comment number 74.

    GO has had his 10% tax moment and he has announced it in advance of his main speech on the cuts! Oh dear - no thought or idea of how much time he has given everyone to rip one idea to shreds.

    There was no need to do this. As an example, a thought experiment; The UK borrows £100Bn and pays interest on it. The city and other teenage scribblers are happy, the IMF is happy; the people of the UK pay out and the debt mountain increases further. The government could spend £100Bn without borrowing it; it has the right to just do it, no interest payment! But apparently the financial roof will fall in! Its the city blackmailing us - we should just spend the money we have to, we don't need to borrow it and then pay more. Let's see what happens. I doubt the roof will fall in, there will be a reaction, but my guess is the bully boys will be paper tigers. So why not try it for real.

    By the way, I am not suggesting unfettered spending leading to hyperinflation. Let's see what happens within the limits set by current spending plans first. We can then take it from there ......

  • Comment number 75.

    The so-called 'right to have children' is no more a right than the 'right to have a big house, car or holiday every year... if you can't afford it then don't do it unless you can afford it on your own! It is not a right but a responsibility... this country has more than it's fair share of freeloaders who will have children to 'milk the system'. On the other hand those who have raised children having considered the burden on themselves and the community (yes of course its a burden, otherwise they would not be asking for help in bringing them up!) have foregone certain luxuries that we all now consider to be standards - case in point, take a look in your childs bedroom and compare it to what was in yours 20/30/40 years ago and tell me that is not a burden on you or the community. Wake up, smell the coffe and stop complaining it's just the survival of the fittest!

  • Comment number 76.

    Having been mainly self-sufficient most of my life, it comes as somewhat of a shock to find out my hard earned tax pounds have been going to fairly well off families.
    I would have much prefered it if my tax had gone to those really in need and not to buy handbags and holidays for higher earners.

  • Comment number 77.

    #41 AnotherEngineer wrote:

    '30. At 6:01pm on 04 Oct 2010, Dempster wrote:
    Everyone’s being enticed into considering, what should and should not be cut.
    No one is being asked to consider why.
    The UK Government has an absolute and fundamental right to create as much money as it wants to. There is no rule that says the money it uses must be created from nothing by banks and loaned to the Government at interest.
    So, on that basis does he government need to levy taxes? the borrowing is just the difference between taxes received and expenditure.'

    The Government creates the money and spends it, as the money circulates it is subject to the taxation system which recoups it and destroys it in the process, thereby balancing the books.

    It works the same way as the current system except the banks don't get to charge interest and the public is better off.
    The banks would of course require bailing out again. (although this is fast becoming a recurring feature in the present system as well)

  • Comment number 78.

    The sums involved in these announcements are a mere drop in the ocean, which means that they are not here to save money but simply to divide opinion.

    It's easy, if you want to make work more attractive than benefits then raise the personal allowance so that someone on minimum wage pays no tax.

    If you want to cut housing benefit then implement a cap on rent of £200 pw alongside landlord licencing (self-financing) with minimum accomodation standards (fine and loss of licence for failure to comply)

    Child Benefit (formerly Child Tax Allowance formerly Family Allowance) is paid directly to the main child carer (traditionally the mother) for a very good reason.

    That this government has decided to target this benefit specifically shows how radical they intend to be, the deluded posters above have no inkling that it is they who will be targetted for the biggest cuts in services and largest increases in taxes.

    Expect an announcement along the lines of 'It is only right and proper that we all should play our part' just before middle and higher income householders have to start paying to look after their elderly relatives, paying for books for the 'Free' schools that their children attend, paying for everything that they have already paid for in the past (road tolls for example)

    It's your bed...

  • Comment number 79.

    all these so could middle class people on the tele last night saying how hard up they will be, poor s--s, should try living in the real world of hard working people, if my duel income was £80,000 per year i would happily give up child benifits now not wait till 2013, they should try living aon duel income of 27,000 like to see how they would do. george should have bought this in next year.

  • Comment number 80.

    77. At 03:27am on 05 Oct 2010, BobRocket wrote:
    #41 AnotherEngineer wrote:

    '30. At 6:01pm on 04 Oct 2010, Dempster wrote:
    Everyone’s being enticed into considering, what should and should not be cut.
    No one is being asked to consider why.
    The UK Government has an absolute and fundamental right to create as much money as it wants to. There is no rule that says the money it uses must be created from nothing by banks and loaned to the Government at interest.
    So, on that basis does he government need to levy taxes? the borrowing is just the difference between taxes received and expenditure.'

    The Government creates the money and spends it, as the money circulates it is subject to the taxation system which recoups it and destroys it in the process, thereby balancing the books.

    It works the same way as the current system except the banks don't get to charge interest and the public is better off.
    The banks would of course require bailing out again. (although this is fast becoming a recurring feature in the present system as well)


    Mr Rocket, extremely well put my good man.

  • Comment number 81.

    11. At 4:56pm on 04 Oct 2010, Co-operateordie wrote:
    If this is the first step towards a more sensible system that restores work incentives while balancing family needs (how about £10 p.w. minimum wage?) then I welcome it.
    =========================================================================
    Who wouldn't support a minimum wage of £10 Per Week............

  • Comment number 82.

    Where as in principal I do not have an issue with capping the level of benefit there can not be a one size fits all approach. The same goes for child allowance. I think that George has fallen foul of the Whitehall mandarins. They can twist everything to their own advantage. Which in this case is doing nothing, something they do very well.

    Unfortunately you have to be one step ahead of these guys. They have open the Pandora's box of Means Testing, however there can be other ways. The most simple is to make everyone claim for Child Allowance annually. Then it is down to the individual to enter the correct information you could also capture the family's income and rid themselves of the anomaly of a single persons income being over £44k and a joint income of £87k as previously stated. The other thing is, it would be simple to tack alongside the tax system so reduced costs and double checks.

    So no embarrassing climb downs just a little tweaking and everyone is happy.

    You can then go onto thinking out a solution for benefits.....

    More than happy to help on that one, but it will cost you......

  • Comment number 83.

    I have just heard David Cameron say on TV that he hopes that we will all see the need for the Child Benefit cuts and that we will agree that the better off in our Society should pay more or take more of the cuts. So a couple who both work and earn £86k per year providing neither exceeeds about £44k will retain their Child Benefit. Another couple where only one works but earns just £1 above the Higher Income Tax threshhold will lose theirs. Which couple is better off Mr Cameron? I am afraid that after only 4 or so months in Office Mr Cameron has shown a fundamental lack of financial acumen equalled only in recent times by the failure to understand the real impact of losing the 10p Tax Band by Mr Brown. Oh Dear, what are we in for?

  • Comment number 84.


    Jizzlingtons

    and what about the life prospects of the children forced into abject poverty by the reckless choices of their parents and the abandonment of them by the state ?

    I would say some truely innocent victims of an ideological policy designed to please the mob and their red topped mouthpieces. To create such victims amongst those truely without a voice, unforgivable in my opinion

  • Comment number 85.

    83. At 09:00am on 05 Oct 2010, BigD-MBA

    I'm surprised they don't use the obvious argument in favour of these cuts in benefits.

    That a large number of '2 parents working' families will incur childcare costs equivalent to or greater than the benefits received by the higher earning 'single parent working' family

  • Comment number 86.

    Isn't there something badly wrong with our society and economy where people paying higher rate income tax - presumably because they are better off - also receive state benefits?

    Now some follow the principled argument that this is because benefits should be universal.

    In my considered opinion it is because we have lost the plot.

    Is welfare a safety net as a statement of a civilised society or a way of life? I think it has become a way of life. Is it any wonder that we have allowed our economy to be hollowed out by Big Business and Big Government?

    We just don't understand economics any more, do we?

  • Comment number 87.

    The Polish will still be doing very nicely from us along with other eastern europeans. 40,000 children living in Poland get our child benefit, I suppose along with their own countries benefits. They will soon be getting something like 2.5 billion in benefits a year, under new EU proposals, not bad for their children not even living here. Lets hope they are all intelligent, they must be to have worked this little ruse out.

    http://www.telegraph.co.uk/comment/columnists/philipjohnston/8042308/Child-benefit-theres-plenty-of-welfare-on-offer-to-the-Poles.html

  • Comment number 88.

    #81 Chris London

    "11. At 4:56pm on 04 Oct 2010, Co-operateordie wrote:
    If this is the first step towards a more sensible system that restores work incentives while balancing family needs (how about £10 p.w. minimum wage?) then I welcome it.
    =========================================================================
    Who wouldn't support a minimum wage of £10 Per Week............"

    Let's not give George too many ideas....
    I meant £10 per hour but someone else has already suggested £12. That's inflation for you!

    As some posters have indicated there has been a huge "cheapskates charter" where low-paying employers have been subsidised through benefits, shyster landlords have been subsidised through housing benefits creating yet another subsidy for low wages.

    Once these benefits are withdrawn we will see the extent to which we have been subsidising low-paid employment. As these jobs vanish we will be left with a huge unemployed workforce able and willing to work but lacking the skills to earn better wages. Luckily housing costs in the south and east will force them to relocate north and west out of sight of the London media...


  • Comment number 89.

    43. At 7:12pm on 04 Oct 2010, Stonehead wrote:

    Does anyone know what the effects of this decision will be on State Pension credits?
    =======================================>
    Excellent question Stonehead ... see my post on Stef's previous article, (near the end) ... (it would seem) nobody has considered this. Without your NI credits received through child benefit you could potentially lose your right to the state pension. Stef? Anyone? Is this right? Is there any small print out there that discusses this point?
    [As I understand it, you need to pay NI for 30 years to qualify for the state pension. For each year you receive child benefit, that 30 year threshold is reduced by one year. Without that reduction, a lot of parents could lose their entitlement to the state pension under this proposal]

  • Comment number 90.

    Sotonblogger

    You make it sound as though this benefit goes into the pockets of the children themselves so that they can spend it on school supplies and food. Do you really think those parents that have many children so they can claim more benefit then go and spend it all on giving the kids a good upbringing? Do you think that children brought up in such an environment get on well in life? Or is it more common that they carry on the trend and become professional benefit claimants and/or criminals?

    Of course this is a rather stereotypical comment but there is certainly a lot of truth to it.

    Parents have a responsilibity and a duty of care to their children. If they can't or wont take on this responsibility then why should the children remain in the parents care? As I've said before, it is not a right to have your children paid for by the state. There are plenty of potential couples looking for adoption, I'm sure the kids would have a much better opportunity with them.

    Though of course you're going to reply by saying that this would violet the parents right to care for their own children. You can't have the rights without the repsonsibilities....

  • Comment number 91.

    62. At 9:14pm on 04 Oct 2010, Mike wrote:
    Remember that buy to let landlords still get tax relief on their second and subsequent mortgages) while also receiving these huge housing benefit payments. It is also true(and I just couldn't leave them out) that it is the bankers and their bonuses who have so distorted the cost of living in general, property prices in particular and thus rental costs, in the South East.

    I think that you mean that they pay tax on the profit from renting out the house i.e. rent received (possibly from housing benefit) – interest paid – any other costs.
    I agree that housing benefit has distorted the market. I would expect the rents to fall to the maximum level of housing benefit otherwise they will have no tenant in many cases.

  • Comment number 92.

    I find this thread very interesting. For so long some people have been arguing that benefits should only be considered as a last-resort safety net (and probably not paid in cash!). Now we see the same type of posters claiming that the removal of Child Benefit for higher earners is UNFAIR!

    Pot and kettle come to mind!

  • Comment number 93.

    Everyone must pay for the sins of the bankers. Poorly motivated reforms lead to poorly designed reforms. When the goal is to provide revenue so the governments can pay interest on loans from the banks the bottom line becomes more important than program eligibility or a needs testing structure. Politically designed benefit programs reflect political power within the society. More money that is used to purchase goods and services will go to the banks and out of the economy.

  • Comment number 94.

    #35 "@Mark, Taxing the rich more, means that you collect less tax not more. The recent changes in Top Rate Income tax and Capital Gains tax has lead to a rush of hedge funds moving from London to Zurich, with a resulting loss in tax receipts in the last six months of £500 million pounds according to last weekend's FT. It very simple tax the rich more and they will take their money elsewhere. Tax the middle classes more and you we strangle the recovery. Which means that the only option is to reduce what you hand out in benefits. Life is simple, if you want more, work for it. Time we got back to that world view."

    What you mean is - just ignore the vast bailouts that kept the banks afloat and in business, and put the nail in the public finances (you presumably don't know or care that government spending as a percent of GDP was lower under Brown than under Major). Ignore anything that affects your simplistic view that its disabled people on benefits buying wide-screen tellies that got us here - ignore the fact that the banks have mounted a colossal smash and grab raid on the public purse and will be coming back for £200 billion more next year.

    Presumably you feel that really staggeringly gigantic handouts with no precedent in history to rich corporations that nearly send a country under don't count as 'handouts' - presumably because their employees tend to be people like, well like yourself? And they merit all those bonuses that come out of our pockets because 'you have to pay the talent' - except doctors, nurses, teachers obviously

    You're meaning those other, much much much smaller subsidies, that don't go to the already rich - god yes how much you must hate them

  • Comment number 95.

    My wife and I only have one child. We couldnt afford any more. Both of us have always worked when we can and for the most part have had full time jobs regardless of income. Its wrong that people should be rewarded for failure. Having a degree of self criticism and taking responsibility for ones position in life here is the key. Dont expect to keep receiving hand outs. Well done the new coalition

  • Comment number 96.

    I really abhor those daily-mail like rants about the feckless benfit dependants who refuse to look for work etc.

    And then:-

    Yesterday, on my day off, the wife had me laying laminate flooring in one of our bedrooms, working me until 7 pm. I looked out of the window at 2.30 pm to see one of my neighbours get out of a taxi and stagger up the road blind drunk. My wife told me he often comes home in the afternoon in that condition, that he seldom works (apparently his last job - don't laugh -was a bar manager in a local pub, & he was fired for being drunk at work - I said don't laugh) and is on incapacity benefit.

    I also have as potential in-laws the parents of my daughters partner, both the same age as my wife and I, who are both on incapacity benefit. They have a holiday home on the coast and run a motability vehicle.

    These are the people that this government say they are going to target. Whilst I believe most employers wouldn't touch any of them with a 40 foot pole I, and a lot of other people, certainly would support capping what they do get.



  • Comment number 97.

    #95 - Your post is completely correct until the last line.

    The coalition is taking a cut out of a benefit that will have a marginal effect on the debt. Meantime it is writing off £5 billion tax owed by Vodaphone and promising to 'go easier' on the corporations in future.

    What they intend to do is ramp up the handouts to the very rich corporations and banks, and turn the screw on the shrinking number left in work as the recession turns worse.

    That's not what they have SAID, its unfortunately what they are doing

  • Comment number 98.

    Oh those crazy Tories! Just like in the pre welfare state days parents, with children they can't afford to keep because of a ceiling on benefits or because they can't find any affordable rented accommodation, will be asking the local authority for them to be put in care (either temporarily or permanently).
    Now you might think that would be really expensive but here's the trick;There aren't any children's homes! They have all been replaced by a small number of foster parents for the small number of children who need to be in care.

    So the kids will just have to double up in their parents bedrooms and eat baked beans or go without. I suppose once the Big Society kicks in there will church based children's homes staffed by enthusiastic volunteers, the Catholic church have always been in the forefront of this...

  • Comment number 99.

    On Child Allowance: This is paid to carers of children usually women. I am curious to know how HMRC knows what their partners earn if and their partners jointly don't apply for Child Tax Credit.

    Maybe they should follow Mr Laws and rent from their partner.

    On capping: what is the basis of the "median £26K NET family income after tax"? The figure is suspiciously close to GROSS median average individual wages (currently £25.4K but this is probable an coincidence. What taxes?.... including council tax? The official figures are confounded by 'revaluation' since they are concerned with family poverty and survey based. I suspect nobody knows. Will somebody call the Treasury and ONS and ask?

  • Comment number 100.

    #96 JohnH,

    Ever occured to you that your neighbour just may be an alcoholic. Irrespective of how he came to be in that state, alcoholism is as much an illness as any other that prevents the sufferer from working - would you employ an alcholic?

    As for your future in-laws. Perhaps they do have a vacation home. How do you know that they didn't purchase it whilst they were fit and able to work? Should they now be forced to sell it?

    "I really abhor" posters who start of as you have done and then present streotypes!

 

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