“Services for the poor will always be poor services” – Richard Titmuss, quoted at Left Foot Forward.
The announcement that child benefit is to be scrapped for the families of higher-rate taxpayers (i.e. those earning over £44,000) has caused predictable anger. Heck, I’m pretty angry about it, on the purely selfish grounds that it’ll make a significant dent in our family finances.
Among the arguments being directed against the change are:
- If you earn £44,000 a year, you lose your child benefit. However, if one parent earns £30,000 and the other earns £15,000, they keep their child benefit. Indeed, if both parents earn £43,000 – total household income £86,000 – then they keep their child benefit, too. As such it penalises households where one partner is in paid employment and the other looks after the children full-time: a group the Tories were supposedly planning to encourage.
- The disincentive effect to people earning just under £44,000. Why go for that promotion when you’ll be worse off after it if it takes you over the £44,000 threshold? Whatever happened to encouraging aspiration? (Or is “aspiration” only for those earning over £100,000 a year?)
- The Tories and Lib Dems had both promised not to do this. Yeah, yeah, I know: that was before “Greece”, blah blah blah. Promises, schmomises.
However, let’s face it: this change only affects 15% of families, and better-off families at that. Cry us a river, white wine socialists. After all, plenty of people earning less than £44,000 are going to suffer far more from other changes planned by the government.
Which brings us to the most important argument against this change: what it presages for the rest of the benefit system. As someone observed recently, the NHS has survived the past 30 years because it is a universal service. By contrast, legal aid (originally seen as another cornerstone of the universal welfare state) has been whittled away progressively over recent years – because too few people, and in particular too few people with political clout and influence, benefit from it. Legal aid is widely portrayed as a racket in which “fat cat lawyers”* and their scrounging, criminal and/or immigrant clients profit at “our” expense.
(* The average salary of a legal aid solicitor is £25,000. So they at least will get to keep their child benefit. Spongers!)
Once child benefit is perceived as a “residual” benefit paid only to low earners, it’ll become a softer target for politicians looking to save a few quid: an extended freeze on payment levels here, a further tightening of eligibility there. Before we know it, child benefit will be just another welfare payment that only “scroungers” get. As Chris Williamson MP points out, it is the poorest who will suffer most once social security is marginalised and limited only to Britain’s poorest people.
So there is an opportunity for Ed Miliband and for Labour here. Here is a chance to show how universality in public provision benefits everyone: to draw the lines that connect families on Sunderland council estates (who may not be suffering from this cut, now – but there’s still another £9 billion of benefit cuts to be announced) with middle class families in the south east (for whom this may be the only direct consequence of the benefit reforms).
We need to do this, not only because of the immediate issue of child benefit, but because the same lines preserve a universal health service, universal access to education and so on. Ultimately the choice is between universal services to which everyone contributes and from which everyone benefits, and a “safety net” approach in which those who can pay for good services, and everyone else makes do with underfunded and marginalised state provision.
Update: Left Foot Forward has an excellent analysis here, including details of how the new 65p in the pound “taper” under the Universal Credit will hit low-income families currently in receipt of tax credits. I’ve added the Richard Titmuss quote from LFF’s post to the start of this.