Monday, 4 October 2010

Ending Child Benefit for Higher Earners, policy u-turn from the Tories and unfair to many hard working families. Is it their 10p tax moment?

Yet another reneging of a pre-election policy commitment by the Tories on ending Child Benefit for higher earners. The Tories promised the earth before the May 2010 General Election in order to get elected, which failed, despite a global recession and a very unpopular Labour Leader. Phillip Hammond made a total commitment to keep universal benefits just before the election, now he says the Tories cannot afford to pay families with middle incomes Child Benefit.

Fascinating that the Tories announced this change, not in Parliament or even at the conference but on TV. I laughed at the Tory MP for Basingstoke who on BBC Radio Berkshire tried to justify the ending of Child Benefit whilst not knowing anything about the changes. Clearly George Osborne doesn't even tell his own party before he makes announcements. And what about the Lib Dems, are they still in coalition/ Do they agree with this change? Judging from the responses from Tories at the conference, many of whom sat down ready to enjoy their first conference in power for 14 years only to be told they have lost £2.000.

Whilst the details are scant, which is always a problem for sudden policy announcements many families with only one earner in the higher tax bracket will stand to lose thousands of pounds whilst a family with two earners close to the high earnings tax bracket will continue to receive Child Benefit. Why wasn't the emphasis made on family earnings and not individuals?

The more cynical amongst us will point out that this cut will take place in 2013, maybe to be paid back in a tax cut after the nationalised banks will be privatised yielding over £80bn. It is my view that in 2014, after the practical devastation of many public services there will be money to be given back by the coalition in the form of tax cuts for the very wealthy and some money back for hard working people and families, in time for the General Election of 2015.

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