Sunday, January 06, 2013

The Beginning Of The End (Of The Journey)

Well, tomorrow sees the end of Child Benefit for those bloated plutocrats with a household income of £50,000 and a stay at home mother .

Thank heavens it's been preserved for those struggling families on £98,000 a year and a working mother, not to mention the 37,900 children living in Poland who receive it. The Tories are the party of the Polish family, after all.

I call on the commenters - is this the first removal of a universal benefit since the NHS introduced prescription charges, and a young minister, a left-wing firebrand called Harold Wilson, resigned in protest in 1951 ? Wilson, as Prime Minister, removed the charges in 1965, a rare example of political consistency, then reintroduced them in 1968. They've been there ever since.

The point of universal benefits, like a universal postal system, is social cohesion. They showed that the Welfare State was for everyone, that we were indeed all in it together. The more benefits are means-tested (an expensive and bureaucratic procedure), the more the welfare state is purely for "the poor" and not for "everyone", the less support it'll have from what Churchill called "the broad masses of the well-to-do" and the more uncertain its future.

 For some in or around the Tory party, for the millionaire venture capitalists advising on employment legislation while themselves paying only 10% tax, or the billionaire retailers advising the government on efficiency, while ensuring their company dividends go offshore, that may be considered a feature rather than a bug. 

 On Tuesday there's the vote on the 1% benefits freeze - for 3 years, at a time when the new BoE Governor, Mark Carney, has already suggested that his predecessor Mervyn "Money Printing" King is a tad hawkish on inflation targets, and that some loosening may be required in the fiscal straitjacket that has seen inflation continually above the 2% target.

I have no problem with someone putting forward the argument that benefits are too high, that they afford more than a minimum standard - but no one in the Tory party is doing that. Instead, it's proposed that they should be cut because of 'fairness'. Yet they're meant to afford people a minimum standard of living. When food and electricity prices rise by 10%, and benefits by 1%, what's going to happen to those people ? And that's just one year.            

I must say, the next few years are going to be interesting, in the Chinese sense.

The suicide rate fell dramatically at the start of both World Wars, as those otherwise tired of life decided that, like Vince and Muskie, they just wanted to stay around just to see what happens next.

I feel the same. The next few years are going to be awful but fascinating.


JuliaM said...

"The more benefits are means-tested (an expensive and bureaucratic procedure)..."

Oh, you're not kidding!

But then, you see this as a bug. Government sees it as a feature.

Mr Grumpy said...

Those bloated plutocrats have not yet been punished sufficiently: mega tax breaks for childcare are on their way. But not for those whose spouses obstinately remain "missing from the workforce"; they can jolly well stump up to pay for other people's childcare arrangements.

Anonymous said... one in the Tory party is doing that. Instead, it's proposed that they should be cut because of 'fairness'

They have to use phrases like this though - if that say that 'benefits are too high' the Tories will be attacked for hating the poor by every Labour shill in the media.

Given that the EU and the civil service are pretty much unreformable short of a revolution, the only real way to make serious cuts is to lower the benefits bill. They could try to lower HB by going on a building spree, but that isn't without problems either as long as welfare attracts migrants. We're all going to get poorer no matter what happens.

Ryan said...

It would, of course, be fairer and simpler to increase VAT or income tax. However, the government knows that to do so would make it rather too clear that the 50% overall tax rate would have been breached and at that point the entire system of government starts to lose credibility. So they are increasing the effective tax rate on the middle class by cutting these benefits.

Fact is that the inexorable rise in the proportion of the wealth of the citizens that is taken by government, not eased one bit by Thatcher or any other Tory PM despite their claims, is leading democratic government in this country to the brink of termination.

It is also increasingly clear that ordinary working people are merely paying substantial tax into a system that costs them more than if they paid directly for education and health. They are getting nothing back, but losing the buying power that they would have if they paid directly. There are those making big money out of the government.

Take universities. Cost per year is £9000. An engineering course may easily have 100 students in each year, i.e. a single course will rake in £900,000. But the number of teaching hours is just 30 weeks of 30 hours - a total of 900hrs. Thus the universities are claiming £1000 per hour for such a course. Where is that money going? Not to the teaching staff or the university.

The universities must have been costing the taxpayer so much before fees were introduced by Labour, and yet introducing fees did not result in a reduction in tax nor save us from a huge deficit. They are spitting in our faces and laughing. When are people going to wake up? Probably when the greed of the power elite exceeds the ability of the nation to keep feeding the monster.

Edmund Berk said...

Spot on re the incoherence of this approach to 'social justice'. There's another glaring dimension to this IMHO.

At all income strata below the super-rich, those rearing the next generation and thus ensuring the show goes, live a very much more frugal life than their childless peers.

And that very much applies even in the bracket of those fortunate enough to earn £50k. I know people like that who scratch by, with holidays in a leaky caravan on a good year. Childless peers are on two or three holidays a year, and all of life's other amenities - not to mention occupying the family homes.

It seems to me that if we must go down this route, a rational government, especially one committed to a bloated state, should be placing an additional tax burden on childless earners over £50k, before removing benefits from parents.

That would, however, no doubt be discriminatory.

Anonymous said...

"I know people like that who scratch by, with holidays in a leaky caravan on a good year"

We had four kids on a single income slightly less than that, but I'd bought my house back in the 70s (9.5K!) so we could lash out on Whitby and Normandy.

Susan gave up a well paid job (as nursing goes) to be a full time mother. We do sometimes say what nice cars we'd have, and what nice holidays we'd take, had we not had them, but it's only academic knowledge.

"I know more than a few couples, now in their fifties, still toned and honed from the gym and swimming, leading a good life - the million-pound house, the boat, skiing three or four times a year - and no children."


Anonymous said...

But ... I should say we were lucky. I bought my house early, and I earned twice the average wage.

Most couples just can't afford a house unless the wife works. So have we advanced since the 1960s.

Ryan said...

I have an income of £50,000 a year. I own my £400,000 house outright. My wife has never worked. I am very comfortably off and I'm not about to start pleading poverty. However, the increasing taxes on my salary bracket are leading to me to [1] consider my fellow citizens are nothing but a bunch of thieving bastards who should be shot on sight and [2] that early retirement at age 53 is looking very attractive, folowed by emigration to somewhere warmer and more inviting - in which case the government can kiss goodbye to my tax completely.

Bear in mind that I played no part in the current government deficit having written letters to MPs and the papers complaining about the previous government's expenditure plans and having never voted for it. Nevertheless, since employed people earning >£50,000 are the only people making sufficient wealth that can be taxed to pay for the deficit, that is what is happening. Clearly that makes a mockery of justice, citizenship and democracy.

With more than 50% of my income now being taken from me through income tax and VAT this can't go on. I am quite sure that the increasing levels of tax being taken from the well-off employed while they get nothing back and see the material condition of the nation deteriorating will result in very many of them emigrating and/or retiring early or working short-time. A brain-drain/skills shortage will be the likely result.

Notice that the present government has put nothing in place to limit future government expenditure or future government debt. Therefore I perceive that ever increasing levels of tax for me and for my children is the only possible outcome, while those that clamour for a share of my income grow ever more numerous, against my expressed wishes.

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