The Observer - Labour Set To Target Middle Class Benefits

[housespider]

Child benefit for everyone has always particularly irritated me!

Gaby Hinsliff

The Observer, Sunday 13 September 2009

Labour set to target middle class benefits• Winter fuel payments

The middle classes could have to bear the brunt of cutting the national debt amid growing debate in the Labour party over whether universal benefits, including the pensioners' winter fuel payments and child benefit, can be sustained.

The admission by the chancellor, Alistair Darling, that public spending will reduce under a Labour administration has opened new questions over a group of benefits that are not means tested.

A senior cabinet aide said measures whereby top earners lose out in order to benefit the poor were proving popular and might even be needed to shore up Labour's core vote, overriding past concerns over upsetting home counties voters: "Distributional politics are working well for us at the moment – how popular is the 50% tax? It's off the charts, while [Tory proposals on] inheritance tax just hammers home who they are for."

Asked whether that might trigger a rethink of universal benefits such as the "winter warmer" fuel payment worth up to £400 and free TV licences for the over-80s, the aide added: "That's a good example. We have got to make a choice on that.

"When we are on 35% in the polls, we can go after southern England: our problem now is not the swath of people who have left us for the Tories, it's the people going to the BNP and the Greens and the Liberals."

Another senior government aide said while debate was only beginning, there were questions over some payments, particularly to the elderly: "I personally think we have got to look at universal benefits. It is unsustainable."

Such changes risk a middle-class revolt and would divide the Labour party. But growing confidence that the worst of the recession is over, with Gordon Brown due to tell the TUC's annual Congress this week that Britain is now "on the road to recovery", has focused attention on the next task: rebuilding public finances.

Brown will say the recovery still must be "nurtured" and attack Tory calls for spending cuts now, urging Britain "not to put the recovery at risk".

But he will begin a debate on rebalancing the books once recovery is secured, advocating "empowering those who deliver services to innovate and secure greater value for money", not cutting public sector jobs.

His words came as a YouGov poll for the Sunday Times showed 60% of voters want to see spending cut to restore public finances and only 21% favour tax rises. And some key Labour figures argue that, faced with a £175bn deficit, the government may also need to review some universal benefits and plough cash back into helping the poor. "I think there are some things to be looked at hard," said one former cabinet minister. "I've just been sent my claim form for a winter warmer fuel payment – do I really need that? A bus pass? No National Insurance contributions after 60 to 65 no matter what you are earning? Free TV licences?"

Both the Tories and the Liberal Democrats are threatening to scrap child tax credit for families on high incomes, restricting it to modest earners, and it is understood that the government has not ruled this out, despite technical difficulties.

One Liberal Democrat frontbencher said that his party, seeking savings of up to £60bn, had not ruled out taxing or means-testing child benefit either: "It has not appeared on our [public] list of items identified for reduction, but the list is not exhaustive. [Child benefit] is expensive. I was surprised when I was told how much it was."

However, shadow chief secretary to the Treasury Philip Hammond told the Observer that attacking universal benefits was "not part of the debate in our party yet", citing fears that means testing would discourage saving: "It's superficially attractive thinking about means testing benefits that go to people who apparently don't need them, but once you start introducing means testing you get perverse incentives."

Last week the TaxPayers' Alliance, an influential rightwing pressure group, argued in a joint report with the Institute of Directors that free TV licences and child benefit – now worth £20 a week for the oldest child – should be scrapped.

Fresh interest is also emerging in so-called "user charges", particularly in transport. Hammond said that under a Conservative government councils would be free to experiment. "If local authorities judge that within their area there is a case for a congestion charge regime and local citizens agree that in a referendum – as they have mainly spectacularly failed to do so far –well, that's the price of localism," he said.

[Guest pioneer31]

I thought we lived in a classless society.

Or is "middleclass" newspeak for "has a job"

[CrashConnoisseur]

I thought we lived in a classless society.

Or is "middleclass" newspeak for "has a job"

You got it.

More means testing just creates more incentives to remain poor. While high earners will apparently leave the country if they face a marginal tax rate over 50%, those on lower earnings face much higher marginal deduction rates (tax, national insurance, tapered reductions in tax credits and benefits). Means testing is part of the problem, not part of the solution.

'Absurd':

http://stumblingandmumbling.typepad.com/st.../08/absurd.html

Here's a question: Take a married couple with two children under 11 and pre-tax earnings of £200 a week. If they get a better job, raising their earnings to £300 a week, by how much does their net income rise?

£60? £50? £40?

Nope. £8.52.

Yes. £8.52. That's a marginal deduction rate of 91.5 per cent.

Edited September 13, 2009 by CrashConnoisseur

[bogbrush]

They really are complete b@stards to the worst off. Not content with squandering their money, they now want to tighten the system of benefits & incentives to make it even less likely that these guys will climb out of their poor positions. Backed up by an education which squeezes any initiative out of them this really amounts to sabotage of people lives.

The "middle class" will be disadvantaged of course, and it's another wind up,but imagine yourself being on the other side, where the point of coming out of the benefit system is reduced even further.

[Johnny Storm]

"When we are on 35% in the polls, we can go after southern England: our problem now is not the swath of people who have left us for the Tories, it's the people going to the BNP and the Greens and the Liberals."

Yes concentrate on those people who are too dim to realise that anything other than a vote for conservative could mean another term of Labour.

[Minos]

Is this the first step to the middle classes paying for their own healthcare? The logic is identical.

If the middle class pay for their own, who will pay for everyone else?

[19 year mortgage 8itch]

Child benefit for everyone has always particularly irritated me!

Communist

[bogbrush]

If the middle class pay for their own, who will pay for everyone else?

The middle class?

But then there won't be one - not because they leave but because there's no point joining it.

[Bloo Loo]

the best cuts would also be non means tested.

salaries for Public Sector workers.

I propose a 50% cut of all PubSec Salaries above a point of £25,000. so a £50,000 salary would be cut to £37,500....still a high salary.

[singlemalt]

Child benefit for everyone has always particularly irritated me!

Silly twisted logic has always particularly irritated me.

[LuckyOne]

Is this the first step to the middle classes paying for their own healthcare? The logic is identical.

In other countries with universal care, it manifests itself as a "Health Care Surtax For High Income Earners".

A well spun way to increase tax rates that sounds "fair" to the masses. I give it less than two years before we have one here too.

[housespider]

Communist

I for one would not object to having my child benefit removed - I don't 'need' it and we currently donate the whole amount to charity. I know many people who also do not actually 'need' it. Two families I know in particular definately do not need it, one family is receiving CB for 4 children, all the children go to private school and have a horse each etc, etc, etc - their child benefit goes towards looking after the horses (for crying out loud). The other family receive CB for 6 children, half of which are also at private school, they 'save' their benefit for their 'Mummy & Daddy go alone' holiday once a year!

I think that having my opinion just proves that I am 'sane', nothing more and nothing less.

[19 year mortgage 8itch]

I for one would not object to having my child benefit removed - I don't 'need' it and we currently donate the whole amount to charity. I know many people who also do not actually 'need' it. Two families I know in particular definately do not need it, one family is receiving CB for 4 children, all the children go to private school and have a horse each etc, etc, etc - their child benefit goes towards looking after the horses (for crying out loud). The other family receive CB for 6 children, half of which are also at private school, they 'save' their benefit for their 'Mummy & Daddy go alone' holiday once a year!

I think that having my opinion just proves that I am 'sane', nothing more and nothing less.

Champagne Communist

[Minos]

I for one would not object to having my child benefit removed - I don't 'need' it and we currently donate the whole amount to charity. I know many people who also do not actually 'need' it. Two families I know in particular definately do not need it, one family is receiving CB for 4 children, all the children go to private school and have a horse each etc, etc, etc - their child benefit goes towards looking after the horses (for crying out loud). The other family receive CB for 6 children, half of which are also at private school, they 'save' their benefit for their 'Mummy & Daddy go alone' holiday once a year!

I think that having my opinion just proves that I am 'sane', nothing more and nothing less.

So without the child benefit, the horses would starve or the parents wouldn't be able to go on holiday?

[uptherebels]

Champagne Communist

Premieship footballer on 120k PER WEEK, has x amount of kids, get child benefit. Someone with no kids and earning 12k per year, is paying towards the other fellas child benefit.

Are you OK with that ?

[Minos]

Premieship footballer on 120k PER WEEK, has x amount of kids, get child benefit. Someone with no kids and earning 12k per year, is paying towards the other fellas child benefit.

Are you OK with that ?

How about if you can't afford children, don't have any?

[19 year mortgage 8itch]

Premieship footballer on 120k PER WEEK, has x amount of kids, get child benefit. Someone with no kids and earning 12k per year, is paying towards the other fellas child benefit.

Are you OK with that ?

Yes,

How much tax does the premiership footballer pay, only to get back £20 a week? The footballer would probably pay more in fuel tax for his bentley than all the tax the low earner pays.

Edited September 13, 2009 by daiking

[Johnny Storm]

How about if you can't afford children, don't have any?

There are too many people. Only people that can afford to have children should have them. People who decide they cant afford to have children and therefore dont have them should not be paying for others who equally cant afford them.

As we have seen in society. The more well to do intelligent people are waiting to their 30s to have a child and then struggling due to fertility problems. The 16 year old chav has 4 by the time she is 20 to different rainbox coloured fathers.

This will be the doom of our society. Out bred by chavs and immigrants, who we pay to breed while we do not.

Edited September 13, 2009 by Johnny Storm

[Girly girl]

The point of non means tested child benefit was that it was paid to the mother so she had some cash her husband couldn't control because plenty of men would walk out of the factory on friday night, get pissed and blow the family budget leaving the kids without food for the week, even if they earnt a fortune the wives would never see a penny of it.

And that still happens today, less so in the poor families, they simply don't get married and both claim benefits seperatley but plenty of "middle class" women don't work and aren't allowed to spend their husbands money either, I know of at least one who's husband thinks their babies should only get toys and clothes on it's Birthday and Christmas, she spends her Cb on going swimming, having a coffee with other mums, buying the child age appropiate toys that don't always arise at Birthday time, all keeps it all hidden from the tight ******* she's married to. He's probably saving for a house.

[ChadzKhan]

There are too many people. Only people that can afford to have children should have them. People who decide they cant afford to have children and therefore dont have them should not be paying for others who equally cant afford them.

I see your point.

As we have seen in society. The more well to do intelligent people are waiting to their 30s to have a child and then struggling due to fertility problems. The 16 year old chav has 4 by the time she is 20 to different rainbox coloured fathers.

Well that's not the chav's problem or fault if the govt gives them incentives to do this, plus what's stopping the "well to do intelligent people" from breeding? Surly their intelligence should be enough for them to know having children later in life is somewhat more difficult and could have more complications.

This will be the doom of our society. Out bred by chavs and immigrants, who we pay to breed while we do not.

Yes but again the govt has a major share of the responsibility in this!

[Girly girl]

That great bubble invention the Child Trust Fund can't be long for this world. Perhaps the shortest great idea of how to spend someone else's money ever.

The presumption that 'Child Benefit' goes to the mother is objectionable given the 'equality' issues rammed down the throats of a certain group's mouths everyday throughout their entire life.

Maybe in some home's it's very outdated concept, laughable almost but in other households I'm thinking of immigrants in particular childbenefit maybe the first taste of financial independence and a source that can be relied upon that the mother has ever had assuming she gets it, but that was the orginal idea.

[Girly girl]

There are too many people. Only people that can afford to have children should have them. People who decide they cant afford to have children and therefore dont have them should not be paying for others who equally cant afford them.As we have seen in society. The more well to do intelligent people are waiting to their 30s to have a child and then struggling due to fertility problems. The 16 year old chav has 4 by the time she is 20 to different rainbox coloured fathers.

This will be the doom of our society. Out bred by chavs and immigrants, who we pay to breed while we do not.

But this is the problem, even if you remove all the benefits literally every one of them these people will still have children, who will starve and then mug people, murder and we will return to Victorian Britain, any one with an ounce of intelligence knows "they" will always out number "us" purely because we are going for quality over quanity.

So we either educate them so they want less children, give them a better quality of life so they don't need to mug, rob, burgle or murder us or we have more children ourselves ?

Nobody has children for the benefits, they do it because even in this day and age they are too thick to stop it happening or too thick to think about the long term implactions or just plain do not care, everyone loves a baby (lots of attention for the mother, something to love that doesn't answer back), it's snotty faced 5 year olds that swear nobody likes, so they have another baby.

Edited September 13, 2009 by Girly girl

[Johnny Storm]

Because the more well to do people are putting career and home buying first, especially due to the price of houses. It wasnt that long ago that the man could work full time, the woman raise the children and still afford a nice home.

And although we can blame the government for a lot, that isnt going to matter whos fault it is.

I dont think the will of any party is strong enough to stop this trend. So im resigned to Britain becoming even more of a sess pit than it already is.

"So we either educate them so they want less children, give them a better quality of life so they don't need to mug, rob, burgle or murder us or we have more children ourselves ?"

Thats a great theory, but as we can see it does not work. We are already spending more money than we take in taxes on giving people money on benefits to stop them from stealing. There is a point where it is impossible for those to work to support such a great number of those that do not. Are we almost there? I think we are.

Edited September 13, 2009 by Johnny Storm

[Caribbean Beauty]

Much if not most of the child payments are being paid to families now living overseas - it's a huge scam which was known about years ago when I worked for immigration and is probably much worse now.

In the "old days" of the 80's and back one had to take the child benefit book of vouchers to the Post Office and cash them - requiring one to be resident in the UK. Now, however, once one has either given birth to a child here (OR imported a child to the UK as immigrants) the CB is paid out remotely via electronic bank transfer to an account, with no checks or updates on UK residency ever made after that.

Many african or eastern european (for example) village economies are likely to be heavily supported by such remote CB payments (and, more recently, ongoing working and child tax credit payments which - similarly - just run and run by direct bank credit forever, even after the claimant has returned home abroad!).

About 15 or so years ago we conducted a joint immigration-benefits exercise on the immigration embarkation control at Thiefrow airport (aka departures) and recorded the outbound families' details where they were departing the Uk with one way ticketing and all of their baggage etc, indicating a permanent move abroad. We found that the majority were in receipt of live CB and sometimes other benefits too (this is pre-wtc days). The exercise resulted in quite a few CB stoppages but was short-lived.

Why is Poland now doing so well and all the young Polish families returning home? Because they came over, either with kids or gave birth here, worked long enough to organise healthy WTC and CTC and CB ongoing bank wire payments, then cleared off home to live a luxury life at our expense - a family of 4 might be paid anything from £10-15k per year, forever, remotely.....there must be hundreds of thousands - possibly millions - of such live claims being paid to people overseas. And all the recipient has to do is keep their UK bank account going, and a contact address for a friend to receive the annual WTC update forms.

Old age pensions add to the problem - hundreds of thousands of these are being paid out to pensioners who moved abroad years ago, have long since died yet whose families continue to collect the payments, pretending the pensioner is still alive. DWP fraud inspectors spend a lot of time visiting remote villages in, for instance, Pakistan, in search of these long-dead pensioners. Much money is saved through pension stoppages (nobody is ever prosecuted in these corrupt countries of course) but more is lost. Why does none of this reach the media? IMO it is because until the recession New Lab did not care about such losses, preferring to avoid offending Johnny Foreigner with intrusive investigations rather than giving a toss about keeping Uk revenues for the benefit of people actually living in the UK.

(the other famous scandal we used to encounter was child-lending - where, for instance, one Romanian/Somali/etc would borrow friends' kids and claim extra CB - so every female with 0-3 kids of her own would almost always end up claiming benefits for 3-5, typically, depending how brave they felt).

I only hope that major clamp-downs follow the election. Just 1 DWP fraud office working abroad on, say 30k salary and expenses plus, say another 30-60k Cost of Living Allowances (incl flights, hotels, land rover, guards etc) can bring savings in benefits and pensions stoppages of many times his or her own costs each year. Often all they need to do is follow up anonymous tip-offs from these overseas claimants' enemies - it is easy, if sometimes risky, work and would save us a fortune. Much of it could even be conducted here in the UK simply by writing to invite claimants into an office (with ID) for periodic chats. The losses to us must run into the billions and make me sick.

[Ulfar]

There are going to be more benefits than child benefit to feel the axe.

The whole mess that is child and working tax credit could go and to compensate people just up the tax allowances.

As for people abroad claiming benefits this has to be stopped, benefits should only be paid to those resident in the UK and only those who are UK citizens.

If immigrants want benefits claim from your own country, if they wont pay because you are here go home.