Child Benefit - Should It Be Scrapped?

According to the Guardian 4.6 million women, who receive child tax credit directly, will be affected by the reforms to child benefit.  In addition, low-paid new mothers on £12.000 a year are losing £1.300 during pregnancy and the baby's first year via cuts to maternity pay, pregnancy support and tax credits.  Also they are losing a further £422 from cuts to child benefit over the same period.

The above figures were complied by the Commons library for the shadow equalities minister, Yvette Cooper, who intends to highlight the plight of women in the debate this coming week.

Apart from the complexities of the new system (where application has to be made not to receive child benefit), is child benefit necessary today?

Child benefit (or family allowance as it was called then) was first introduced the year I was born - 1946 - to give non-working mothers money when the wage-earning man of the house couldn't be relied upon to hand over enough for the needs of the family. The allowance was paid to all children with the exception of the eldest.  In those days many women had to give up work when they became pregnant
and in the past 66 years for millions of women - and indirectly children -the money was a life line.

In 2003 the then Labour government introduced Child Tax Credit in an attempt to reduce child poverty.  This tax credit can be paid to the employed and unemployed. All families with children and a combined income of up to £58,000 a year (or up to £66,000 a year if you have a children under 1 year old) can claim.  The basic amount is up to £545 a year but extra 'elements' are paid - if a child is disabled is an example.

Why does government have two systems which provide financial support for children (albeit through a parent/parents)?

David Cameron has said he didn't want every family with children to undergo means testing, but surely child tax credit is exactly that.

Wouldn't it be much fairer to scrap Child Benefit and promote Child Tax Credit for all families with children?  That way the necessity for those who earn over a specific sum to complete tax returns to opt out of Child Benefit would be eradicated and HMRC would have more time on their hands to perfect our basic tax calculations?

If David Cameron's proposal for working families to be able to claim up to £2,000 per child every year from their tax bills to cover the cost of childminders and nurseries comes to fruition, then surely Child Benefit must be consigned to the dustbin.

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The Welfare Bill

There was uproar in the Commons yesterday when MPs heard the Lords had voted against the Coalition's Welfare Bill to cap benefits at £26,000 per annum. Labour peers said they supported the principle of a cap but along with others they voted to change the legislation to exclude child benefit.

Listening to the debate over the weekend I was surprised to hear Iain Duncan Smith say:

‘The public thinks that homelessness is about not having any reasonable accommodation to go to.

‘That is not the definition. The definition inside government and places like Shelter is that children have to share rooms.

‘For most people who are working, their children share rooms. They would find that a strange definition.’

Shelter insist that is not the definition and it uses the same definition of homelessness as set out in the Housing Act 1996.

Officials later said that a house could be seen as 'overcrowded' if a girl and a boy, both older than ten, were sharing a room.  Overcrowding can be a reason for giving a family a new home.

I support the benefits cap because I know families where the income is below £35,000 and they manage without claiming from the state.  Benefits should be there to ensure those who fall on hard times do not suffer unduly, but work should always be more rewarding. There will always be the vulnerable in our society who require continual help and they must be given every assistance possible, but for those who don't work there has to be a limit to how much the taxpayer can provide.

People are correct when they say that the cap may price benefit recipients out of certain areas, but working people are priced out of those areas too.  The state has a responsibility to ensure that people in need are housed, fed and clothed, but they don't have the right to live wherever they want.

If the Coalition is serious about helping people into work, upping the personal allowance for those at the lower end of the salary scale would help those currently in work and encourage others to enter the workplace.  So often I hear 'there are no jobs' and there are those who think it's the government's responsibility to provide them with a job, but that is unrealistic. If thousands of economic migrants can find work then it is available. The work may be low paid but then it's usually unskilled.

In the UK there are plenty further education institutions that offer skill training and we also have the Open University which provides free courses to those on benefits. There's no reason why many long-term benefit claimants, who are fit for work, cannot upgrade their skills.

My sympathies at the moment are with those hard working families in which a parent has lost their job because of the continuing recession. Family income has been halved, or in one case I know reduced to a third, and because he is highly skilled in a specific area, there is little hope of him gaining similar employment in the near future. However he refuses to be defeated and recently purchased a trailer for his car because he intends to become a jobbing gardener until he can find a position within his own industry. Knowing how the weather can affect this type of work, he has registered for an OU course in order to show future employees he hasn't been idle. This family may well have to move house to a cheaper area but they're not complaining. "We have our health and that's what matters most," I was told.

Because of the unlimited benefits available here for so long, too many people have lost the ability of taking responsibility for themselves.  We have a benefits culture, of that there is no doubt, and there have to be changes. Capping the system at £26,000 - with allowances for those who have complex needs - is a start. Raising the threshold of the personal tax allowance should be next in line.

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Lies, Incompetence, Hypocrisy?

A guest post from John Souter to whom I offer my sincere thanks for his contributions.

Lies Incompetence Hypocrisy?

Real poverty is in the process of being dramatically increased by the measures now being implemented through welfare reforms.

Reforms that were initiated by Labour not, I hasten to add, as a result of the financial meltdown of 2007/8 but were introduced by stealth as the Social Security Act 2006 and passed by Parliament in 2007.

These affected housing benefit conditions and cleared the way for the implementation of the local housing allowance (LHA) along with the introduction of job seeker allowances and all the other euphemisms engineered to cut the responsibilities of the State to minimise the costs associated with the effects that same State failed to address; which was, and still is, its failure to create a thriving and progressive real economy.

So these measures were all in the Labour pipeline even before the idiocy of the financial gurus went into meltdown and the present incumbents in Westminster, while they may have added to them, are probably silently grateful to Labour for doing all the spade work necessary for the acts and regulations to be implemented and for them to get the kudos.

The result will be an increase in poverty levels through all the phases of life the poor are exposed too, but with an emphasis on the very young and the retired old and where many of the ‘customers’ of welfare will see their benefits cut; adding 10 - 50% on their outgoings to meet rent and council tax bills.

Which begs the question: what exactly are the responsibilities and expected competence of the representatives we supposedly send to Westminster to oversee our interests and well being?

I ask because the stealth adopted to introduce these measures are very similar to the methods used by Brown when he removed the 10% bracket on income tax; and the method used by Osborne to cut the Winter Fuel Allowance in the 2011 budget. Namely tagged on as an aside and blinded by the main points and message they wanted publicised: and, while by now we generally are aware of the shallow capacity of the media to report on anything in a meaningful way beyond bias and rhetorical handouts, our representatives should be capable of reading, analysing and evaluating the salient points of any proposed Bill that’s placed before them before its passed into legislation. 

Given their recent record, the examples mentioned, and the paucity of any discussion or exposure of the 2006 Act in the hustings and debates for the elections on May 5^th I very much doubt if the majority of candidates – old or new – are aware of its ramifications and that the few who are, are desperate to keep it closed tight in the obfuscators box.

This is a Labour decision, in the control of Westminster which, because it’s not a devolved issue, will (Have) been implemented throughout the UK as of the 5th April 2011.

A dividend of Union created by Labour, implemented and refined by the coalition and sneaked on to the statutes under the blitzkrieg of financial idiocy being transfused with massive bailouts followed by the extortionate bill of their intensive care being met from the rumbling belly’s and empty purses of the poor.

They have a name for it – they call it Austerity – and they who shout for it are not the ones who have to live with it. But they do want you to believe your welfare, your NHS; your life is safe in their cold incompetent grasping hands.

John Souter 1/5/11

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