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Monday, 4 October 2010

British tories end universal welfare !

The universal welfare state moved a step closer
to destruction today when Chancellor George Osborne announced proposals to end child benefit payments for all higher-rate taxpayers.

Mr Osborne was speaking at the annual Tory conference in Birmingham where he revealed the benefit would be cut from those earning over £44,000 a year.

The Conservative Chancellor said the plan, to be introduced from 2013, aimed to raise around £1 billion that would be put towards plans to bring benefits together into a single universal credit.

It comes as Mr Osborne prepares to unveil massive cuts to Whitehall budgets in the spending review on October 20.

At present, child benefit is paid universally and is worth £20.30 a week for the first child and £13.40 a week for any other children.

Under the new restrictions families with two earners paying basic-rate tax would still receive the benefit even if their combined salary is more than £44,000.

This could mean households with a total income of £88,000 would still be eligible for child benefit while single-earner households taking home half that would lose out.

Mr Osborne admitted there would be "anomalies" and said this was because he did not want to introduce a complex means test into the child benefits system.

He added that he hoped higher rate taxpayers would do the sensible thing and stop claiming child benefit.

Left Economics Advisory Panel co-ordinator Andrew Fisher described the move as "an ideological attack on the principle of universal benefits" and believes that the £1bn saved will have little bearing on the economy.

He said: "If Mr Osborne is worried about lower-rate taxpayers subsidising the rich, why not raise taxes by charging 50 per cent on income over £100,000?"

"By 2013, child benefit will have been frozen for three years - a real-terms cut of 10 per cent to an already low level of benefit."

And Mr Osborne faces conflict with his Liberal Democrat peers as they voted to safeguard universal child benefits at their own party's annual conference in Liverpool last month.

He also upset charities, with Child Poverty Action Group's chief executive Alison Garnham arguing that hitting families with children was "very unfair."

Labour MP John McDonnell accused the Tories of using the economic crisis as an excuse to return to a Poor Law-type system in which benefits are distributed to the "deserving" poor and its recipients are stigmatised in an attempt to destroy the welfare state.

And he argued that the reason the coalition was delaying the introduction of this cut was for fear that the reaction from families set to lose out would add to the growing anger against swingeing cuts.

A Treasury spokeswoman said the reason the savings were not being made from taxation was because overspending had been identified as a key field in tackling the deficit.

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