Wednesday, 6 October 2010

Why not just raise income tax?

A YouGov poll in the Sun newspaper finds that 83% of respondants think that cutting Child Benefit for the better-off is fair, which is a puzzle given all the negative publicity and violent reaction to the policy since it was sprung on the Tory Party conference on Monday morning.

Can the policy really be so popular among the public and yet cause so much panic among its progenitors? TBH, I don't know: maybe the question was posed in a particular way that elicited a particular answer, maybe it was asked before the objections to the policy became common currency in the debate. Maybe it is a true reflection of public opinion. Who knows?

Meanwhile the reaction of the  Tory Party leadership is to flip-flop over the very same subject, believing the announcement to have been a mistake or at least mismanaged. After taking flack from its biggest supporters in the Daily Mail and The Telegraph, the Conservatives have panicked. In the face of a barrage of criticism of the impact of the cuts on single earning families where one parent doesn't work and looks after the kids, they are now promising to introduce a married couples tax allowance, a policy which is not in the coalition agreement and which the Consrvatives only ever envisaged being applied to standard rate taxpayers in any case. They seem to have forgotten the best political advice in the circumstances: if you are in a hole, stop digging!

Anyway, why did the Tories choose to design this particular policy in this particular way? Why go to all the bother of making some families eligible for the benefit and not others, introducing even more anomolies into the system and alienating those parents, many of them middle class Tory voters, who chose to stay at home and look after their children?  If you want to bring in the extra £1billion that the change will generate, and you want the better off to pay, why not just tax the higher rate taxpayer at 0.5 p or 1p more, whichever amount will get you the money you need? 

The answer is of course and as always with the Tories, ideological. The cuts are being sold as "fair", taking from the rich not the poor, which is unremarkable and inoffensive. But the real signficance is that they undermine the principle of universality... the belief that "we're all in this together", that comes from all groups in society receiving the same entitlement to benefits.

Create a benefits system that applies only to the poor divides the rich from the poor even more. It emphasises the differences in wealth that already exist and makes another separation between "us" and "them". The Conservatives believe that a system that applies only to the poor will, over time, become a poorer system. And such a system will be less regarded, easier to neglect and underfund, more like the poor law systems of late Victorian and Edwardian times.

Ironically, for all the selling of this policy as "fair", the Tories real aim is to creat a more unequal society and a less fair society. That's the Tories' prize. Fairness doesn't come into it. And that's why they will not raise taxes for higher earners, even although that is the obvious way to get the money they need. They are against it precicely because it would be fairer and more equitable. All the Conservative cries of "fairness" are just a diversion from their long term ideoligical nirvana: less tax for the rich, more wealth for the few, keep the middle classes in a balance of comfort and fear, add a few crumbs of conscience money to make it look as if you "care", and let the poor manage how they can.

Tory Heaven. And welcome to it.....

BTW, a funny Paxman interview... when did Theresa May, Minister for Women and Families, learn of Georgey Boy's cuts to Child Bernefit...? Priceless. Poor Terry, she looks even more blankly stupid than usual...

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