I never thought I’d hear myself say I agreed with George Osborne, but I find myself now saying “I do”. This is one sacred cow that should have been despatched some time ago.
I’m talking of course about George Osborne’s recent announcement that Child Benefit for Higher Rate Taxpayers is going to stop. In his speech at the Conservative Party Conference, he said:
It’s very hard to justify taxing people on much lower incomes in order to pay the child benefit to some of the better off in our society.
For some reason this seems to have rattled a few cages, although why I really cannot understand. When you look at it from Osborne’s perspective, the common sense shines through. Why should someone earning less than £10,000 a year have to pay tax in order to pay welfare benefits to someone earning about £44,000 a year? It just doesn’t compute.
Welfare benefits were introduced for the benefit of the poor, as a way of helping the less fortunate, the less gifted and to provide income directly to a woman who, in the days of weekly cash pay packets, might never see enough money coming through the door to feed the family because she had a drunk for a husband who spent most of it in the pub on a Friday pay day.
These days so many of these factors have changed. Pay packets are rarely cash, but paid by bank transfer, and more often than not, paid monthly now. And the rich have certainly got richer.
When I worked as an IFA (Independent Financial Advisor) in the UK, when a higher earning couple had a new baby one of the first things to recommend to them was to invest this money for the child’s future. Probably the only time the parents’ did not agree to this was when they liked government bonds more than shares, but overall it was an easy sell. By saving it, it would help pay for future University Fees, a wedding, a first car – things that many poorer families would consider to be luxuries.
Opponents of the cut include the Child Poverty Action Group, The TUC, Barnados and even Miranda Whitehead, vice-chair of the Women Liberal Democrats said she was “disappointed”.
Are these people completely mad? They’ve certainly lost the plot. Maybe they’re just looking at the self-interest of the lost investment the government had been making for their rich kids at the expense of the poorer kids of the supposedly special interest groups they were supposed to be supporting?
So, yes, I do agree with Osborne on this one. Common sense has prevailed, and that’s only something that comes in quantity with a coalition government.
We should have more of them.