Tuesday, 5 October 2010

Today's newslinks
George Osborne risks wrath with benefits axe...

George Osborne blue background"George Osborne risked the wrath of middle-class Britain by announcing the axing of £1bn ($1.6bn) in child benefits for higher rate taxpayers, in an attempt to convince the country that looming public spending cuts will be “tough but fair”... Households with a higher rate taxpayer – earning more than £43,875 – will in 2013 lose their child benefit, worth roughly £1,000 for the first child and £700 for subsequent children. This measure would impose a high marginal tax rate on income above about £44,000, creating a cliff -edge where someone entering the 40p tax bracket with three children would lose £2,400 in child benefit. Dual-income households – say with each partner earning £40,000 – would not be affected." - FT (£)

...as stay-at-home mums are furious...

"Middle class stay-at-home mothers rose up last night against plans to strip them of child benefit... Many said they would be unable to cope. Others said they would be better off divorced. But the main complaint was that the cuts will hit families with only one breadwinner harder than households where both parents work." - Daily Mail

...and many editorials and commentators are also alarmed...

"In opting to axe the benefit from anyone earning more than £44,000 a year, the Coalition has chosen the most brutal option. It is hard to see how it passes the fairness test. A family with two children and one breadwinner earning £50,000 a year will lose £1,700 at a stroke. The family next door, also with two children but with both parents working and earning £42,000 each, will not lose a penny. The benefit withdrawal also undermines the Conservative Party's claims to be the party of the family." - Daily Telegraph editorial

"Can it possibly be right that a man earning £44,100, whose wife stays at home, loses the family’s entitlement to child benefit, while a couple who both work, earning £87,000 between them, will still keep their benefit? Worryingly, yet again, the political classes are penalising the traditional family unit of a man working hard as the breadwinner and a mother bringing up their children at home to be responsible, balanced citizens — a role, incidentally, which is of huge value to the state." - Daily Mail editorial

Picture 17"As the Institute of Fiscal Studies points out, a family with two children receives £1,750 a year in child benefit. A one-earner couple with two children with a gross income of £43,876-£46,850 would be worse off than if their income were £43,875. Crazy. A one-earner couple with an income of £43,875 would need a pay rise of £2,975 to ensure they were no worse off after paying direct tax and losing child benefit. This doesn’t make sense – especially given that Osborne wants to eradicate perverse anti-work incentives elsewhere in the system." - Allister Heath in City AM

"Not since the poll tax can I recall a single fiscal measure that takes so much money away from a significant group of voters." - Patrick O'Flynn in the Daily Express

...but The Times and FT gives the Chancellor their backing...

"This was a brave decision in that the losers are the articulate middle class... But, more important, this was the right decision. The fiscal crisis means that the Chancellor needs to find savings. Mr Osborne’s speech set out a clear direction and purpose." - Times (£) editorial

"Mr Osborne deserves credit for taking the axe to universal welfare, at least in the form of child benefit. True, this is not a big money-saver. Withdrawing child benefit from higher rate taxpayers reduces the overall welfare bill by just £1bn. But it sends an important message of intent." - FT (£) editorial

...although Children's Minister Tim Loughton is apparently suggesting the plan could yet be revised...

Tim Loughton 2010"Tim Loughton, the children's minister, admitted that the move could be in need of revision after unions, poverty campaigners and economists lined up to attack the plans. He told Channel 4 News: "If there are ways we can look at compensating measures for those genuinely in need that will be looked at in future budgets. If the thresholds need to be adjusted there's plenty of time to look at that." -Daily Telegraph

...but David Cameron has this morning continued to defend the policy

"David Cameron defended his government's policy on Tuesday morning in a series of morning television interviews. He told ITV's Daybreak: "We have to ask the question 'Is it right to pay child benefit to top-rate taxpayers when we have such big debts and such a big deficit and when we obviously want to protect the poorest families?' It is a difficult decision. I think it is the right decision and I think people will understand that, if we have to make hard choices, those with the broadest backs - the better-off in society - do have to make the greatest contribution." - Daily Telegraph

Oliver Letwin: The welfare reforms send a signal about what fairness means - The Guardian

George Osborne's child benefit plans make things awkward for Labour - Allegra Stratton in The Guardian

> Yesterday's coverage on ConHome:

Oliver Letwin: The Coalition has allowed us to be more radical

LETWIN"The creation of a power-sharing government has enabled Tory ministers to pursue a more radical agenda than they might have managed on their own, the man who helped negotiate the deal said yesterday. Oliver Letwin told The Independent fringe meeting that the coalition was operating like a "dream" and that its ministers were intent on having as revolutionary an impact on public life as Baroness Thatcher achieved in the 1980s. Mr Letwin, a Cabinet Office minister, said there were "incredible strengths" in the partnership." - The Independent

Victims of anti-social behaviour can name and shame police who don't help them, says Theresa May

"Home Secretary Theresa May is ordering police to 'reclaim the streets' from louts they have allowed to run riot. Anyone who feels to have been repeatedly ignored by officers when complaining about loutish behaviour will be given new powers to demand action." - Daily Mail

Liam Fox "outflanks Treasury on defence budget"

"Defence is likely to emerge with one of the most favourable budget settlements in Whitehall after the Treasury softened its demands for cuts in response to Liam Fox’s concerns over the potential damage to the armed forces. Mr Fox will on Tuesday attempt to corral defence chiefs into a united position on the strategic defence review amid growing confidence in the department that he is making headway against the Treasury." - FT (£)

"The Defence Secretary is said to be “gaining ground” in his negotiations with George Osborne, the Chancellor, over the defence budget. Dr Fox’s position has been bolstered by growing support from senior military commanders, and public pledges from David Cameron to ensure the Armed Forces are properly funded." - Daily Telegraph

Philip Hammond gives high-speed rail line green light - FT (£)

David Cameron boosts Scottish Tories with election pledge

Scottish Conservative logo"David Cameron has committed himself to campaigning in the Holyrood election next year. In a huge boost for Scottish Tory morale following their failure to add to their single Westminster seat in May, the Prime Minister said he was keen to take on Alex Salmond's SNP. At a Scottish reception at the party's conference in Birmingham, he admitted that "there is still much to do in Scotland" but added that he felt the party could succeed." - The Scotsman

Cameron challenges SNP to call independence referendum - BBC

New MP Matthew Hancock apologises for Equality Act

"Matthew Hancock, a former adviser to George Osborne, says legislation devised by Harriet Harman will cause government 'an awful lot of problems'... Speaking at the British Chambers of Commerce (BCC) debate in Birmingham, Hancock said: "I apologise that Harriet Harman got her equalities law through ... this government is going to have an awful lot of problems. I hope we're in government for a long time in order to do that – these are things we are going to have to move on to in the future." - The Guardian

Nick Boles urges migrants to shell out £5,000 to use public services before they are given visas

Nick Boles"Immigrants should pay a bond of £5,000 to cover the costs of using public services, a key ally of David Cameron suggests. Tory MP Nick Boles – a friend and former aide of the Prime Minister – has urged the Government to impose a ‘surety’ on migrants before granting them visas. This would be returned only if they paid several times more in tax than the value of their deposit." - Daily Mail

Tory MP reportedly describes the Big Society as "incomprehensible"

"David Cameron's flagship policy, the Big Society, was reportedly described as “incomprehensible” by a Conservative MP... Jo Johnson, the brother of London’s mayor Boris, told a fringe meeting that the idea was “intangible and completely incomprehensible. A very odd and unpersuasive theme”. The MP later sought to clarify his comments, saying: “I said it’s a good idea to make communities more responsible for themselves, but it needs to be made more tangible and comprehensible to people.” - Daily Telegraph

Labour MP calls for Cameron statement over new tabloid phone-hacking claims - The Independent

Online child protection chief Jim Gamble resigns - BBC

Posted by Britannia Radio at 19:11