The Chancellor’s announcement this morning that child benefit will be cut for high earners is excellent news, for more reasons than one. It is obviously high time that government welfare payments be cut and in times like this it is quite reasonable that the first cuts be made to those payments that do the least good in terms of providing a safety net. Cutting child benefit for the rich may create a little discomfort for them, but far less than cutting benefit for the poor and unemployed. Though I question the need for child benefit at all, it is right that the first welfare cuts be made to the lowest-hanging fruit.
Moreover, cutting a universal benefit like child benefit means that the Chancellor has decided to be brave and think about the long-term political consequences of his actions. Many Conservative canvassers during the last election were bewildered by the refusal of high-income earners to vote for their party because they would lose some of these universal benefits, despite the fact that their net tax-benefit burden would be lower. This is a consequence of a universal benefit system where the costs – taxation – are dispersed and relatively unseen and the gains – child benefit in this case – are concentrated and visible. All people on benefits will be reluctant to vote them away even if it will mean a net gain for them, and it takes political courage to break this vicious cycle.
I'm also heartened that these cuts are being made despite the fact that they will directly affect the journalists reporting on them, many of whom earn enough to be left out of the new income threshold. The fact that the government is prepared to face these vested interests head-on is encouraging.
Of course the cuts in benefit need to be deepened and widened. Policy Exchange’s Neil O’Brien says that of the people on the winter fuel allowance, 82% are not in ‘fuel poverty’. There are countless other benefits which were designed to make more people feel dependent on the government to win their votes. We can no longer afford these benefits, and I’m glad to see courage from the government in cutting them.
