A Strong Voice for Croydon Central - Gavin Barwell MP
Help me
Contact me

Proposed changes to Child Benefit
07/10/2010 07:51:00

I have received lots of emails and letters about the proposed changes to Child Benefit.

I should declare an interest at the outset - as a higher rate taxpayer whose wife has stopped work to look after our three children I am personally affected by this proposal.

Given the difficult decisions that the Government is going to have to take on other welfare payments in order to tackle the huge deficit Gordon Brown has left us with (at the moment, the Government is having to borrow £1 in every £4 it spends - that’s £155,000,000,000 of debt this year alone), I believe that in principle the Chancellor is right to say that the better off shouldn’t receive Child Benefit.

As always, however, the devil is in the detail. His proposal defines the better off as any household containing a higher rate taxpayer. There are two problems with this.

Firstly, people on incomes just over the higher rate threshold (£43,875 in 2010/11 assuming you are under the age of 65 and earn less than £100,000), particularly those living in London where living costs are higher, might be relatively better off but they are not rich. This is a consequence of Gordon Brown’s repeated decision not to increase the higher rate threshold in line with the rate of inflation, which led to more and more people becoming higher rate taxpayers.

Secondly and more importantly, this definition is not based on household income. This means that a family where both parents work but neither is a higher rate taxpayer would still get Child Benefit despite having a combined income of as much as £86,000 but a single parent on a salary of £44,000, or a family where one parent is on a salary of £44,000 but the other parent stays at home to look after the kids, wouldn’t. That can’t be fair.

David Cameron has rightly said that this proposal must be viewed alongside the Coalition Government’s other policies and has highlighted the proposed transferable tax allowance for married couples. This may indeed address the unfairness referred to above in relation to married couples but it won’t help cohabiting couples or single parents.

In summary then I support the proposals in principle but have real concerns about the detail, which I have already raised with the Prime Minister’s office. I will be forwarding examples of some of many letters and emails that I have received to him.

Finally, many of the people who have contacted me make the point that the Government should not be punishing hard working people but doing something about those who could work but choose to live off the hard work of others. I can assure them that the Government is doing that - see, for example, this week’s announcement that no family should receive more in benefits than the average weekly take home pay - but that on its own will not deal with the mess we have inherited. Everyone is going to have to pay a bit more and get a bit less but it must be done fairly.

Comment on this blog


Readers' Comments

On 10/10/2010 21:46:00 Paul Ogier wrote:
Re. para 6 Will you be proposing to the government that income tax should be based on "household income" (as per means tested welfare benefits) rather than individual income as part of the reform of the taxation system or just where there are married or civil parnership couples.



 More Blog Posts
Friday night's attack on a 17 year-old asylum seeker
  Read Story
Reflections on yesterday's attack
  Read Story
IVF services in Croydon
  Read Story
Government backs upgrade of London to Brighton railway and refuses to fund BML2 concept that would be bad news for Addiscombe in particular
  Read Story
Spot the difference
  Read Story
Second interim report on Croydon tram crash
  Read Story
Fixing our broken housing market.
  Read Story
Government provides £14m for refurbishment of Fairfield Halls and redevelopment of College Green.
  Read Story
Southern Rail latest update
  Read Story
How I will vote on the EU (Notification of Withdrawal) Bill
  Read Story

Full list of blog posts here

Gavin Barwell, House of Commons, SW1A 1AA, Tel  020 8660 0491      © Gavin Barwell  2017       Promoted by Ian Parker on behalf of Gavin Barwell, both at 36 Brighton Road, Purley, CR8 2LG