SLASHING BENEFITS IS A BREEZE WHEN YOU DISREGARD THE DETAIL

First Published By: The Guardian   

WARNINGS OVER THE UNFAIRNESS OF CUTS TO CHILD BENEFIT AND OTHER PAYMENTS ARE SIMPLY BEING IGNORED BY THE GOVERNMENT

The government is wobbling over its child benefit cut, but problems with the detail were exposed from the off. David Cameron recently went on the record to acknowledge that his plans to snatch child benefit from higher-earners could create rough justice around the edges – edges he is keen to get smoothed. 

The first thought this stirs is the stark contrast between the prime minister's concern with top-rate taxpayers and the abject disregard for the millions of poorer households who will be hit by wider social security cuts.  

Last week the reversal of seven separate Lords government defeats over welfare were rammed through the Commons: closely-argued points that peers had made about protecting vulnerable people were simply swept away. But the coalition's prioritising of the comfortably-off is now well familiar. The second thought about the child benefit wobble, exposed last week by the Institute for Fiscal Studies, is more instructive. Namely, the breezy lack of concern with getting the detail right. As Robert Joyce – the institute's research economist – put it, the precise problems that are suddenly nagging at Cameron were apparent from the off.

The first – in Cameron's phrase – is "a cliff edge". A modest pay rise that just pushes a parent into the top bracket will leave them worse off, as they suddenly lose a payment worth £1,750 a year for a parent of two, or more for bigger families. Cameron's second concern is being unfair to families with one breadwinner. A parent on £45,000 with a stay-at-home partner loses everything, whereas a couple on £40,000 a piece – or £80,000 in combination – will keep the benefit.

The good news is that these snags are, in principle, soluble. The cliff edge could be smoothed by withdrawing benefit gradually as income rises. And there could be a switch from individual to joint family income assessment by merging child benefit into the tax credits. The bad news is that the policy becomes effective next year – and to get such modifications right, there needs to be time to think them through. The latter option, for instance, would represent a U-turn for a coalition that has been hacking away at tax credits; it would confuse broader welfare reforms if it were not melded properly with these.

Having worked in Whitehall, I feel sure officials would have spotted these problems and warned ministers before the policy was set. But even if the civil service failed on this occasion, the IFS flagged up both issues on the very day the policy was announced – and yet ministers initially paid no attention. These ignored problems, remember, affect families on decent wages, most of whom will vote. It seems a safe bet that problems with myriad other reforms affecting the marginalised will not be on the ministerial radar. Half-baked replacements for the social fund and for Council Tax benefit are only two examples of disasters waiting to happen.

The bigger fear, perhaps, concerns the software systems that are meant to start paying the universal credit from next year: glitches could sink the policy. Whispers about this abound in Whitehall but, so far, are only rumours. Certainly, the failure to think through a child benefit cut for the middle classes inspires no confidence about how policy will be implemented when it comes to the poor.

READ WHAT: ERIC PICKLES ‘SECRETARY OF STATE’ SAYS ABOUT OVER-CHARGED COUNCIL TAX. 

ARE YOU PAYING TOO MUCH COUNCIL TAX- CHECK HERE?