A budget dress rehearsal

I can’t tell you how much I enjoy it when the Tories and the Lib Dems indulge in a little grandstanding before the budget.  It’s like watching Laurel and Hardy attempt a polka and if it was spontaneous, well, it really would be funny.

What is amusing is that they think such choreographed manoeuvres come across to the electorate as accidental.  Sorry, but we don’t zip up the back.

This time, it’s over the cutting of child benefit for higher rate taxpayers. The Chancellor has knitted his brows and pronounced himself to be worried about the impact on all those poor families with someone earning over £40,000 to be hit when it kicks in next year.  Poor wee lambs that they are.

Meanwhile, Nick Clegg puts on his best sonorous tones to suggest it is unfortunate but that he and his party are more concerned at raising folk out of paying tax altogether and speeding that along.

Ultimately, we’ll get a lot of huff and puff and very little movement when the Budget is announced, and a lot of handwringing afterwards.

Yes, it is unfortunate that the last great universal benefit is under attack.  And yes, it is a tad unfair that the threshold captures some just over the £40,000 limit but exempts two earner families on over £70,000.  But tax is like that:  wherever you put in a cut-off, it hits some and relieves others.  Until a wholesale shift is made to a progressive tax regime, there will always be such anomalies:  like that is about to happen anytime soon.

But on the whole?  No, I don’t feel sorry for anyone earning over £40,000 nor do I lie awake at night worrying how they will manage the school fees, ballet lessons and Waitrose shop without the additional income.

I’m too busy trying to work out how to manage my own loss of tax credits – and more pertinently, worrying that if it’s bothering me this much, what must it be doing to families a whole lot worse off than me.

Ed Balls, who is beginning to manage to carve out a credible shadow Chancellorship, acknowledged this in his response.  Terrible, he said that they are taking child benefit away from some families, but much worse that they are also hitting families on much lower incomes.  His estimate is that some families on £17,000 could be worse off by £3,000 per year.  It won’t pay them to work, he suggested.  And he’s probably right.

There is something nauseating about watching the rich kids in the Cabinet wring their hands over the impact of the loss of child benefit to better off and downright wealthy families while staying schtum on the matter of tax credit loss to families on much lower incomes.  And simultaneously pushing through reforms to benefits which will remove several thousand pounds a year from families with disabled children – families who need the income most, who because they have a disabled child, have much higher living costs than the rest of us.

Like I said, I enjoy it but only to a point, given that their actions have dire consequences for many.

This annual tea-dance confirms what those Tory sceptics north of the border have always believed.  Nasty party.  It also justifies the decision of many voters in Scotland last year to punish the Liberal Democrats for their compliance and complicity in the whole charade.  They can push and prod all they like for a faster phasing of the commencement point for paying tax but it is theatrical.  It’s their way of assauging their consciences.  But what is the point of raising the level at which people pay tax, if it is effectively taken back off them through other methods?  If the Lib Dems think this – admittedly welcome – measure is going to redeem them in the eyes of Scottish voters, they are sadly mistaken.  The parlance, I think, is dream on.

There will be more like this in the next two weeks.  More shuffling from foot to foot.  More seemingly chaotic rehearsals from the coalition partners, with legs and arms swinging in the opposite direction.  But on the day?  It will all go smoothly.  They will dance the perfect polka, showing synchronicity in every step.  The poor and lowly paid will bear the brunt;  the wealthy will largely escape fiscal censure.  It was always thus.

Expect low scores and boos from the majority but maximum scores and enthusiastic applause from their rich friends in the shires and in the city.




6 thoughts on “A budget dress rehearsal

  1. This might upset a few, but my wife and I earn less than £30k. We have two kids, a small car but a reasonable mortgage. I have no qualms about child benefit being restricted to those who really need it.

    I still earn considerably more than all but one member of my team at work. So I have an advantage over them.

    Yes, I understand that some people have different circumstances, but if you live in Scotland and are earning £40k+, then you are far better off than the majority of the population. Wait until you are out of work for 18 months due to illness, as happened to me – then you will understand what a true shortage of money is.

    Neither my wife or I smoke, drink very, very little and have no debt bar a mortgage, having been racked to the hilt 20 years ago with loans and credit cards. We learned the hard way.

    I’m not some born-again financial patronising evangelist. But when people who earn almost double what I get start complaining, I have little sympathy.

  2. Like the earlier comment I think you spoiled an otherwise good post with a cheap shot at the Waitrose , ballet fees stereo type, although of course it makes for better headlines to be controversial. The underlying principle of this universal benefit was to protect women and while I agree times have changed lumping everyone who earns more than £40K into the baddie pot is not constructive, as it is never quite as clear cut or simple as that. Progressive taxation is the way forward I agree as is social justice.

  3. I must object a little to the jokes about people earning over £40k. My father earns just over that as a teacher at the top of the chartered teacher scale. He cannot afford to pay full price for things at Tesco let alone even think about Waitrose. The last time his car packed in, I had to loan him money to afford a new one (And that was a five year old car when he bought it). Most of his money is spent on petrol (Which is becoming a crazily large part of the monthly bill) and the mortgage for his three bedroom house (Where you can barely swing a cat in the ‘third bedroom’). We hardly live in luxury at his place, and certainly no private schools or ballet lessons were forthcoming when I was younger.

    Now your tongue-in-cheek remarks do fit for people earning £70k plus…

    Other than that, I pretty much agree with your post. Some of the changes are insane, and while I do welcome the tax threshold going up, I still couldn’t afford to get my own place under the current tax regime. The sheer lack of affordable housing is the main issue along with lack of jobs. Unfortunately, the government seem more interested in hammering benefits and playing with the tax system than actually doing anything useful outside of making positive noises and hand wringing.

  4. Have to agree with Mac. This is just another instance of redundant trickle down economics. The well off get the glass. Everyone else gets the dreeps. I just hope that the LibBents have played themselves out of existence.

  5. My husband earns £40k/yr. I work a pt job. We shop at Lidl (not Waitrose, can’t even afford Sainsburys), dress in George from Asda, & won’t be able to afford to send our 14 month old son to private school when the time comes (& wouldn’t choose to). We have one second hand car that is 9 yrs old. We don’t receive tax credits, & my employer doesn’t participate in childcare voucher scheme, & we’ve used the maximum allowed via my husband’s employer. We just about break even every month, so without child benefit, we may end up overdrawn by £200/month. £40k doesn’t go as far as you think.

  6. Socialism for the rich, unbridled capitalism for the poor. Scotland gives all its revenues to London and gets Tory policies in return. The UK is not working for Scots.

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