Social Liberal Forum responds to proposed Child Benefit reforms – Position Statement and Guardian letter

Following Chancellor George Osborne MP’s announcements regarding child benefit, the Social Liberal Forum has released the following Position Statement:

“The Chancellor’s announcement of the end to the universal payment of child benefit will have both welcome and regrettable consequences. The recent Liberal Democrat conference voted overwhelmingly to support a Social Liberal Forum policy motion that called for the Coalition government to ‘Ensure that any cuts to welfare benefits are progressive in nature: reducing benefits enjoyed by the most affluent before cutting benefits for the poorest and most vulnerable.’

There is little doubt that those earning higher incomes should bear the greatest burden of any cuts to benefits, protecting those who rely on the payments the most. There is real concern, however, that the breach of the principle of universality of child benefit could erode the public’s trust in the welfare state. In addition the government’s clumsy approach creates inequities due to the individual nature of taxation, as the government’s own analysis indicates the single-parent (or single-earner) families earning just over the 40% tax threshold would lose their entire child benefit payment, leaving two-parent families earning up to £86,000 with theirs intact.

Coupled with progressive taxation, child benefit should remain universal to ensure the inclusive nature of the welfare state is protected even as the overall cost to government is reduced.”

The Social Liberal Forum Motion also called on government to ‘safeguard universal child benefit in conjunction with progressive taxation in order to provide a reliable source of income protection throughout childhood.’ We therefore call for the evaluation of proposals such as those put forward by the Institute for Public Policy Research, whose figures demonstrate that if subjected to progressive taxation child benefit can be kept universal, with those who need the payments the least forgoing some of their allowance and lower earners retaining theirs. Such an option avoids the unacceptable means testing of child benefit, whilst ensuring that payment is directed towards those who need it most.

The Guardian has also published the following letter from Chair of the Social Liberal Forum, David Hall-Matthews:

The virulent media reaction to the proposed reforms to child benefitshows how hard it will be for Liberal Democrats to persuade the Tories to target cuts towards the rich rather than the poor. Defending the rights of households earning over £44,000 a year does Labour little credit. The deficit has to be reduced as fairly as possible.

But the fuss also shows why it is a bad idea to end universal benefits except as a temporary measure. As long as those on “middle” incomes are there to defend child benefit, it will remain an important form of welfare support. If they are cut out, who will stop it being eroded to nothing, via disgraceful rhetoric against the “undeserving” poor? Lib Dems overwhelmingly voted at our conference for universal benefits, paid for by progressive taxation. Those just above the threshold would lose out less and, crucially, the public’s support for a universal welfare state would not be diminished. Such an option would also avoid the miseries and inefficiencies of means-testing, while ensuring that payment is directed towards those who need it most. As soon as the deficit is under control, we must push for the rapid restoration of the universal principle.

Dr David Hall-Matthews

Chair, Social Liberal Forum

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2 comments on “Social Liberal Forum responds to proposed Child Benefit reforms – Position Statement and Guardian letter
  1. Asha Buch says:

    Surely there are other ways to tax the high earners.

    To increase the tax related earnings for the government, why not to introduce 50% tax for the maximum earners?

    If the government is set to reform the child benefit, they will have to consider the family income, not the individual income. This idea of individual income based benefit does not support their moto of ‘Big society’ or promote their plea for sustaining family ties.

    Is this government destined to backtrack like the tory did on the poll tax? This proposal through evaluation and quick.

    Asha Buch

  2. Will Richardson says:

    Brown was also very keen on means testing such as pension and ‘working’ family tax ‘credits’.

    Frankly this is all tinkering round the edges, far better to go further than Norway and give every un/der-employed person a Job Guarantee at a Minimum Living Wage, rather than ‘welfare’, this would ‘cost’ around 2% of GNP yet save an awful lot of the costs of welfare/mass unemployment.

    Check out…

    http://bilbo.economicoutlook.net/blog/

    http://moslereconomics.com/mandatory-readings/

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