Dear Mr Cameron
I would like to talk to you about my Child Benefit (as I still like to call it, though of course, in the very near future, it will be nothing of the kind).
You may have perspicaciously (ask Boris) guessed at some motive of self interest. You’d be quite right. From next year, our household income will decrease by £188 a month, which means that for every pound my husband earns above the threshold for higher-rate income tax, he’s taxed at approximately 70% (forgive me the lack of precision; maths really isn’t my thing. Perhaps it isn’t yours, either?)
My husband, yes. You see, I’m that should-be Tory poster-girl: the career woman who put it all on hold in order to focus on raising children and running a home while her other half does his bit supporting The Economy. Unfortunately, despite the suburban-box-home, law-abiding, high-achieving gloss, I never really was a Tory poster girl. I’m afraid to say that I doubt I ever will be. I never quibbled about paying higher-rate tax (even when I did); never resented that we were ineligible for the various credits aimed at supporting working families, because we were ok without them and I saw how much they helped those who weren’t. But this? This has me tearing off my apron, and ransacking Boden for barricades.
You will tell me that times are hard, and choices have to be made. I’ll assume that you know best, and that cutting the top rate of tax for earnings over £150k but pulling benefits from disabled people really is in all of our interests. Perhaps universal Child Benefit has to go too, and the days of means testing are here. In which case, may I make the radical suggestion that you…test means?
It’s not a fashionable cause célèbre, I know. No household with a higher-rate taxpayer is likely to be actively struggling to feed and adequately house their children. Nor, however, I would argue, is their neighbouring household, earning almost twice as much (and with two personal allowances to boot). Nor those downsizers, who live mortgage-free, with savings, but who have compromised on monthly income accordingly. Nor, indeed, those fortunate enough to have partners, families or careers flexible enough to accommodate different working patterns.
Surely “Child Benefit” should be paid according to the needs of a particular child, not according to one crude and simplistic marker? Perhaps you are actively discouraging parents who stay at home, or, to give you the benefit of the doubt, actively encouraging two-income families? Perhaps it’s a clever move to stop wage inflation – after all, who would accept promotion and payrises, only to find that the additional responsibility and workload rewards them with exactly the same take-home pay as those earning £20k less? In which case, I’m sure one of those clever people with whom you surround yourself could think of a better name for it than the misnomer “Child Benefit”.
Thank you for your time, Mr Cameron. I doubt you’ll listen, but it’s good to talk. Do you know, it’s not even the money we stand to lose which has made me so cross. It’s the reinforcement of the fact that you either don’t understand the effect of your policies, or that you don’t care. That makes me angry and frightened for those much more vulnerable than I am.
Head in Book
Postscript – 23 October
A couple of further thoughts, Mr Cameron.
We’re waiting for the letter which will, I understand, ask me to disclose my husband’s name and earnings. Luckily for me, I know what he earns, and there are none of those nasty fluctuating commissions or bonuses to worry about.
I understand the letter will suggest that I spare everyone the trouble and stop claiming. I hope, but somehow doubt, that it will point out that I will lose my NIC contributions if I do so. I will, regretfully, decline this kind offer.
So my husband, in addition to his increased higher-rate tax, will be taxed back at the exact rate of Child Benefit paid. Plus interest, if there’s a time delay? Who knows. Since we’re being taxed as a family now, I wonder if that means I can enjoy his tax advantages in terms of pension contributions or gift aid donations? No, silly me.
It’s all supposition, of course, because we still don’t know quite how it will work when it kicks in. In two months.
Not impressed, Mr Cameron. The scant consolation is that I imagine it’s causing you just as many headaches as it is us.