According to Danny Alexander, the outgoing Chief Secretary of the Treasury, the Conservative plan to save £12bn on benefits might consist substantially of cuts to Child Benefit. He lists four:
- limiting Child Benefit to two children. I’ve reviewed this proposal before, actually more than once. It wouldn’t save very much and it would be unexpectedly complex – because it would lead to families have to revise claims for eligibile children as their families got older.
- removing it for 16-19 year olds. This could have worked in the past. Older families tend to be better off, and it would have been the least regressive of the proposals. Unfortunately, times have changed, and the school leaving age in England is going up to 18/19. So it won’t work any more.
- stopping the higher rate for the first child. The higher rate was introduced because families with one child, and families with young children, tend to be poorer. Changing this would be a further penalty for the poor.
- means-testing the benefit We already have one means-test; it’s done by the tax system. The call for means testing is a call for another awkward, clunky, intrusive process to get in the way.
Child Benefit, for those who’ve forgotten, was created by combining the Child Tax Allowance with the Family Allowance. Cutting Child Benefit is directly equivalent to increasing tax.
The Conservatives have denied that any of this is current policy. They’ve explained where about £2bn of cuts will be made, they still have to explain where about £10bn of their £12bn is going to come from, and every time a politican speaks to the media, they go back to the same first £2bn. The question remains – if it’s not about Child Benefit, what is it about?