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Wednesday, 6 October 2010

Another one bites the dust

Another (urgent) meeting of the Community Councils' Joint Chairs - in late October. How urgent can that be? It's a foretaste of what's about to hit local authorities following the announcement of the Coalition's public spending cuts later this month.

We already know that the officials who serviced the community engagement programme are to be shifted to a new "Residents First" team in January, and the rumour is that the good ship "Community Engagement" is holed beneath the water and is sinking fast. We suspect that Community Council Joint Chairs will learn their fate at the meeting.

The lapping waters which presage a tsunami.

"There is no alternative". The Coalition haven't used that exact phrase: they daren't. Too many reverberations of the Thatcher era. However, they want us to trust them when they say the only way to cut the deficit is to cut public sector spending. This includes taking away Child Benefit from the better off.

Instinctively that feels right doesn't it? Much of the impact of the cuts will fall on the less well off so isn't it only right that the better off should bear some of the burden? This might redress to some degree the sense of injustice and unfairness that many feel about the Government's inability or unwillingness to squeeze the very rich - including those in the financial sector who are blamed for our present predicament.

Withdrawing Child Benefit from "the rich" was a bold move, signalling the Government's desire to share the pain around.

Well, not exactly. This pre-emptive strike appears to have massively back-fired. Ignore the fact that, during the election campaign, no was told that this would be Tory policy . Our Prime Minister, David the Con, has apologised for that omission: although to my mind I don't see why he bothered since we weren't told about other cuts at the time. No, this policy appears to be classic case of no one looking further than their noses.

If you're a working couple and you're both  earning a penny below the salary threshold £44k - you still get the Child Benefit. If one of you earns a penny over you don't. If only one of you works and is above the threshold and the other stays at home to raise the kids; the family would lose the benefit.

Bear in mind that this policy was trumpeted as being fair - the better off  sharing some of the burden. How is it fair when by its very nature in introduces other obvious unfairness?

I imagine many of those who are to be affected by this change will see it as the imposition of a stealth tax. The sort of thing Gordon Brown was a master of, and of which the Tories made great play. Or a pay cut? Which raises a number of intriguing pay negotiation strategies.

Take the public sector. When I was a civil servant my salary was around £45k a year. There are  were quite a lot of us bunched around that level, which is near the £44k level at which the Child Benefit axe would fall. If you had three kids and you earned £44,000.01p you could lose around £2,500 a year. Much as I honour and respect my old colleagues for their sense of public service and duty, I can't see many of them taking this prospective cut lying down.

They could play this in one of two ways. Negotiate a pay reduction so that those potentially affected creep under the curtain. Or the unions could submit a pay claim which left the worker no worse off after the withdrawal of Child Benefit. How embarrassing could that be for the Government!


In the private sector some cash strapped or unscrupulous businesses could enforce a pay cut, thinking why should we pay when the state will? A strange policy which could end up in the state providing additional profits to companies!

I'm sure there are many more unintended consequences to this "bold" and "fair" policy. It will be one of the pleasures over the next weeks and months to watch them surface and the Coalition squirm.


That said if the Government are forced to drop this - the £1 billion of  savings pencilled in  will probably have to found from elsewhere.No guessing what the target would be.  The less well organised, less powerful; the less well off!!

4 comments:

The Sagittarian said...

Our Govt also introduced tax cuts and then promptly increased the costs on GST (now at 15%, fule and food increases plus power - but thats ok cos we got tax cuts! Not. The 'rich' got a tax cut which would in effect add $400 a week to their already bulging pockets, while tax cuts at the coal face would see workers gaining maybe $20 at most....at the same time, all are being encouraged to squirrel away for old age and yet a majority of workers have barely enough to limp by on during the week as it is without trying to ferrit some away. Sometimes being shot with a ball of their own spit would be too good for these politicians!

Barry Coidan said...

Is that a New Zealand speciality "shot with a ball of their own spit"? It's brilliant. Look out for plagiarism on one of my posts shortly.

Good to know your politicians are from the same gene pool as ours even if they're 12,000 km distant.

thedailyg said...

It is odd for a right-wing government and their rich supporters to be having this argument about fairness. If you want to run a country in accordance with the value of fairness, shouldn't you be a socialist?

So much about society is arbitrary; this change in the system is objectionable, yes, but it is small potatoes. But I imagine that many journalists and their friends fall afoul of it...

I find the media's outrage about this to be mostly spurious. Jon Snow kept pestering this Tory, demanding that he admit that it's an 'end to universal welfare' - that's just a shocking phrase that conjures up something much worse than what's actually happened, which some wealthy people being arbitrarily diddled out of a holiday - NOT people being turned away from soup-kitchens. And I don't see how this represents 'a slippery slope' to that outcome either.

What's funny is that this is the government that's always wittering on about an end to bureaucracy, and here we see the price of trying to crudely simplify things - there's always going to be a trade-off, isn't there? If you have a power-based top-down controlled society, which is what the Tories are all about, then you throw away public servants and administrators at your peril. The nation is a contrived machine - it doesn't run itself.

The Sagittarian said...

Borrow away mate, thats the current system! :-)