One of the most intriguing questions about the decision to take child benefit away from households with a higher rate taxpayer in them is whether it marks the beginning of the end for universal benefits. The quotes today from Michael Fallon, the Tory vice-chairman, certainly suggest that it does.
Fallon ridicules Ed Miliband with the line:
Now, if you accept that the poor are currently being taxed to provide child benefits for the rich (a slight exaggeration given that higher rate taxpayers contribute far more than they take out in services) then this argument applies with equal force to all other universal benefits. Why should someone on £17,000 a year pay taxes to help cover the cost of Felicity Kendall’s pension or Judi Dench’s winter fuel payment?“He wants to tax the poor to give benefits to the better off.”
Labour understands this point and that Osborne has, as I say in the magazine this week, laid a trap for them: if they accept the child benefit cut they’ll be accepting a shift from a welfare state to a welfare safety net.
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