Larry Elliott has an article in the Guardian today with this heading:
As Larry says:
The first real test of Labour's hardline approach to public spending has surfaced within a week of the party taking office – and it is a big one.
The issue is child poverty and in particular the two-child benefit limit introduced by the Conservatives in April 2017. This prevents households from claiming universal credit or child tax credit for a third or any subsequent child born after this date.
For good reason, the two-child limit is loathed by many Labour MPs because while having no impact on the number of children families have, it has had the predictable result of increasing poverty.
There is no doubt that many Labour MPs hate this cap and think their leadership is wrong for supporting it. And as Larry also noted, having recorded that the cap would supposedly cost £1.7 billion to remove, it is wholly unnecessary:
Finally, £1.7bn is a tiny sum in the context of a £2.7tn economy, and there are plenty of ways the chancellor, Rachel Reeves, could find it without any difficulty. As the tax expert Richard Murphy has shown, taxing capital gains at the same rate as income would net the Treasury £12bn a year, while restricting tax relief on pensions to the basic rate of income tax would raise a further £14.5bn. Removing the losses the Bank of England makes on its gilt holdings from the way the government's debt rule is calculated would raise an estimated £20bn, according to the consultancy Oxford Economics.
As a result I Tweeted this:
No doubt I will lose more followers on Twitter as a result, and if those leaving object to me telling the truth, I really do not care.
Labour is choosing to impose child poverty in the UK. And that is utterly unforgivable when the ways of relieving it are so readily available.
I called the Tories charlatans for favouring the wealthy in society at cost to those least well off. I will do the same now Labour is intent on reprising their performance. They are as objectionable, and maybe more so, for pretending that they are part of a Labour party and therefore care as a result when they do nothing of the sort.
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Good to see that your Wealth report is becoming the “Standard Reference” when looking at raising tax revenue.
Why Labour is doing this is quite beyond me. Really, I just do not understand.
We agree on this one. Thank you.
Much to agree with. But.
https://www.theguardian.com/commentisfree/article/2024/jul/15/labour-landslide-depressing-disfranchisement-politics-election-result-voter-turnout
The poor did not vote for Labour, the “doing Ok” did. Why would you as LINO change policy for those that did not vote/did not vote for you?
Obvs, this is Mandelson reasoning (ref: they have no alternative).
The UK has a tendency to follow US trends. Which suggests that the disenfranchised are now open to a Trump-style person.
40 years of neo-libtardism has changed sections of the UK populace – not quite into “hard-mean Thatcher mini-me’s” but certainly in the direction of – “stuff-you I’m alright jack”.
Which in turn drives the political calculation of Starmer et al. None of it is a pretty sight, all of it smacks of a total and complete lack of empathy – there go I but for luck/the grace of God.
Much to agree with
Have you read much on the way relative income inequality is measured? The increasingly low response rate has to make you doubt it’s usefulness. The age specific height of school children is consistently measured to a high accuracy and shows UK kids heights are still increasing, albeit at a slower rate than other countries
Total nonsense.
The height of children in the UK is falling. Don’t talk crap.
From the Guardian:
“In 1985, British boys and girls ranked 69 out of 200 countries for average height aged five. At the time they were on average 111.4cm and 111cm tall respectively.
But by 2019, British boys were 102nd and girls 96th, with the average five-year-old boy measuring 112.5cm and the average girl, 111.7cm.”
So, it seems true that British children are taller than they were, but only just, and at a much much slower rate.
https://www.theguardian.com/business/2023/jun/21/children-raised-under-uk-austerity-shorter-than-european-peers-study
But you are ignoring the evidence that they are now declining. https://www.theguardian.com/society/article/2024/jun/19/uk-children-shorter-fatter-and-sicker-amid-poor-diet-and-poverty-report-finds
This is absurd
I have no experience of the subtleties economics but what you and Larry Elliot write rings true to me. However, could your criticism be aimed at the wrong target? Might the power of UK Newspaper owners have so terrified the likes of Blair and Balls, that they, in turn, have indoctrinated Starmer, Reeves and Streeting with their fear of displeasing such people?
Perhaps they have little understanding of your ‘Taxing Wealth Report 2024’ so might the immorality lie more with Rupert Murdoch and the other owners than with anyone else?
No
These people have been elected to office. They are accountable.
I am glad to see that you are challenging this cruel policy, I was a member of the Labour Party but I have resigned because of this and other issues. Please keep up the good work.
I will
Richard,
I agree
May I add however
Prior to 2013 there was a National Council Tax Benefit (CTB) scheme. In 2013 however the Conservative Government ended it and gave Local Authorities 90% of the money they had previously paid out in CTB to set up their own Council Tax Support (CTS) schemes. BUT they insisted that Pensioners, who claimed 50% of all CTB had to continue to receive the same amount of CTS as they did CTB in effect a 20% cut for ‘working age’ claimants.
Many households who would previously have not paid Council Tax thanks to CTB now get little or no help.
As a result Council Tax arrears are rising.
This has a serious impact both on those who owe money and on Local Authorities
The original intention was that Council Tax would be added into the Universal Credit allowance however this had obvious issues about practicality. Clearly if all Universal Credit claimants got a 100% Council Tax reduction through a National Council Tax Benefit scheme with something similar for the remaining Legacy Benefit claimants that would make a massive difference to both claimants and Local Authorities.
Sadly however it doesnt seem to be recognised as an issue possibly because its not a simple situation
Thanks
The SNP have opposed this policy since inception, even though the BBC in its usual mendacious way says the SNP is joining Labour in opposing it. (What else would you expect from a British Nationalist broadcaster).
As usual The National has the facts “ Figures published last week by the Department for Work and Pensions showed there were 1.6 million children living in households affected by the cap as of April this year, up from 1.5 million to April 2023.
Of these, 52% of children were in households with three children, 29% in households with four children, and 19% in households with five or more children.”
Flynn will introduce an amendment if scrapping the cap isn’t in the big Speech.
https://www.thenational.scot/news/24453201.bbc-called-wild-headline-snp-two-child-benefit-cap/
https://www.thenational.scot/news/24450937.labour-urged-ditch-shameful-two-child-cap-kings-speech/
Thanks
Apologies for repeating a point I made here recently about the child benefit cap, but it is a highly important point: If the Scottish Gov, with its tight constraints on spending and no means of creating money, can afford to pay child benefit to every qualifying family in Scotland, then UK Gov, whether Tory or Labour, with its massive economic flexibility, has no excuse for not doing likewise. The decision of the recent Tory Govs and the current Labour Gov to maintain the cap is therefore a reprehensible political decision to penalise families with more than 2 children. The more children they have, the tighter their financial contraints will be and all this is happening when we know that reproductive rates in the UK are already so low that a sizeable reduction of population is inevitable.
Agreed
National turnout for the 2024 general election was 57% but voter turnout in Islington North (Jeremy Corbyn’s constituency) was 67.5%. Is Corbyn in favour of keeping the cap? I think not!