It seems our beloved Chancellor is already starting to piss off some of his own side

[fedsron2us]

http://www.telegraph.co.uk/news/newstopics/politics/conservative/8042579/Stay-at-home-mothers-hit-by-child-benefit-cut.html

http://www.dailymail.co.uk/debate/article-1317754/I-George-Osbornes-cuts-attack-family-wrong.html?ito=feeds-newsxml


The proposed Child Benefit reforms are likely to seriously discomfort some people who might have been thought to be natural Tory voters

Many are particularly annoyed by the decision to terminate payments as soon as one parents income crosses the higher tax threshold

This leads to the following anomaly

Family 1. Two earners on £40,000 each, total income £80,000 still get child benefit.

Family 2. One earner on £45,000 family doesn't get child benefit.

While it is tempting not to have too much sympathy for relatively well paid voters who were dumb enough to believe Camerons lies on this subject it is worth remembering that this benefit is actually targetted at children not their parents. The net impact of Osbournes proposals will be to introduce a marginal tax rate of 100% on certain families. To give some idea of the scale of losses some people face a higher rate taxpayer with three children will lose no less than £2500 per annum. Add in the additional loss of Child Tax Credits which the Chancellor also abolished in his last Budget and these families may well be over £240 per month worse off.
In some parts of the UK where living costs are high the loss of such a sum may make it difficult for some families to meet their bills. This will act as a huge disincentive to people to work since it would probably be better for people to turn down promotion or overtime than to risk losing their benefit. Ironically this is just the sort of benefit trap that Ian Duncan Smith claims he wants to eliminate. It is not clear why Osbourne has gone for such s crude form of clawback since the existing Child Tax credit system already gives him the basic data to do a whole family assessment of means. Certainly his claims that it was too complex are simply untrue. He also appears to have ignored the more obvious and equitable solution of just taxing the benefits at the appropriate of 40-50% band of income tax.

Even more strange than the proposals was the Chancellor claim that these people were being paid their benefits from the taxes of the lower paid. Of course, the rather more prosaic reality is that their monies are essentially a rebate on the substantial amounts of tax they have already paid. It was really quite bizarre to hear this millionaire berating people who might normally vote Tory as spongers. One must assume that there is something else a foot here since this behaviour was simply gifting the votes of these people to Milliband. Presumably he wanted to go after his 'own' first to head off claims that he was just screwing the poor although the latter are doubtless going to be the main victims of his final cuts. The danger for the Tories is that alienating different sections of society might be less a chance for divide and conquer, and more a case of creating a potential serious groundswell of opposition across different sections of society