On Tuesday I held a debate on the Government’s Child Benefit reforms in Westminster Hall. This was a chance for MPs to evaluate the Coalition’s latest plans to take Child Benefit from some families.
In this year’s Budget the Government set out plans to introduce a ‘Higher Income Child Benefit Tax Charge’ (HICBTC) through which parents earning over £50,000 will pay back 1% of their child benefit for each £100 of income. When £60,000 or over a parent will pay back all of their benefit.
There are two main problems with these changes; they are both unfair and unworkable.
When Child Benefit was introduced in 1945 – then known as the Family Allowance – one of its main proponents said “Children are not simply a private luxury. They are an asset to the community”.
This was a central argument for making Child Benefit Universal. The Lib Dem-Tory decision to make it dependent upon income disregards the fact that all children our important regardless of their parents’ earnings.
What is more, these proposals unfairly penalise single parent families and those families in which one parent stays at home. This is because the charge does not take into account joint income. Two parents earning £49,999 each will keep all their Child Benefit whilst another earning £60,000 will receive none.
It was financial discrepancies such as these which led the Institute of Chartered Accountants in England and Wales (ICAEW) to label the reforms a ‘disaster waiting to happen’.
The reforms could mean that if for unforeseen reasons, a parent’s income rises during the year, perhaps because they have received a bonus, they will face a large bill at the end of the year for unreturned child benefit.
With so many families already feeling insecure about their long term finances it is wrong to introduce changes which may further compound their problems.
Throughout the debate No one on either side had a good word to say about these changes, except the Minister who despite our numerous concerns showed no signs of changing course.
However, no Liberal Democrats were there to defend this awful policy which is being driven through by their party despite opposition from the public and a number of Conservatives.
You can read the full debate here; http://www.publications.parliament.uk/pa/cm201213/cmhansrd/cm120522/halltext/120522h0001.htm#12052226000001
On Wednesday I met with the Woodland Trust. They are working on a project in Durham in association with the County Council to create at least eight new community woodlands over 350 acres which will be accessible to everyone and will provide a lasting legacy.
To do this the Woodland Trust need to raise £60,000 in Durham which will then be more than tripled by funding from the Forestry Commission and other sources.
This target seems very achievable given the huge amount of support we have seen for the project in the past. I hope to contact many of the people who have expressed an interest in this in a few weeks with further details.
Later that day I met with a representative of the British Beer and Pubs Association in my capacity as Shadow Communities and Local Government Minister to discuss the problems currently being faced by many local pubs.
In Durham over 1500 people are employed by pubs and breweries and the industry brings £33.1 million in added value to the local economy and £738.3 million to the North East as a whole.
When properly managed pubs can be a community asset. We do not want to see these pubs put on the line due to the way in which they are charged tax. I will be following up on this meeting by further looking into ways we can ensure that pubs, jobs and responsible drinkers are not bearing the brunt of new taxes.