The article also misses the point that the proposed measure is plainly political, in that it is designed to raise moans from middle earners that are supposed to be music to the ears of the proles. Stupid - in that the sort of person who votes for the Labour party is, by definition, politically tone deaf - but political nonetheless.
The problem is that the actual reform outlined yesterday is unfair. Imagine your neighbour and his partner are making £43,000 each (a family total of £86,000) and have one child. They will keep their benefit, worth £1,000. Imagine that you are on £43,876, with a stay at home partner who doesn’t work and two children. You will lose your child benefits, worth £1,750. How is that just?About as just as comparing two hypothetical families with such precisely calibrated earnings, in which the family suffering this injustice has two and the other only one child.
Employers and employees will rapidly adjust to the new rule, and any raise that takes the employee into the hurt zone will be deferred until it can be substantial enough to compensate for the loss of child benefit. Depend on it, the state sector pay escalator will also be adjusted accordingly.
All that will happen is that nobody with children will receive a salary within the band £43,875-£46,850.
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There are many companies, in retail for example, who have a system of giving certain percentages of pay rises to their whole workforce, or whole levels of their workforce. These arbitrary hikes in pay could put a manager in this bracket without any discussion taking place.
ReplyDeleteIf they are using single income, instead of household income, as the cut off then they are being weird. It doesn't make sense at all, unless they are telling stay at home mums to get a lowish-paying job. If so then they should give tax relief on childcare.
It's a tangled web, arising from a well-meant attempt to make sure child benefit got through to the mothers. I suggest that companies will review their pay rise policies in the light of the changed regulation. And yes, it is hypocritical as well as fiscally perverse for a party that claims to want to strengthen families to increase the marriage penalty.
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