The Spending Review, Child Benefit and women’s independent incomes
The Spending Review confirms the decision to remove Child Benefit from families with a higher rate taxpayer. This is the biggest single welfare cut, coming to £2.5 billion of the £7 billion total by 2015 – over a third. This change either means that we will have a bizarre tax on children or a reduction in women’s independent incomes
It’s a sign of how little detail there is in the documents produced by the Treasury that we still don’t have information as basic as whether this will mean that an amount equivalent to CB will be added to the income tax paid by higher rate tax payers. This would have the merit of not increasing the costs of administering Child Benefit but would look very perverse – an extra tax paid because you have children!
On the other hand, if the government plans the more obvious alternative of stopping the family’s Child Benefit this will translate into a cut in women’s independent in comes, as CB is normally paid to the mother in two parent families.
The equality impact assessment points to the fact that we do not know the distribution of incomes in families and goes on to claim that “it is therefore difficult to assess the impact on gender equality.” OK, we can’t assess it precisely, but it’s almost certainly going to make things worse. What we do know about the incomes of couples on benefits is that they are often not distributed equally and that mothers are more likely to lose out than fathers. It is naive to imagine that better-off couples always avoid this injustice.
I suppose we should be grateful for the fact that, unlike the June Budget, there is actually an equality impact assessment this time. But we mustn’t miss the fact that it looks as though this major reform will undermine women’s independence.