Wouldn't it be nice to earn £200,000 ish a year (excluding pension contributions of 40,000). That's how much Barnet Council CEO Nick Walkley earns. Now just suppose you did and like me, you have three children under 18. How much of your income after tax, do you think the Governments plan to abolish child benefit for top rate taxpayers will disappear. Now my maths isn't great, but I estimate that it's under 2%.
I have a friend who also has three children. He lost his wife a few years ago. He earns approx £47,000 - just over the threshold. He'd probably earn more, but trying to be a Dad with no partner has limited his ability to progress in his career. He spends approx £6,000 per annum on childcare related issues. In terms of his available income, this will drop by 10% as a result of the changes. Now unlike me, he's pretty prudent. All of the child benefit he's received he's invested in accounts for his children, so that when they get to University age, they won't need massive loans or be lumbered with Massive debts.
His eldest is 13, youngest is 5. When the child benefit stops, eldest will be transferring to Uni with a nice little nest egg. What about youngest?
He is faced with the ridiculous situation where his household would be better off if he asks his boss for a £2,200 pay cut for two years. After he's paid 40% tax on the top £2,000 he has £1200 left. He'd lose £1,200 in income, but get £2,500 in child benefit. What sort of an imbecile comes up with a scheme like that? Step forward George Osborne. His Tory sidekick Iain Duncan Smith says "no one will be worse off taking a job". The truth of the matter is that many people struggling to keep their heads above water, with huge mortgages and zero percent payrises for many years will suffer.
I'm all for sharing the pain, but it strikes me that cuts to services, cuts to child benefits and cuts housing benefits don't exactly share any pain with the Nick Walkleys of the world. Today we read that banks have allocated £7 billion for bonuses. You know, those banks that nearly bankrupted the country and landed us in this mess.
The trouble with millionaires like David Cameron, George Osborne and the like is this. Quite frankly, they don't give a damn. The trouble with the likes of Nick Walkley, the man entrusted with managing Barnet Council, is he's all right jack so he doesn't give a damn either. I heard one Tory delegate saying "It's difficult, but we all have to tighten our belts". Well you go out for dinner at any swanky restaurant in the City of London when those bonuses are dished out and you won't see too much tightening of belts there.
My solution. A one off windfall tax on all banks to the tune of £7 billion, the amount set aside for bonuses. That would pay off a nice chunk of the deficit. It would also teach them to take the piss. Tell them "This is your bit of belt tightening and sharing of pain". It is no less than they deserve. If they did that, they could cancel the child benefit changes tomorrow.