Child Benefit – Osborne wants to keep it simple
A lot of pre-Budget kite-flying going on. Always a danger that you raise expectations with exercises like that and then find you can’t deliver on them.
On child benefit, the Treasury seems to be looking at a number of ways of ameliorating the child benefit removal for 40 per cent tax payers. All of them look pretty expensive. The plan is to have something ready to announce in the Budget on 21 March.
The IFS suggested a couple of solutions in their Green Budget, including integrating child benefit and the child tax credit but I understand the government is not drawn to a solution that would effectively mean abolishing child benefit and bringing in something different in its place. It doesn’t sound as though the IFS tapering idea is necessarily a route the government wants to go down either.
Elsewhere in the pre-Budget chats, the Lib Dems have surprised some by showing a willingness to discuss the possibility of dumping the 50p tax rate in return for some serious taxation of wealth. It’s not clear that is going anywhere. It looks like there will be a big clampdown on tax avoidance at the top end of the property market – perhaps with a new supertax rate of stamp duty for the most expensive houses. All this will be sold as an all-out assault on the massively distorting effects of the top-end London property market on homebuyers but looks like it will fall some way short of the sort of wealth tax that many Lib Dems would like to see.
This week’s cabinet will continue the unusual star chamber on economic growth that didn’t quite get finished last week. Eric Pickles was taken apart in what one minister described as an “acidic” interrogation. Caroline Spelman “jumped up like a meerkat” when the focus then turned on her (the PM, chancellor, DPM and chief secretary leading the questioning).
Who will they turn on in the sequel tomorrow morning?
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