Published:

83 comments

Family shield

The Daily Telegraph splashes today on the headline “Osborne gets mothers back to work” – though the story beneath it is a little more equivocal than this suggests.  The paper reports that the Chancellor “wants to see nearly 500,000 more women in the workplace by the beginning of 2016, which would allow the UK to match the female employment rate in Germany”.  He is apparently considering announcing the creation of a further 50,000 childcare places in this year’s Autumn Statement.  Such a measure would “incentivise as many women as possible to remain in the labour market,” as the Treasury plainly puts it.  Osborne says that the Government will “support women who want to work”.

It follows that the Chancellor must believe that raising and nurturing your children at home is not work, which will come as news to many of the mothers and fathers who do it.  They are right.  It is true that the toil involved is all bound up with love and duty.  But this doesn’t make it any the less.

Osborne’s words also suggest that the Government won’t support women who do not want to work – and this indeed is the direction of travel that the Treasury is taking.  There are three main elements to its policy.  First, the child benefit restriction.  Second, the new childcare tax breaks.  And, third, the transferable tax allowance. Parents that receive child benefit get it whether they are working in the labour market or not.  The childcare tax break, by nature and by contrast, is available only to parents who work in the labour market. Child benefit has been removed from families that have one earner above the higher rate threshold, though the withdrawal takes place in a more gradual way than was originally planned.  Osborne also plans to freeze it in 2016 for two years if David Cameron is returned to Downing Street.

It can be argued that the child benefit curb was necessary as part of the deficit reduction drive – which is why ConservativeHome supported it, despite its anomalies.  (Families with a single earner above the threshold are hit, while those with two earners just below are not – even if their earnings are the same.)  But what is good for the child benefit goose should also be good for the childcare tax break gander: it should not be available if the earnings in question are above the higher rate.  However, the cut-off point comes at £150,000.  The new transferable allowance doesn’t make up for the difference – and couldn’t in any event for families in which the parents aren’t married.  The Chancellor has loaded the dice against single-earner couples.

Why?  It makes sense to use the tax system to encourage marriage – since the life chances of children are better if their parents stay together, and marriage increases the chances of this happening.  No wonder many other European countries have child tax allowances based on marriage.

But whether mothers or fathers want to stay at home to look after their children or wish to work in the labour market instead is none of the state’s business, as long as they are not claiming welfare benefits (and child benefit isn’t one of them: it’s a transferred tax allowance).  Osborne is in many respects an effective strategist and a successful Chancellor – though he has certainly not succeeded in eliminating the structural deficit and, worryingly, public borrowing has recently risen.  But he has little feeling for single earner families, many of whom are natural Conservative supporters.  Or were: there are fewer now, given the rise of UKIP.  The bias in his family policy is a gift to Nigel Farage.

83 comments for: The bias in Osborne’s family policy is a gift to Farage

Leave a Reply

You must be logged in to post a comment.