An Open letter to George Obsborne, Chancellor of the Exchequer

EDIT: If you agree with the sentiments below, please sign this Government e-petition. Thanks!

Dear George,

I understand you’ve got a lot on your plate at the moment. Inflation is up, both the real inflation and the much lower one we use publicly so we don’t all run around like headless chickens in blind panic. People are unemployed, the DEFICIT is on everyones lips. You’ve even had some personal problems with crack whores in the press to keep you occupied in the spare moments you must occasionally get.

You did your big party conference speech yesterday and it must have seemed gratifying- lots of people have said it was the best speech you’ve ever given.

There was one issue that you didn’t address though that is giving consternation to many millions of people, and that’s the way you’re planning to organise the savings on child benefit. None of us parents have issue with the need to save money, given the state the ecomonies in, but a lot of us do have issues with the way you’re doing it.

Based on current tax thresholds and personal tax free allowances, a family where both parents work could theoretically have a joint income of £84,950 and still get their child benefit, while a family where there is only one wage earner could earn as little (relative to the other household) as £42,476 and get absolutely nothing.

Obviously this is an unfair way to deal with the proposed cuts, wouldn’t you agree? I have a suspiscion that the problem is in the creaking HMR&C IT systems. Can their database not match up earnings from the same postal address? Can it not calculate household income, rather than two individuals income? I’m no database whizz but I imagine anyone with a passing knowledge of SQL could run a query that shows income at a given address? It wouldn’t take much to weed out people living with parents etc from that would it?

Lets not deal with hypothetical extremes though, lets base it on some average earning figures. I understand that in 2011 the average individuals income in the UK was £22,800 a year. This means that, factoring in the annual allowance, an average two person household earning the average wage will have £35,456 net take home pay after tax and national insurance. This is based on a joint gross salary of £45,200 and an individual unadjusted personal allowance of £7,475 for each of the two parents.

A family with one wage earner, lets say earning £45,200, to put it in the 40% bracket and on parity with the other household, will take home £33,048. So the single working parent family are already two and a half thousand pounds worse off, due a combination of some tax at 40% and only one tax free personal allowance. That’s not the issue though, so lets not get sidetracked.

Tell me this Mr Osbourne, how is it equitable to allow the working couple who already have over £2,500 more cash in hand a year to claim child benefit to the tune of £1,055 for one child or £1,752 for two children, that a household with one working parent but the same gross income will not recieve under your plan?

The answer is obvious: it isn’t equitable. And I hope that you will revisit this with all due alacrity. Please feel free to drop me an email, there is a link on the right, and we can discuss how you can dig yourself out of this hole you’ve found yourself in.

I’ll tell you that the system needs to be means tested if doing so is affordable, and if that creates more cost than it saves, the proposals need to be scrapped until we have a HMR&C that is fit for purpose.

Kind regards,