The government have begun the long-awaited process of means-testing Child Benefit.
But it’s not quite so straightforward.
For starters, many rich families never claim their Child Benefit entitlement anyway. So the state isn’t supporting them.
Then there’s the rather embarrassing ‘loophole’ in the government proposal – which intends to stop any family with a single wage earner of £50,000+ from claiming Child Benefit, but doesn’t stop families with – for example – two wage earners of £49,999 from claiming; so it isn’t necessarily preventing the very wealthiest from claiming.
That isn’t real problem with these proposals however.
This week the government is sending out one million letters to households explaining that they may lose their Child Benefit. How much is this going to cost us?
Well the cost of the letters could reach £500,000 in postage alone at second class rates (and even bulk mailing discounts will only reduce that so far – even if cuts the cost to £250,000 that’s a quarter of a million we aren’t saving due to these proposals). Then we need to pay the wages of the staff who type and mail the letters in the first place, and who administer the responses. How much do 2 million envelopes cost? 1 million typed letters and 1 million forms? And that’s just the initial extra stationery cost.
Even more costly, we now need to pay the expense of actually means-testing these parents – paying the wages of civil servants who will assess each individual claim, and the wages of those who will respond to the inevitable mistakes, appeals and changes of circumstance that come with a means-testing programme.
You see, Child Benefit at the moment is incredibly simple to administer - everyone gets it. As soon as we begin means-testing, we need to bring in more staff, send out more letters and massively increase the cost of execution.
So how much will this measure actually save, being as it affects a mere 15% of the population?
Enough to justify the increased civil service costs? Enough to justify the loss of efficiency (and subsequent rise in costs as complaints, appeals etc. increase) in the rest of HMRC as civil servants are transferred to work on Child Benefit delivery?
Almost certainly not.
So why do it?
Because it opens the door to further Child Benefit cuts.
As soon as Child Benefit ceases to be universal, the government can discuss cutting it further – as they have already begun to do, suggesting that families with more than two children are somehow feckless and wilful (when in fact they are the only families in the UK selfless enough to help grow our population!).