However, the reaction to the Chancellor's announcement yesterday that Child Benefit (£20.30 per week for the eldest child and £13.40 per week for each subsequent child) would be withdrawn from 2013 onwards for all families where one parent earns more than about £44,000 p.a. shows just how difficult the task actually is. On the face of it ceasing the payment of benefits to people who are earning enough in theory to not need it should be an easy sell -- but the outrage of the media proved otherwise, and of course the whole policy was not helped by the revelation that as the Revenue's tax computer's don't know who is married to who (or living together, etc) a single mother earning £45K would lose her child benefit, while a couple both earning £43K would still receive it.
The worrying thing is that this is just the first 'cut' to be clearly outlined. Many, many more will be announced at the Comprehensive Spending Review on the 20th October. If we as a country -- despite the direness of our financial situation -- cannot accept the removal of benefits for those earning in the top 20 percent of the population, what hope is there that we will accept the much more serious cuts?
As a percentage of GDP our public debt (not to mention private and corporate debt) is amongst the highest in the world; if we continue to put off paying it back we will be spending ever more in servicing the interest of that debt (currently £43bn per year, rising to £66bn by 2016) and over time it will impair our country's ability to deliver essential services and pay out even the most needed benefits. We already pay more on debt internest than we do on the Armed Forces -- at a time when our servicemen have been losing life and limb in Afghanistan because of lack of equipment. The sad fact is that the longer we put it off, the more likely that higher taxes and/or higher interest rates will result, which would present even more problems for our private businesses on which we need to rely for growth. Whichever way we look at it, the longer we leave it, the more painful and prolonged it will be.
UPDATE 19:45: The former Chief Secretary to the Treasury, who left the note saying "I'm afraid there is no money left", has now written an article attacking the coalition for cutting benefits for high earners. I would laugh if I wan't already crying so hard.
UPDATE 22:15: It looks like the Media might have badly misjudged the public's reaction to the move to end child benefit for higher earners:
A further 86 percent agree with the £500 a week limit on Benefit payments too. More here.