Taxing times for the coalition (contd...)

The £7bn of pension tax relief that Osborne won't cut.

Just in case there was any risk of the coalition row on tax policy cooling down for a day or two, along comes a new report today, Tax and the Coalition, to fan the flames.

We do, of course, need to bear in mind that in this choppy pre-party conference period, there is bound to be a rash of publications appealing to the party faithful and burnishing the author's credentials in their eyes. Nonetheless, Lord Newby -- author of the report -- is a well connected Liberal Democrat peer and tax-expert, known to be close to Vince Cable. His report pulls no punches. The 50p rate must be preserved until fiscal consolidation is achieved; the Laffer-curve economics of those on the right calling for its abolition is dismissed; and a raft of tax raising measures are proposed that would hit the seriously affluent including a mansion tax on properties over £2m (served up with a swipe against Eric Pickles), an increase in capital gains tax, a land value tax, and further anti-avoidance initiatives.

Most will view all this as yet another twist in the 50p tax-rate saga, but more interesting -- and ultimately more important -- is the proposal to abolish higher rate tax-relief for pension contributions. A massive £7bn is still spent on this staggeringly regressive policy (benefiting only the richest 12 per cent of tax payers).

The long-standing defence of higher rate tax-relief, such as it is, has been that it is needed to avoid a form of 'double taxation' - paying tax on the income from your pension at a higher rate than the relief received when contributions were first made. Newby gives this short shrift, arguing that it would only apply to a vanishingly small number of people (he estimates that someone would have to have a pension pot of over £1.35m before this would occur). Massive spending on higher rate tax-relief is a luxury for the affluent that shouldn't have been allowed to grow so much in the good times and certainly can't be afforded in the bad.

It's important to put the generosity of this £7bn into the context of our long term "pensions crisis" for those on low-to-middle incomes ("crisis" is horribly overused in today's politics, but not silly in this instance). A flow of reports have highlighted the extent to which British households are failing to save enough to guarantee an adequate income in retirement, and the ONS has pointed out that over a million people have stopped contributing to personal pensions over recent years. Two out of three of those on low-to-middle incomes are not contributing to their own pension. The combination of chronic under-saving and rapidly increasingly life expectancy, if left unchecked, will condemn a generation of pensioners to poverty in retirement.

There is a major program of private pension reform in the pipeline, not least automatic enrolment starting from 2012. But there is deep concern about the capacity of those on low-wages to actually make their contributions given the wider squeeze on household finances and current levels of indebtedness. And the scale of the incentives on offer to encourage them to do so will be relatively modest.

Today's report is a reminder that the 2010 Liberal Democrat manifesto committed to abolish higher rate pensions tax-relief, so that everyone would receive tax-relief at the basic rate. (Indeed some within the Labour negotiating team at the time of the coalition talks saw the Lib Dem proposal as a welcome opportunity to rebalance resources away from the most affluent). Since then, we've heard precious little from the coalition on this issue other than a (sensible) tweaking of the Labour government's belated commitment to restrict but not abolish tax-relief for the seriously rich: the policy is now to reduce the annual tax-deductible allowance from £255,000 to £50,000 and the lifetime allowance from £1.8m to the measly sum of £1.5m. Indeed, on this major element of public expenditure, the coalition appears almost uniquely reticent to make further savings (when it comes to tax-reliefs, small-staters often become big-spenders). Next time a minister says that, sadly, they have no alternative to cutting back this or that programme aimed at the disadvantaged, let's hope someone asks them why this £7bn is so untouchable.

So what might we glean about wider tax politics from today's report? First, it is a stark reminder of the precarious ideological balancing act that Clegg presides over within his party and in the coalition. Many on the Labour benches would happily agree with the great majority, if not all, of Newby's proposals. Rest assured, the same cannot be said of the Conservatives.

Second, it brings home how little thinking about long-term tax reform is coming out of Labour circles at the moment. The abolition of higher-rate tax relief should be just one element of this, and a rather obvious one, so it is surprising that Labour appears content to cede this territory to the Lib Dems. The savings on offer could be used for any number of good purposes -- not least in the short term, for a targeted tax-cut for low-to-middle income families; and in the longer term providing stronger incentives to encourage these households to save.

Third, the Lib Dem and (in-time) Labour leaderships are likely to view this £7bn as low-hanging fruit when they start to search for resources to pay for their next manifestos. So if the Conservatives think the abolition of higher-rate relief is a bridge too far, they risk starting the next election campaign with a black hole of £7bn relative to their rivals. This will, at some point, trouble them, so they will also have to think long and hard about whether they can themselves make further cuts before then.

Finally, it highlights the pivotal role that the policy of raising personal allowances has played in yoking together the coalition in support of a totemic tax-reform measure in the early part of the parliament. And it suggests how hard it will be for them to find a "phase 2" tax policy which provides the same political adhesive. Anyone who thinks that coalition relations on tax will be plain sailing once the issue of the 50p rate is finally resolved needs to think again.

Gavin Kelly is chief executive of the Resolution Foundation.

Gavin Kelly is a former adviser to Downing Street and the Treasury. He tweets @GavinJKelly1.

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Meet the hot, funny, carefree Cool Mums – the maternal version of the Cool Girl

As new film Bad Moms reveals, what the cool girl is to the diet-obsessed prom queen, the cool mum is to the PTA harpy.

I suppose we should all be thankful. Time was when “mum’s night off” came in the form of a KFC value bucket. Now, with the advent of films such as Bad Moms – “from the gratefully married writers of The Hangover” – it looks as though mums are finally getting permission to cut loose and party hard.

This revelation could not come a moment too soon. Fellow mums, you know all those stupid rules we’ve been following? The ones where we think “god, I must do this, or it will ruin my precious child’s life”? Turns out we can say “sod it” and get pissed instead. Jon Lucas and Scott Moore said so.

I saw the trailer for Bad Moms in the cinema with my sons, waiting for Ghostbusters to start. Much as I appreciate a female-led comedy, particularly one that suggests there is virtue in shirking one’s maternal responsibilities, I have to say there was something about it that instantly made me uneasy. It seems the media is still set on making the Mommy Wars happen, pitching what one male reviewer describes as “the condescending harpies that run the PTA” against the nice, sexy mummies who just want to have fun (while also happening to look like Mila Kunis). It’s a set up we’ve seen before and will no doubt see again, and while I’m happy some attention is being paid to the pressures modern mothers are under, I sense that another is being created: the pressure to be a cool mum.

When I say “cool mum” I’m thinking of a maternal version of the cool girl, so brilliantly described in Gillian Flynn’s Gone Girl:

“Being the Cool Girl means I am a hot, brilliant, funny woman who adores football, poker, dirty jokes, and burping, who plays video games, drinks cheap beer, loves threesomes and anal sex, and jams hot dogs and hamburgers into her mouth like she’s hosting the world’s biggest culinary gang bang while somehow maintaining a size 2, because Cool Girls are above all hot.”

The cool girl isn’t like all the others. She isn’t weighed down by the pressures of femininity. She isn’t bothered about the rules because she knows how stupid they are (or at least, how stupid men think they are). She does what she likes, or at least gives the impression of doing so. No one has to feel guilty around the cool girl. She puts all other women, those uptight little princesses, to shame.

What the cool girl is to the diet-obsessed prom queen, the cool mum is to the PTA harpy. The cool mum doesn’t bore everyone by banging on about organic food, sleeping habits or potty training. Neither hyper-controlling nor obsessively off-grid, she’s managed to combine reproducing with remaining a well-balanced person, with interests extending far beyond CBeebies and vaccination pros and cons. She laughs in the face of those anxious mummies ferrying their kids to and from a multitude of different clubs, in between making  cupcakes for the latest bake sale and sitting on the school board. The cool mum doesn’t give a damn about dirty clothes or additives. After all, isn’t the key to happy children a happy mum? Perfection is for narcissists.

It’s great spending time with the cool mum. She doesn’t make you feel guilty about all the unpaid drudgery about which other mothers complain. She’s not one to indulge in passive aggression, expecting gratitude for all those sacrifices that no one even asked her to make. She’s entertaining and funny. Instead of fretting about getting up in time to do the school run, she’ll stay up all night, drinking you under the table. Unlike the molly-coddled offspring of the helicopter mum or the stressed-out kids of the tiger mother, her children are perfectly content and well behaved, precisely because they’ve learned that the world doesn’t revolve around them. Mummy’s a person, too.

It’s amazing, isn’t it, just how well this works out. Just as the cool girl manages to meet all the standards for patriarchal fuckability without ever getting neurotic about diets, the cool mum raises healthy, happy children without ever appearing to be doing any actual motherwork. Because motherwork, like dieting, is dull. The only reason any woman would bother with either of them is out of some misplaced sense of having to compete with other women. But what women don’t realise – despite the best efforts of men such as the Bad Moms writers to educate us on this score – is that the kind of woman who openly obsesses over her children or her looks isn’t worth emulating. On the contrary, she’s a selfish bitch.

For what could be more selfish than revealing to the world that the performance of femininity doesn’t come for free? That our female bodies are not naturally hairless, odourless, fat-free playgrounds? That the love and devotion we give our children – the very care work that keeps them alive – is not something that just happens regardless of whether or not we’ve had to reimagine our entire selves to meet their needs? No one wants to know about the efforts women make to perform the roles which men have decided come naturally to us. It’s not that we’re not still expected to be perfect partners and mothers. It’s not as though someone else is on hand to pick up the slack if we go on strike. It’s just that we’re also required to pretend that our ideals of physical and maternal perfection are not imposed on us by our position in a social hierarchy. On the contrary, they’re meant to be things we’ve dreamed up amongst ourselves, wilfully, if only because each of us is a hyper-competitive, self-centred mean girl at heart.

Don’t get me wrong. It would be great if the biggest pressures mothers faced really did come from other mothers. Alas, this really isn’t true. Let’s look, for instance, at the situation in the US, where Bad Moms is set. I have to say, if I were living in a place where a woman could be locked up for drinking alcohol while pregnant, where she could be sentenced to decades behind bars for failing to prevent an abusive partner from harming her child, where she could be penalised in a custody case on account of being a working mother – if I were living there, I’d be more than a little paranoid about fucking up, too. It’s all very well to say “give yourself a break, it’s not as though the motherhood police are out to get you”. Actually, you might find that they are, especially if, unlike Kunis’s character in Bad Moms, you happen to be poor and/or a woman of colour.

Even when the stakes are not so high, there is another reason why mothers are stressed that has nothing to do with pressures of our own making. We are not in need of mindfulness, bubble baths nor even booze (although the latter would be gratefully received). We are stressed because we are raising children in a culture which strictly compartmentalises work, home and leisure. When one “infects” the other – when we miss work due to a child’s illness, or have to absent ourselves to express breastmilk at social gatherings, or end up bringing a toddler along to work events – this is seen as a failure on our part. We have taken on too much. Work is work and life is life, and the two should never meet.

No one ever says “the separation between these different spheres – indeed, the whole notion of work/life balance – is an arbitrary construct. It shouldn’t be down to mothers to maintain these boundaries on behalf of everyone else.” Throughout human history different cultures have combined work and childcare. Yet ours has decreed that when women do so they are foolishly trying to “have it all”, ignoring the fact that no one is offering mothers any other way of raising children while maintaining some degree of financial autonomy. These different spheres ought to be bleeding into one another.  If we are genuinely interested in destroying hierarchies by making boundaries more fluid, these are the kind of boundaries we should be looking at. The problem lies not with identities – good mother, bad mother, yummy mummy, MILF – but with the way in which we understand and carry out our day-to-day tasks.

But work is boring. Far easier to think that nice mothers are held back, not by actual exploitation, but by meanie alpha mummies making up arbitrary, pointless rules. And yes, I’d love to be a bad mummy, one who stands up and says no to all that. Wouldn’t we all? I’d be all for smashing the matriarchy, if that were the actual problem here, but it’s not.

It’s not that mummies aren’t allowing each other to get down and party. God knows, we need it. It’s just that it’s a lot less fun when you know the world will still be counting on you to clear up afterwards.  

Glosswitch is a feminist mother of three who works in publishing.