Is Osborne really about to give people on £100k a tax cut?

The coalition’s travails over child benefit mean Osborne may revisit his decision to raise the perso

As we close in on the Budget, most eyes are still fixed on the fate of the 50p tax rate. Ignore for a moment some of the squeals from Labour on this issue (more in excited anticipation that it will be axed than horror) and spare a thought for the dwindling band of true Tory modernisers. Their two central ambitions over recent years have been to demonstrate an unswerving commitment to the National Health Service, and to show that they could govern the economy – and tax policy in particular – in the interests of the broad majority rather than the affluent elite. They are struggling to believe that, having watched the coalition conspicuously squander the first of these strategic objectives, it could be planning to deliver the last rites to the second, too.

Yet whatever the decision on the 50p tax rate, the heated debate over it risks obscuring another more nuanced, but still highly revealing choice facing Goerge Osborne. Who should benefit from the widely expected and costly increase in personal tax allowances: the vast majority of all taxpayers, including individuals to over £100,000 a year (and indeed households on £200,000), or just basic-rate taxpayers? It's an important issue in its own right – and one that has been given fresh impetus by the coalition's travails over child benefit.

To understand why this is the case, turn the clock back to 2010 when the personal allowance was first increased and the decision taken to limit the gains to basic-rate taxpayers. This was achieved by lowering the income threshold at which the 40p rate starts in order to cancel out the gains for higher-rate taxpayers – leaving them no better or worse off. Creating more 40p tax-rate payers has obvious political downsides. However, it makes the personal allowances policy both less regressive and significantly less costly. The savings could be used to help reverse this year's cuts to tax credits.

One of the main reasons why there was such a hostile reaction from many quarters to the initial decision to target the gains from the personal allowance in 2010 was the disastrous way it got caught up with Osborne's proposal to abolish child benefit for households with a higher-rate taxpayer. It meant those basic-rate taxpayers who found themselves shunted into the 40p rate not only faced a higher marginal tax rate but were also set to lose £1,750 of child benefit if they had two children.

This was pure political poison. Consequently, when a further increase in the personal allowance was announced in 2011, a different approach was adopted and the gains went to higher-rate taxpayers, too.

Which brings us to next week's Budget and how the decision that is set to be made on revising the policy on child benefit could also affect the one on personal allowances.

To date, the coalition's argument on child benefit has been that, given the scale of the deficit, the state can no longer afford to pay it to households with someone earning above £42,500; indeed, it is also argued that it is morally unfair to ask low-income families to contribute towards higher earners' child benefit. In which case you might well ask why we can afford tax cuts for individuals earning £100,000 (and households with a joint income over £200,000), regardless of whether they have children. You might also ask why it is fair to ask the same low-income family to contribute towards the cost of these tax cuts for the affluent.

I don't know how the coalition proposes to answer this. But as things stand they'll need to do so next Wednesday. Pity the poor soul in the Treasury being tasked with drafting the "lines to take" for ministers.

There is, however, a potential get-out clause for them. The approach now being touted as the likely change to Osborne's child benefit policy is to means-test the benefit at a higher level of income – say, £50,000 rather than £42,500. Whatever other problems this creates (and there are many), it will make it possible to restrict gains from an increased personal allowance to basic-rate taxpayers without creating the toxic side effect of stripping child benefit from those who get tipped into the 40p tax band. The coalition could, if it so wished, show that its priority really is basic-rate taxpayers (and in doing so save money).

We'll know soon enough. My tentative hunch is that the government won't opt to restrict the gains from increased allowances to 20p tax-rate payers – even though it is clearly more progressive and cheaper. I doubt the Chancellor will be willing to incur the price of creating more 40p taxpayers. If this is the case, the coalition will have some explaining to do, not least to its own backbench rebels on child benefit, about why a family on £50,000 should lose cash support while individuals without kids earning double that amount should get a tax cut.

And all this, of course, is before we get to the decision on whether to abolish the 50p tax rate . . .

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

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Tail docking is described as “barbaric” – so why did the SNP vote to bring it back?

The decision by the SNP to permit the docking of puppies' tails seems bizarre - until you consider the party's divided loyalties.

As Holyrood votes go, it probably doesn't get more emotive than the decision to lift the ban on tail docking - a procedure carried out on three-day-old puppies which involves crushing cartilage, nerves and bone without anaesthetic, and which campaigners have called "barbaric".

The reasoning is that these "working" dogs, flushing out animals to be shot on Scotland's vast hunting estates, can injure their long tails. The British Veterinary Association disagrees, saying the procedure inflicts significant pain and deprives dogs of a "vital form of canine expression". 

So why has the Scottish National Party, with its left-wing rhethoric and substantial block of left-leaning newer members, voted through such a deeply controversial proposal?

One clue is to be found in 2014-15 - not the independence referendum, but the push for land reform which followed it. The extraordinary concentration of land ownership in Scotland - around 430 families or companies own half of the private land - became a touchstone issue for independence campaigners. After September 2014, many transferred their enthusiasm to this issue, demanding a new bill that would kickstart land reform after a decade in the long grass.

This presented a real problem for the SNP. In its longheld tactic of appealing to both left and right, rich and poor, the land issue showed up the cracks. While the new First Minister made rash promises of "radical" reform in November 2015, her cabinet nevertheless included Fergus Ewing, a centre-right politician with links to the landed estates and rural lobby. 
 
Pictures of Ewing clad in tweed alongside gamekeepers at a PR stunt caused some of the party's new membership a twinge of unease. Unedifying rows over fracking, which highlighted Ewing's relationship with the Duke of Buccleuch, did not help. While much was made of the SNP's 56 MPs opposing fox hunting at Westminster, Ewing opposed a Scottish ban more than a decade before
  
Before the SNP made its unprecedented break into the Labour strongholds of the west of Scotland and central belt, the party's support was concentrated in the largely rural east. Perthshire, Banff and Buchan, Moray are places where people voted Tory in the past - and indeed, turned blue once more this June. Not that such a swing can be said to have come entirely from SNP voters. Nevertheless, it does highlights another side of SNP membership that is often forgotten about. "It's said that there are two SNPs," said Professor Ailsa Henderson, professor of political science at the University of Edinburgh. "An SNP voter in Govan is perceived to have a very different profile than another in Perthshire". 
 
This project to appeal to all Scotland - particularly noticeable during Alex Salmond's leadership - produces strange paradoxes, and this tail docking issue is just the latest. The rural lobby is strong, from gamekeepers' associations to hunting proponents to the powerful Countryside Alliance. The current government's proposal to reintroduce the practice didn't come out of the blue. As Green MSP Mark Ruskell explains, the lobbying began with the SNP's victory at Holyrood in 2007. The previous Labour-led "rainbow" parliament, with its seven green MSPs and six socialists, had introduced the Animal Welfare (Scotland) Act, banning the practice of docking as well as fox hunting. 
 
"The gamekeepers were furious," Ruskell said, "And the first thing they did was to lobby the new Scottish government". Ten years later, their wish was granted. "The evidence was rejected by professional bodies, but they still went ahead. It's been spectacularly misjudged," added Ruskell. The power of lobby groups at Holyrood has repeatedly been raised as a concern by campaigners and parliamentarians alike, with last year's Lobbying Act cricitised as being far too weak to ensure real transparency. Pressure from gamekeepers and shooting groups, Ruskell said, influenced the whole way the evidence was put together. One report was simply a survey of self-selecting shooting estates, describing the frequency of tail injuries. 
 
For its part the Scottish government defended the move by pointing out that the rules will still be more restrictive than in other parts of the UK. Only a vet can make the decision to shorten tails - "no more than the end third" - and it will apply only to spaniels and hunt point retrievers. "We have seen enough evidence that some working dogs are suffering tail injuries to make the case for the law being changed", said a government spokesperson. "Scotland is a nation of animal lovers and we take the welfare of our pets, animals and livestock very seriously." 
 
Reaction from SNP members online has been fairly damning, with some talking of leaving the party - though others have defended the decision. The next big showdowns in Holyrood on animal welfare are likely to be just as emotive: the use of electric shock collars on dogs, and the prosecution of wildlife crime (or, how to deal with the fact that poisoned, bludgeoned birds of prey keep turning up on grouse shooting estates). The latter in particular will test, once again, the direction of a party split between appeasing a land management lobby, and meeting the high expectations of its newer members. 
 

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