Is this the coalition's 10p tax moment?

Child benefit cuts come under attack from all sides.

It must count as some achievement to attract the simultaneous ire of the Daily Mail, the Daily Telegraph, the Institute for Fiscal Studies, the trade union movement and the Labour Party. That's the unusual position George Osborne finds himself in this morning as his raid on child benefit comes under attack.

It appears that the cabinet was given little, if any, advance warning of the move, with one minister describing it as "complete bombshell". The Mail and Telegraph both attack the measure as a blow against the family in their leaders this morning and the IFS warns of the perverse anti-work incentives that result from the move. The decision to abolish child benefit for all higher-rate taxpayers means that a one-earner couple with two children with a gross income of £43,876-£46,850 would be worse off than if their income were £43,875. A one-earner couple with an income of £43,875 would need a pay rise of at least £2,975 to ensure they were no worse off after paying tax and losing child benefit.

It's for reasons like this that, less than 24 hours after the measure was announced, the children's minister, Tim Loughton, has already floated the possibility of "compensating measures" for those who have lost out. Is this the coalition's 10p tax moment? It would be foolish to rule it out. The decision to simultaneously abolish tax credits for all those earning over £30,000 means that there will be howls of anguish from those set to lose thousands of pounds of benefits in a single stroke.

But far more significant is the fact that this marks the opening salvo in the coalition's war on the universal welfare state. The decision to make child benefit universal was never just about income, rather it was the means by which society collectively recognised and supported the decision of couples to start a family. Once the poison of means-testing is injected into the system, the principles on which the entire welfare state is built start to break down. And it is the poorest who will suffer the most from the abandonment of universality. As the great sociologist, Richard Titmuss phrased it: "services for the poor will always be poor services." Ed Miliband must live up to his campaign promises and resist the coalition all the way.

George Eaton is political editor of the New Statesman.

Grant Shapps on the campaign trail. Photo: Getty
Show Hide image

Grant Shapps resigns over Tory youth wing bullying scandal

The minister, formerly party chairman, has resigned over allegations of bullying and blackmail made against a Tory activist. 

Grant Shapps, who was a key figure in the Tory general election campaign, has resigned following allegations about a bullying scandal among Conservative activists.

Shapps was formerly party chairman, but was demoted to international development minister after May. His formal statement is expected shortly.

The resignation follows lurid claims about bullying and blackmail among Tory activists. One, Mark Clarke, has been accused of putting pressure on a fellow activist who complained about his behaviour to withdraw the allegation. The complainant, Elliot Johnson, later killed himself.

The junior Treasury minister Robert Halfon also revealed that he had an affair with a young activist after being warned that Clarke planned to blackmail him over the relationship. Former Tory chair Sayeedi Warsi says that she was targeted by Clarke on Twitter, where he tried to portray her as an anti-semite. 

Shapps appointed Mark Clarke to run RoadTrip 2015, where young Tory activists toured key marginals on a bus before the general election. 

Today, the Guardian published an emotional interview with the parents of 21-year-old Elliot Johnson, the activist who killed himself, in which they called for Shapps to consider his position. Ray Johnson also spoke to BBC's Newsnight:


The Johnson family claimed that Shapps and co-chair Andrew Feldman had failed to act on complaints made against Clarke. Feldman says he did not hear of the bullying claims until August. 

Asked about the case at a conference in Malta, David Cameron pointedly refused to offer Shapps his full backing, saying a statement would be released. “I think it is important that on the tragic case that took place that the coroner’s inquiry is allowed to proceed properly," he added. “I feel deeply for his parents, It is an appalling loss to suffer and that is why it is so important there is a proper coroner’s inquiry. In terms of what the Conservative party should do, there should be and there is a proper inquiry that asks all the questions as people come forward. That will take place. It is a tragic loss of a talented young life and it is not something any parent should go through and I feel for them deeply.” 

Mark Clarke denies any wrongdoing.

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.