The child benefit tax could be a disaster for the coalition

More than 300,000 households have not been informed that they must either stop claiming child benefit or pay a new tax.

2013 will be a year of dramatic changes to the welfare system: the introduction of the benefit cap, the abolition of Council Tax Benefit and, most notably, the national rollout of Universal Credit. But the first test for the government will come next Monday when the withdrawal of child benefit from higher earners begins. From 7 January, payments will be tapered away from individuals earning over £50,000 and completely withdrawn at £60,000 (however, a household with two earners each on £50,000 will keep the benefit in full). Those households affected will either need to stop claiming the benefit or pay a new tax (known as the High Income Child Benefit Tax Charge) to cover the cost of the payments. Families will lose £1,055.60 a year for a first child and a further £696.80 a year for each additional child, meaning that a family with three children stands to lose £2,449.20 - the equivalent of a £3,500 pay cut (since child benefit is untaxed)

With the changes announced as long ago as the 2010 Conservative conference, the government has had no shortage of time in which to inform those who will lose out. But as today's Telegraph reports, almost a third of the families affected have still not been formally warned that they will no longer be eligible for all or part of the benefit. Of the 1.1 million households due to be affected by the change, 316,000 have not yet been contacted by the tax authorities. As a result, having missed the opportunity to opt out of the new system (as 160,000 have done), they will have to fill in self-assessment forms or face fines running into hundreds of pounds.

A spokesman for HMRC insists that "extensive advertising, media and online activity" means those affected will know about the changes. However, it's not hard to imagine that some families will get a nasty surprise when they discover that they owe hundreds of pounds in additional tax.

But then the Conservatives have long appeared complacent over the policy. Last year, in a bid to assuage Tory MPs fearful that the party could be heading for a 10p tax moment, George Osborne released private polling showing that 82 per cent of people favour the plan, with just 13 per cent opposed. But as I've argued before, more important than the question of how many oppose the policy, is the intensity of their opposition. If even a small chunk of the 13 per cent opposed to the move vote against the Tories in protest at the next election, the party will suffer significant losses. And those who lose out certainly won't be feeling charitable if the government hasn't had the courtesy to inform them of as much.

George Osborne announced the coalition's plan to remove child benefit from higher earners at the 2010 Conservative conference. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty
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The rise of the green mayor – Sadiq Khan and the politics of clean energy

At an event at Tate Modern, Sadiq Khan pledged to clean up London's act.

On Thursday night, deep in the bowls of Tate Modern’s turbine hall, London Mayor Sadiq Khan renewed his promise to make the capital a world leader in clean energy and air. Yet his focus was as much on people as power plants – in particular, the need for local authorities to lead where central governments will not.

Khan was there to introduce the screening of a new documentary, From the Ashes, about the demise of the American coal industry. As he noted, Britain continues to battle against the legacy of fossil fuels: “In London today we burn very little coal but we are facing new air pollution challenges brought about for different reasons." 

At a time when the world's leaders are struggling to keep international agreements on climate change afloat, what can mayors do? Khan has pledged to buy only hybrid and zero-emissions buses from next year, and is working towards London becoming a zero carbon city.

Khan has, of course, also gained heroic status for being a bête noire of climate-change-denier-in-chief Donald Trump. On the US president's withdrawal from the Paris Agreement, Khan quipped: “If only he had withdrawn from Twitter.” He had more favourable things to say about the former mayor of New York and climate change activist Michael Bloomberg, who Khan said hailed from “the second greatest city in the world.”

Yet behind his humour was a serious point. Local authorities are having to pick up where both countries' central governments are leaving a void – in improving our air and supporting renewable technology and jobs. Most concerning of all, perhaps, is the way that interest groups representing business are slashing away at the regulations which protect public health, and claiming it as a virtue.

In the UK, documents leaked to Greenpeace’s energy desk show that a government-backed initiative considered proposals for reducing EU rules on fire-safety on the very day of the Grenfell Tower fire. The director of this Red Tape Initiative, Nick Tyrone, told the Guardian that these proposals were rejected. Yet government attempts to water down other EU regulations, such as the energy efficiency directive, still stand.

In America, this blame-game is even more highly charged. Republicans have sworn to replace what they describe as Obama’s “war on coal” with a war on regulation. “I am taking historic steps to lift the restrictions on American energy, to reverse government intrusion, and to cancel job-killing regulations,” Trump announced in March. While he has vowed “to promote clean air and clear water,” he has almost simultaneously signed an order to unravel the Clean Water Rule.

This rhetoric is hurting the very people it claims to protect: miners. From the Ashes shows the many ways that the industry harms wider public health, from water contamination, to air pollution. It also makes a strong case that the American coal industry is in terminal decline, regardless of possibile interventions from government or carbon capture.

Charities like Bloomberg can only do so much to pick up the pieces. The foundation, which helped fund the film, now not only helps support job training programs in coal communities after the Trump administration pulled their funding, but in recent weeks it also promised $15m to UN efforts to tackle climate change – again to help cover Trump's withdrawal from Paris Agreement. “I'm a bit worried about how many cards we're going to have to keep adding to the end of the film”, joked Antha Williams, a Bloomberg representative at the screening, with gallows humour.

Hope also lies with local governments and mayors. The publication of the mayor’s own environment strategy is coming “soon”. Speaking in panel discussion after the film, his deputy mayor for environment and energy, Shirley Rodrigues, described the move to a cleaner future as "an inevitable transition".

Confronting the troubled legacies of our fossil fuel past will not be easy. "We have our own experiences here of our coal mining communities being devastated by the closure of their mines," said Khan. But clean air begins with clean politics; maintaining old ways at the price of health is not one any government must pay. 

'From The Ashes' will premiere on National Geograhpic in the United Kingdom at 9pm on Tuesday, June 27th.

India Bourke is an environment writer and editorial assistant at the New Statesman.

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