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 From 7 January, payments will be tapered away from individuals earning over £50,000 and completely withdrawn at £60,000 (however, a household with two earners each on £50,000 will keep the benefit in full).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.

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Tony Blair might be a toxic figure - but his influence endures

Politicians at home and abroad are borrowing from the former prime minister's playbook. 

On 24 May at Methodist Central Hall, Westminster, a short distance from where he once governed, Tony Blair resurfaced for a public discussion. Having arrived on an overnight flight, he looked drawn and puffy-eyed but soon warmed to his theme: a robust defence of liberal globalisation. He admitted, however, to bafflement at recent events in the world. "I thought I was pretty good at politics. But I look at politics today and I’m not sure I understand it."

Blair lost power in the summer of 2007. In the ensuing nine years, he lost reputation. His business ventures and alliances with autocrats have made him a pariah among both the public and his party. A YouGov poll published last year found that 61 per cent of voters regarded Blair as an electoral liability, while just 14 per cent viewed him as an asset. In contrast, John Major, whom he defeated by a landslide in 1997, had a neutral net rating of zero. It is ever harder to recall that Blair won not one general election (he is the only living Labour leader to have done so) but three.

His standing is likely to diminish further when the Iraq inquiry report is published on 6 July. Advance leaks to the Sunday Times suggest that he will be censured for allegedly guaranteeing British military support to the US a year before the invasion. Few minds on either side will be changed by the 2.6 million-word document. Yet its publication will help enshrine Iraq as the defining feature of a legacy that also includes the minimum wage, tax credits, Sure Start, devolution and civil partnerships.

Former leaders can ordinarily rely on their parties to act as a last line of defence. In Blair’s case, however, much of the greatest opprobrium comes from his own side. Jeremy Corbyn inclines to the view that Iraq was not merely a blunder but a crime. In last year’s Labour leadership election, Liz Kendall, the most Blair-esque candidate, was rewarded with 4.5 per cent of the vote. The former prime minister’s imprimatur has become the political equivalent of the black spot.

Yet outside of the Labour leadership, Blairism endures in notable and often surprising forms. Sadiq Khan won the party’s London mayoral selection by running to the left of Tessa Jowell, one of Tony Blair’s closest allies. But his successful campaign against Zac Goldsmith drew lessons from Blair’s election triumphs. Khan relentlessly presented himself as “pro-business” and reached out beyond Labour’s core vote. After his victory, he was liberated to use the B-word, contrasting what “Tony Blair did [in opposition]” with Corbyn’s approach.

In their defence of the UK’s EU membership, David Cameron and George Osborne have deployed arguments once advanced by New Labour. The strategically minded Chancellor has forged an unlikely friendship with his former nemesis Peter Mandelson. In the domestic sphere, through equal marriage, the National Living Wage and the 0.7 per cent overseas aid target, the Conservatives have built on, rather than dismantled, significant Labour achievements."They just swallowed the entire manual," Mandelson declared at a recent King’s College seminar. "They didn’t just read the executive summary, they are following the whole thing to the letter."

Among SNP supporters, "Blairite" is the pejorative of choice. But the parallels between their party and New Labour are more suggestive than they would wish. Like Blair, Alex Salmond and Nicola Sturgeon have avoided income tax rises in order to retain the support of middle-class Scottish conservatives. In a speech last August on education, Sturgeon echoed the Blairite mantra that "what matters is what works".

Beyond British shores, political leaders are similarly inspired by Blair – and less reticent about acknowledging as much. Matteo Renzi, the 41-year-old centre-left Italian prime minister, is a long-standing admirer. "I adore one of his sayings,” he remarked in 2013. “I love all the traditions of my party, except one: that of losing elections."

In France, the reform-minded prime minister, Manuel Valls, and the minister of economy, Emmanuel Macron, are also self-described Blairites. Macron, who in April launched his own political movement, En Marche!, will shortly decide whether to challenge for the presidency next year. When he was compared to Blair by the TV presenter Andrew Marr, his response reflected the former prime minister’s diminished domestic reputation: “I don’t know if, in your mouth, that is a promise or a threat.”

The continuing attraction of Blair’s “third way” to European politicians reflects the failure of the project’s social-democratic critics to construct an alternative. Those who have sought to do so have struggled both in office (François Hollande) and out of it (Ed Miliband). The left is increasingly polarised between reformers and radicals (Corbyn, Syriza, Podemos), with those in between straining for relevance.

Despite his long absences from Britain, Blair’s friends say that he remains immersed in the intricacies of Labour politics. He has privately warned MPs that any attempt to keep Corbyn off the ballot in the event of a leadership challenge would be overruled by the National Executive Committee. At Methodist Central Hall, he said of Corbyn’s supporters: “It’s clear they can take over a political party. What’s not clear to me is whether they can take over a country.”

It was Blair’s insufficient devotion to the former task that enabled the revival of the left. As Alastair Campbell recently acknowledged: “We failed to develop talent, failed to cement organisational and cultural change in the party and failed to secure our legacy.” Rather than effecting a permanent realignment, as the right of the party hoped and the left feared, New Labour failed to outlive its creators.

It instead endures in a fragmented form as politicians at home and abroad co-opt its defining features: its pro-business pragmatism, its big-tent electoralism, its presentational nous. Some of Corbyn’s ­allies privately fear that Labour will one day re-embrace Blairism. But its new adherents would never dare to use that name.

George Eaton is political editor of the New Statesman.

This article first appeared in the 26 May 2016 issue of the New Statesman, The Brexit odd squad