Thursday, January 10, 2008

Tax pays for things

George Osborne on David Blunkett on social mobility:

I don't agree with all Blunkett's proposals - increasing taxes on higher earners is not going to solve the problems of any sink estate. But many are worthy of serious consideration, and chime with Conservative thinking. For example, he proposes a "personalised supplementary educational allowance" - a complicated term for the simple idea that schools need extra help with disadvantaged children.

Now here’s what Blunkett had said:

One solution would be to introduce a Personalised Supplementary Educational Allowance that would invest extra money in staff to provide general mentoring and support for the poorest school children. … One way to fund this could be to tax the child benefit received by higher rate tax payers for children over 16…

So the allowance might be a good idea, but paying for it wouldn’t be.

Two truths: the Conservatives are instinctively against tax; and oppositions are naturally drawn to potentially costly new ideas. The two don’t go together very convincingly. Even in a case such as this, where Blunkett has so clearly spelled out ‘this could pay for that’, Osborne cannot help but separate the two elements and judge them separately.

No, taking money from high earners will not help the poor. Not will taking pills out of the bottle ease your headache.

Aside: Why is Osborne against reducing the child benefits paid to certain (well-off) parents of older children? Aren’t the Tories all in favour of reducing welfare dependency? Just this week, they produced plans to cut the benefits paid to certain (lone) parents of older children. It’s a mystery…

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