Philip Booth writes for City AM
But it’s not clear whether the Conservatives would have done better alone. Changes to child benefits, introduced yesterday, were their decision and they’re a shambles. There is a clear case for abolishing child benefit and using the £12.5bn in savings to create a system of transferable tax allowances to lift families out of tax. Instead, the government has bottled it and played around at the edges. Its reforms create huge effective marginal tax rates for families with one earner on over £50,000 a year, as well as discriminating against single-earner couples.
To complicate matters further, the government has now proposed tax relief of up to £2,000 a year to assist working mothers with the costs of childcare. In other words, yet more tinkering, with stay-at-home mothers implicitly discriminated against. A better solution would have been to deregulate the sector to drive down the costs of childcare – now some of the highest in Europe.
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