Today must count as one of the most encouraging days for the centre right in British politics in recent times. Labour’s apparent abandonment of universal child benefit is a massive blow to the 1945 settlement. It is akin in significance to when Labour began to accept the privatisations of the Thatcher era.
Now, there’s no intellectual difference between declaring that better off pensioners won’t receive winter fuel payments and that better off mothers won’t receive child benefit. But in symbolic terms, the difference is huge. The winter fuel payment is a recent addition to the welfare state, introduced by the last Labour government. It is not fundamental to it. By contrast, child benefit—or family allowance, as it was initially called—is one of the pillars of the welfare state, an original recommendation of the Beveridge report. If it can cease to be universal, why can’t the state pension?
Downing Street can barely conceal its delight about Labour’s apparent u-turn. When George Osborne first proposed removing child benefit from higher rate taxpayers, there was chuntering from some on the right. But Labour’s acceptance of it today offers the Tories a chance to start redefining what the welfare state is, turning it into more of a safety net than a universal service. This would be more fiscally sustainable and wouldn’t need such large tax increases to continue funding it.
When the Tories were out of power’, Osborne—to the irritation of many on his own side—was sceptical of the party’s ability to change the terms of political debate. He used to urge patience, saying ‘in opposition, you move to the centre. In government, you move the centre.’ Labour’s acceptance of the child benefit cut is proof that, in at least one area, he has done that.
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