Beyond the immediate political battles being fought by the Labour party against the Scottish National party, and the Conservatives against both of them, there is a more fundamental tension north of the border. It is between politics and economics.
The pro-independence SNP has the political momentum. Not only is it set to win the vast majority of Scottish Westminster seats, its rise has provoked the sort of reaction among senior Conservatives such as Sir John Major that serves its cause. The more the SNP playing a role in Westminster is seen as somehow illegitimate (a ridiculous notion), the more it fosters the belief that Scotland and England are drifting apart. Read more
This year is likely to be one of the hardest for the coalition, as spending cuts begin to hit harder than ever before. Tory MPs are warning that the measure that is most worrying their constituents is the removal of child benefit from higher earners, and analysis today from the Institute of Fiscal Studies gives us some inclination as to why.
The IFS has examined how much this will cost parents earning over £50,000 – the point at which the payments begin to be taken away. It has found that the measure will mean that for someone with one child who earns over £50,000, they will have a marginal tax rate of 52.6 per cent. In other words, for every extra pound earned over that level, 52.6p will be taken away. As they continue to go up the income scale, they will lose more and more cash until they hit £60,000 and all the child benefit payments are gone. This results in a marginal tax graph that looks like this:
Here is a link to the full ft.com story if you are interested. But the key points of this morning’s report by the Institute of Fiscal Studies – on the impact of IDS’s universal credit – is: