tell me I've dreamt this - DC proposing to give tax breaks to the middle classes (who can already afford this) to help them pay for their cleaners/nannies/gardeners????

cogito - Himalaya has answered your point far better than I can. I don't see cleaning as 'demeaning' - I've worked as a cleaner, actually; have you? - but nor do I see increasing the numbers of cleaners as the way to improve our economy in terms of global competitiveness. To improve the quality of life for everyone in our country - not just those wea;lthy enough to afford the cleaner - we need to invest in industries that can stand on an international stage. By definition, cleaning someon's house in Kensington or wherever cannot.

Unless you see the potential for growth in our country being by subsidizing cleaners, who in turn, spend their newly acquired wages on themselves employing a cleaner...and so it goes on...?? Can't see it as a long-term strategy myself.

Or do you fantasise idly about a world in which I clean your house while you clean mine, all happily subsidized by the UK taxpayer? Hmmm.

But it doesn't have to be complicated surely. You (being the govt) "sell" the cheques for one value, and redeem them at another. You insist that certain categories of work are paid only through this scheme. You ensure that agencies give proper contracts for the work after a qualifying period. I don't think you have to even think about what someone's personal or household income is on the demand side.

Just to give an example: An hour's work costs £10. You sell the cheque for £7.50. You pay the agency the balance (what ever that might be - say £20), and they manage the tax, NI payments, holiday pay, pension etc.

The buyer gets a cost advantage, the employee gets protection and job contract, the govt gets additional tax payers, and a reduction in benefit payouts and pressure put on the black economy.

My ex-MIL has worked as a cleaning lady a few hours a week for the past 35 years. She started it when her youngest went to school, to bring in a bit of extra income, but has always worked cash-in-hand.

When the cheques were introduced, both her sons tried to encourage her to join the scheme, but she refused, worried that it would tip their household income into the taxable range (her husband worked full-time but in a low-paid, menial job and they didn't pay any income tax).

They are now both in their 60s and her husband retired several years ago. They can't afford to lose her income (as they're in debt up to their eyeballs, but that's a different rant), and because she has never made pension contributions, that means she can't afford to retire!

It also means she has no sick pay entitlements, so they got behind on payments when she had an accident recently and broke her arm. And of course she gets no holiday pay, so she works 52 weeks a year, just to keep afloat.

The cheque scheme would have made such a huge difference to them in the long term!

"It's not that these jobs are demeaning but they don't bring with them any measure of power and escalating skills for the working class, in the way that skilled manufacturing does."

And, in the absence of adequate skilled manufacturing you're arguing that people should stay home and do nothing just because cleaning or similar doesn't offer a measure of power? Work is work. There's no such thing as dirty money and there's no point sitting back waiting while the world turns to match your aspirations.

re child ben from here

"The LITRG argues that whatever approach the government takes, it will be fraught with difficulty because:

There is no definition of "household" in tax law
It is impossible to know who is a higher-rate taxpayer until their income for a whole tax year has been assessed
Child benefit operates entirely outside the tax system
This would make it very hard for the government to introduce a "tapered" policy whereby it withdraws the benefit gradually - rather than suddenly - as someone's income rises into the higher-rate tax category.
The LITRG argues that the new system would also undermine the independent taxation of married people, who are responsible for their own taxes and not of their spouses."

Just came up in a quick google but I read a more extensive article about it.

athing I have just listed at length the hurdles and how this does not fit into the current tax system.

In fact I have done so repeatedly. You just keep ignoring them.

You don't need to be a "tax expert" to understand the basics of how our tax system works - you simply need to be a person living here who has had exposure to it. The fact that HMRC operates at an individual level is basic and surely everyone knows this especially given the hoo-ha about child benefit. The reason for the hoo-ha is that child benefit is run by HMRC and they cannot administer it as they simply do not have the required info (family info). It has been all over the news for about a year. The other reason for the hoo-ha is that the (unworkable) theory means that families with more money will continue to receive it and families with less will lose it. There has been a huge outcry - again it has been all over the news for months - and yet you suggest applying the same mechanism to these tax breaks. Why? It seems fundamentally unfair to me. Can you at least explain why you think that is a good idea?

"So yes, I think the policy might be a good idea, but don't think 'a jobs a job' when it comes to industrial policy."

Agreed.

It's just tinkering around the edges. I'm just interested in whether it's good tinkering or bad tinkering.

My lefty prejudice makes me keen to find out more about successful policies from Sweden, and I'd love to hear more about how something like this might work (or fail) here from someone who understands the British tax system.

I've not yet read any tax experts saying this is a bad, or unworkable, idea.

If it's easy to implement and has no significant cost implications, but potentially positive effects on our dying economy, then it's worth considering.

Certainly I agree with claig that round after round of QE going straight to the banks is just bolstering bank balance sheets and precious little else.

I would support far more radical stimulus spending, but while that ain't happening with Austerity Osborne in charge, I'll take what's going.

"But apparently we can't borrow ideas from successful neighbours unless we copy everything they do, because otherwise it is just an unworkable "bolt on" (and we don't need to know ANYTHING about their tax system to declare it an unworkable bolt on) "

athing why do you keep picking up on my posts?

Looking at the entire integrated different tax regime of a different country and picking out two occupations to subsidise, while ignoring the rest of the tax regime and teh other occupations ie childcare, is bolting it on.

Your latest suggestion is that for fairness this only be offered to lower income families, and that other things work on that basis so it should be fine to administer.

1. That would make it an entirely different proposition to the one suggested - a tax break is a tax break and would need to be via HMRC. There is a problem there are HMRC do not work on family taxation
2. Your idea it would be for lower income families only. Well that is a different thing entirely. Even with the break are lower income families going to be hiring cleaners and gardeners? Given how people are struggling. Will this really stimulate employment?
3. Your idea it would run via the current system for this. I assume you are talking about the tax credits system? That is not a tax break then, it is a different mechanism and very different to what other countries do.
4. Tax credits are being abolished

You keep picking out my posts and being quite aggressive, then when I ask you how exactly this is going to work and point out what I think are some fairly fundamental flaws you say I am "illogical".

Then go on to say things like "What's startlingly obvious to me is that discussions about tax policy are more interesting when people are prepared to talk about the policies proposed rather than fantasising about the evil soul of the person proposing the policy." which given the target of your other posts I assume is aimed at least in part at me. I have not mentioned evilness on this thread but been trying to find out what this means, whether it will work and how they are going to do it. ie talking about the proposals which you say is what you want. If you don't like what I'm saying then fine but FGS stop hurling random accusations at me and the failing to explain how on earth you think the government are going to address the fairly massive hurdles people are talking about, and how you think this policy is going to make money for the government.

I mean this comment "It would be pretty easy not to offer relief at the higher tax rate if that was felt to be unfair, that already happens for some things."

Tell me which things have this feature of no tax relief for higher earners
Tell me how much money you think will be generated if higher earners are excluded from this policy
Tell me how you are going to link it to families when HMRC do not do this
Tell me if you are bot offering it to HRTs how you are going to get around the problem they have with child ben about wealthier families getting it and poorer families not
etc etc

Just accusing people of being illogical and talking about evil is not a good argument. You want to talk about policy - fine - tell me how this is going to work, in practice, in the UK, and how you think it will generate money.

Cogito - I'm not 100% against the policy and do think it's worth discussing, but I also think its worth discussing what kind of jobs the government wants to create.

A job is a job, but the kinds of jobs that create economic growth are the ones where productivity can be improved through innovation and technology, and where we can trade high value goods and services with other nations.

The thing about domestic service and care jobs is that they don't get that much more efficient over time, and you can't build a world class economy on them. So a nation with a high % of people doing those jobs and few working in a tradable sector, creating tomorrow's industiesr is going to struggle to compete and maintain high living standards, no?

It's not that these jobs are demeaning but they don't bring with them any measure of power and escalating skills for the working class, in the way that skilled manufacturing does. Yes a jobs a job, but I don't think many high earners will be saying "William do you want to be a cleaner or follow daddy into bond trading, either is good."

I don't think it's complete paranoia to wonder in whose interests the tories are acting when, having decimated the British manufacturing industry the last time they were in power, they now suggest domestic service as a job growth area.

Labour too bought into the idea that the country doesn't need to make anything apart from financial services, and I think the trickle-down-through-benefits model has been equally corrosive.

So yes, I think the policy might be a good idea, but don't think 'a jobs a job' when it comes to industrial policy.

What's startlingly obvious to me is that discussions about tax policy are more interesting when people are prepared to talk about the policies proposed rather than fantasising about the evil soul of the person proposing the policy.

Why would a system like the Swedish system turn Britain back to the time of a fictional TV series?

Nobody has suggested that this small change to the tax system would end the UK's depression or that it would revolutionise the economy. Just that it might be a good idea.

But apparently we can't borrow ideas from successful neighbours unless we copy everything they do, because otherwise it is just an unworkable "bolt on" (and we don't need to know ANYTHING about their tax system to declare it an unworkable bolt on)

"questioning whether domestic service is really the kind of employment we wish or need to be subsidizing"

You might think a job that is 'domestic' is demeaning but other people are not quite so snooty. A job's a job. What does it matter whether it's working for council contractor collecting bins or working for Mr Smith mowing his lawn?

Should add I loove the sound of the French and belgian versions...no chance of anything that sensible happening here....

Is it not startlingly obvious that the society that Cameron would like to return to, nay aches to return to, is that of Downton Abbey? He would like a situation we had up until the early years of the 20th C where the only or certainly main route out of unemployment and penury for working class women was domestic service.

Now call me odd, or even feminist, but this isn't really something I welcome.

Unlees you're v weird - or a Tory - a return to literally Victorian values of no healthcare unless you can afford it, 'deserving' and 'undeserving' poor clearly demarcated and the undeserving sent to the modern equivalent of the workhouse ie workfare, along with all female proles put down for a life of domestic servitude - but with the extra giggle thrown in that their taxes are subsidizing their masters' servants' bill by paying for a tax credit, does not really appeal.

I have nothing against using the tax system to stimulate employment, just questioning whether domestic service is really the kind of employment we wish or need to be subsidizing. Will it really make us world class competitors on an international stage again? Or just turn us into a real-life Dickensian freakshow?

Ultimately though the only person who would be able to redeem them for cash at full face value would bea cleaner, CM, home help or whatever who had registered with the scheme and had been paid to do some work for somebody.

Don't know how much it would cost but perhaps less than all the different departments saying we can help you with this but bit with that e,g. Medical vs practical care, support for families under pressure, support for children,SN,HVs, back to work support, schemes for this and that etc.... Have a simpler assessment system and let people choose what kind of help they need when, through a combination if personal and stare resources.... While at the same time better than a tax break for those with no particular social need because it would be spent locally.

Dont know if it would work, just wondering ...

I wonder what a system like that would cost to administer?

I think making it possible to redeem the cheques for cash would possibly undermine the purpose of them. I guess people could buy and sell them privately - is that allowed in Belgium?

It would be pretty easy not to offer relief at the higher tax rate if that was felt to be unfair, that already happens for some things.

Porto -

That sounds like a good system. I wonder why it needs to be linked to the tax system at all?

I think part of the reason the tax idea might not fly in the uk is it would be seen as an Upstairs-Downstairs thing - giving most benefit to high rate tax payers, less to regular tax payers and least to non-tax payers.

What about a system where each individual is allowed to purchase up to a standard number of cheques for £5, which can be used to pay for £10 worth of service? Everyone gets the same number, people on low incomes might be able to buy them for £2, say. People with high needs could be given more cheques either one-off e.g. When a baby is born, or on a regular basis e.g. for SN.

If you dont need any help, want to be a SAHP etc.. without extra help you could sell your cheques on an exchange and keep the money yourself.

Would create jobs, put more power in individual's hands, reduce bureaucracy?

Sweden has a v high tax rate
V long parental leave both parents
All terribly flexible
Lots of cheap childcare
Don't know how they tax
It's just a different kettle of gravdlax fish.

Because his comment was that he would provide tax relief for hiring cleaners and gardeners for families.

If he was going to provide it for everyone... Well I can't really see that, can you? The blurb said it was aimed at families and would especially appeal to women with younger children.

(Cos women do all the cleaning and gardening, obv)

Why would you need to move to a family-based tax system to implement this policy?

Does anybody know about how it works in Sweden?

That's the model Cameron was praising, how does it work there?

Anyway I'm going to sign off now.
Once again feeling about the arrangements some of our european friends have!

I know how much you like the term "progressive" claig. And how left-leaning people should applaud anything "progressive".

Moving from an individual based tax system to a family based tax system is not progressive. And will be a humungous change. And will be terribly complicated.

There is an old Chinese proverb that Cameron probably knows well

"a journey of a thousand miles starts with a single step"

this is a step in the right direction to encourage enterprise and employment. After the leap backwards over the last 13 years, this is at least a step forwards.

Can you imagine how a policy like that would go down over here?

Quicker than a lead balloon

That is a brilliant idea!