Before the chancellor George Osborne pulled a rabbit from a hat at the 2010 Tory conference he ought to have a read up on an ancient law. The law of unintended consequences is immutable, yet widely ignored by politicians keen to make eye-catching headlines.
In a move that, at first blush, seemed both bold and progressive, the Chancellor decreed that child benefit would no longer be paid to families where at least one parent paid higher-rate tax – currently levied on those with incomes greater than £44,000.
It took less than a day for tax and finance experts from across the UK to query why a couple where both parents earned £43,000 should keep all their child benefit, while a family where one parent earned £45,000 and the other £15,000 would lose the lot.
The rationale for the policy soon unraveled with critics from left and right deeming it misconceived and unfair.
This morning, both the Prime Minister David Cameron and the culture secretary Jeremy Hunt have suggested they’d like to tweak it. “This is to soften people up for a policy change in the March budget,” George Bull, head of the professional practices group at accountancy major Baker Tilly, told professionalmanager.co.uk. “I am expecting a full u-turn.”
Perhaps that is no surprise. The policy was deeply unpopular with many of the government’s own supporters. And the coalition, like the Labour government before it – remember Gordon Brown’s 10p tax rate blunder? – is becoming well-practiced in the volte-face.
The bigger question is:
Why does this keep happening?
Bull suggests that politicians’ unwillingness to apply the law of unintended consequences is not the only reason why successive governments bungle policymaking. “I think you are being charitable there,” he says, “In reality policy announcements are always going to be made in a fashion that is most favourable to the government. But the details have to be hung on rules and regulations that are often very difficult to comply with.”