Letter: Tax benefits

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The Independent Online
Your leading article ("Three steps forward and one step back for Mr Brown", 10 February) identifies a central theme of the forthcoming Budget as a shift from cash benefits to tax reliefs, most importantly via the replacement of family credit by a working families tax credit.

You praise the psychological advantage of shifting to a culture where people feel that they stand on their own feet rather than relying on state handouts. This has always been the traditional Treasury distinction between tax reliefs / allowances and benefits, of course - and a completely artificial one it is too.

In recent months, the new government seems by and large to have stopped referring to "welfare dependency", "handouts" and the "underclass". This is a very welcome change. But to distance in-work support from help given via social security, by routing it via the tax system instead, risks exacerbating the existing divisions between those in and out of work and the stigma of reliance on benefits.

To justify this by feeding the illusion that those of us in work are free-standing individuals getting no support via the fiscal system is to add insult to injury.