The Spending Plan policy 41: abolish the Christmas bonus

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The Christmas bonus was introduced in 1972 and is given to claimants of certain benefits in the run up to Christmas. At present it is a one-off, tax-free payment of £10. Christmas can be a costly period for many people but the government should instead look at its own interventions and the impact they have on the cost of living. High taxes on consumer products, for instance, often make up a significant proportion of the cost. Over 70 per cent of the cost of petrol for those wishing to drive to see relatives in the festive period is tax. Taxes on drinks to see in the new year range from 50 to 70 per cent.

The administration costs of benefits like this are too high and as part of a broader reform, payments like this should be abolished to save money and simplify the system. The overall bill is around £150 million a year, so scrapping it will deliver a significant saving.

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