Progressives or regressives? The Lib Dems must choose on childcare policy

The coalition hasn’t resolved the role the welfare system should play in supporting families with children. The impasse on childcare policy reflects this.

Often it takes the deadline of an impending announcement to really expose underlying tensions about the future direction of policy. The coalition’s recent sorry saga on childcare policy  – breathless briefings about a major expansion in tax-relief meant to herald the coalition’s renewed vitality, followed by an awkward silence and then the inevitable stories about who is to blame for the lack of progress - is a case in point.  Never mind what this tells us about the coalition’s aptitude for media management, it also reflects something important about underlying attitudes towards the nature of the tax and benefit system. 

There have, of course, always been different objectives in our welfare system with different parties placing varying amounts of weight on them: social insurance or poverty reduction; targeting individuals or households. But when it comes to the question of how to support families with children through the tax and benefit system the current government seems to be in more of a muddle than most. Which in some respects is odd given that there is actually a fair amount of agreement within it.

To unpick this we need to consider that different governing logics are shaping current tax and benefit reforms. First, there is the agenda of targeting financial support at poorer households and doing this in a way that seeks to support work incentives. That’s the logic of Universal Credit (leave to one side whether it will be successfully delivered); just as it was for much, though not all, of the tax credit system that was built up under Labour. Both coalition parties agree there is still a role for this approach; but both think it should be a much diminished one (in part because of fiscal constraints, but not only because of this). Hence spending in pursuit of this objective has been cut back sharply and child poverty is set to climb steeply as a result.

Then there is the agenda of ensuring ‘fairness’ for individual tax payers as opposed to households. This second logic results in the personal tax allowance being prioritised. It is completely blind to household income or family circumstance: it matters not a jot to the size of your tax allowance whether you have no children or five. Again, both coalition parties have agreed it is right to spend very large sums of money on supporting individuals in the tax system – though the Lib Dems have been in the vanguard. The unnecessary collision between raising the personal tax allowance on the one hand, and the design of the Universal Credit on the other (something that has been highlighted before on this blog), meaning that low income claimants will lose the majority of any gains arising from future increases in their tax allowance, perhaps reflects the different political homes of the two flagship policies. 

There is a third and contrasting logic that says the tax and benefit system should be designed to recognise the financial pressures facing different types of households, for instance those with children compared to those without. This is sometimes referred to as a ‘tax-rebate’ objective – the point being that it’s not right to ask a family with three children to pay the same tax-bill as the single person on the same earnings (‘tax-rebate’ is in fact a misnomer as it’s about the additional costs a household may face whether or not they are supported through the tax or benefit system).

It was this  ‘rebate’ argument that led to child tax allowances being created in the People’s Budget by Lloyd George, renewed by Beveridge (alongside the family allowance), and then replaced by their more progressive and female-friendly successor, Child Benefit, ushered in by Barbara Castle in the mid-1970s. It was also this logic that underpinned a poorly explained part of Labour’s tax credit system: the ‘family element’, which was in effect a form of flat-rate payment, a bit like a tax allowance, which went to the majority of families with children though not the richest. This majoritarian component of tax credits was never really communicated in ‘rebate’ terms - and for both political and administrative reasons it was probably a mistake to include it in the tax credit system. Either way, that’s the role it played.

Support for this ‘rebate’ argument has recently also been in sharp retreat – at least when it comes to the benefit system. Child benefit has been frozen and clumsily affluence tested, and tax credits stripped away from middle income households. The result is that there are now two systems of means-tested support for families in operation at different parts of the income distribution. Again, both coalition parties have agreed to these changes - though I very much doubt either would have designed from scratch what has emerged as a result. 

So far this describes a picture of politically harmonious messiness on the question of how the tax and benefit system should support families. But sharper coalition tensions emerge when it comes to using the tax (as opposed to benefits) system to give recognition to different types of households. The Conservative Party is, of course, formally committed to a tax allowance to support marriage – a proposal which the Lib Dems can’t conceal their contempt for (along with, in private at least, a number of ‘liberal’ Tories). Tellingly, some influential voices on the right are pushing for the (re)creation of child tax allowances as opposed to a marriage allowance. Meanwhile, in a new twist to this ‘rebate’ logic, David Cameron and George Osborne want to use the tax system to support families with children so long as this is specifically for the costs of childcare, not those incurred more generally in raising a child. Tax-breaks (good thing) rather than tax credits or cash benefits (bad thing) are the order of the day: tax-break universalism appears to be alive and well; benefit-universalism is very last season.

On this note, at least, the Lib Dems appear, for now, to demur – hence the current childcare impasse (though doubtless a compromise will eventually be reached). Some, at least, are acutely aware that tax-reliefs - while often quite popular - are almost inescapably regressive. They exclude those who don’t work along with the rapidly growing numbers of the low paid who earn too little to pay tax – together amounting to roughly 40 per cent of the working age population. They are tilted against even larger numbers who earn too little to take full advantage of the relief on offer. And, of course, tax reliefs do much more for dual earning households who tend to be better off than their single earning counterparts. (It’s noteworthy, however, that the same Lib Dems have a tin ear when much the same arguments are applied to the personal tax allowance itself). Whether you love or loathe it, the policy of ‘taking people out of tax’ accentuates the distributional impact of tax-breaks. 

The result? Either Lib Dems reconcile themselves to the fact that the biggest gains from tax-breaks will be captured by higher income households - all the more so because of their own flagship tax policy - or they push back against the proposed use of reliefs and make an argument for the direct funding of universal childcare services as a central element of the welfare state. Which, as it happens, is the sort of argument they would have to sign up to if they find themselves in any sort of governing arrangement with Labour after 2015.

For now, we are left with the appearance of coalition confusion on how best to use the tax and benefit system to support families. Though, perhaps it’s less confusion and more that there are different parts of government who are each clear about the variety of welfare logic they want to prioritise - and no part of government capable of successfully reconciling them. Whoever wins the next election will inherit a system of support for families that no party will feel comfortable with.

David Cameron and Nick Clegg speak at a press conference inside 10 Downing Street to mark the coalition's half-way point earlier this month. Photograph: Getty Images.

Gavin Kelly is a former adviser to Downing Street and the Treasury. He tweets @GavinJKelly1.

Photo: Getty
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Why gay men love this photo of Prince George looking fabulous

It's not about sexuality, but resisting repressive ideas about what masculinity should be.

Last week’s royal tour by the Duke and Duchess of Cambridge provided the most intimate view of the young family to date. Throughout the five-day visit to Poland and Germany, it was the couple’s adorable children who stole the spotlight.

As George and Charlotte become better acquainted with a world in which everyone recognises them, this level of public scrutiny is something that will no doubt have to be carefully managed by the family.

But there is one particular image from the trip that has both captured people’s hearts and prompted debate. On the eve of his fourth birthday, Prince George was invited behind the driver’s seat of a helicopter in Germany. Immaculately dressed in a purple gingham shirt neatly tucked in to navy shorts, the future King is pictured staring out of the helicopter in awe.

As a man who was visibly gay from a young age, the distinctly feminine image of George smiling as he delicately places his hands on his face instantly struck a chord with me. In fact, an almost identical photograph of five-year-old me happily playing in the garden is hung on my parents' kitchen wall. Since the photos appeared online, thousands of other gay men have remarked that the innocence of this image reminds them of childhood. In one viral tweet, the picture is accompanied by the caption: “When mom said I could finally quit the soccer team.” Another user remarks: “Me walking past the Barbies at Toys ‘R’ Us as a child.”

Gay men connecting this photograph of Prince George with their childhood memories has been met with a predictable level of scorn. “Insinuating that Prince George is gay is just the kind of homophobia you’d be outraged by if it was you," tweets one user. “Gay men should know better than that. He is a CHILD," says another.

Growing up gay, I know how irritating it can be when everyone needs to “know” your sexual orientation before you do. There are few things more unhelpful than a straight person you barely know telling you, as they love to do, that they “always knew you were gay” years after you came out. This minimises the struggle it took to come to terms with your sexuality and makes you feel like everyone was laughing at you behind your back as you failed to fit in.

I also understand that speculating about a child's future sexual orientation, especially from one photograph, has potential to cause them distress. But to assume that gay men tweeting this photograph are labelling Prince George is a misunderstanding of what we take from the image.

The reaction to this photo isn’t really about sexuality; it’s about the innocence of childhood. When I look at the carefree image of George, it reminds me of those precious years in early childhood when I didn’t know I was supposed to be manly. The time before boys are told they should like “boy things”, before femininity becomes associated with weakness or frivolity. Thanks to a supportive environment created by my parents, I felt that I could play with whichever toys I wanted for those short years before the outside world pressured me to conform.

Effeminate gay men like me have very specific experiences that relate to growing up in a heteronormative world. It is incredibly rare to see anything that remotely represents my childhood reflected in popular culture. This image has prompted us to discuss our childhoods because we see something in it that we recognise. In a community where mental illness and internalised homophobia are rife, sharing memories that many of us have suppressed for years can only be a good thing.

People expressing outrage at any comparisons between this image and growing up gay should remember that projecting heterosexuality on to a child is also sexualising them. People have no problem assuming that boys are straight from a young age, and this can be equally damaging to those who don’t fit the mould. I remember feeling uncomfortable when asked if my female friends were my girlfriends while I was still in primary school. The way young boys are taught to behave based on prescribed heterosexuality causes countless problems. From alarmingly high suicide rates to violent behaviour, the expectation for men to be tough and manly hurts us all.

If you are outraged at the possibility that the future king could perhaps be gay, but you are happy to assume your son or nephew is heterosexual, you should probably examine why that is. This not only sends out the message that being gay is wrong, but also that it is somehow an embarrassment if we have a gay King one day. Prince William appeared on the cover of Attitude magazine last year to discuss LGBT bullying, so we can only hope he will be supportive of his son regardless of his future sexuality.

Whether Prince George grows up to be heterosexual or not is completely irrelevant to why this image resonates with people like me. It is in no way homophobic to joke about this photograph if you don't see a boy being feminine as the lesser, and the vast majority of posts that I’ve seen come from a place of warmth, nostalgia and solidarity. 

What really matters is that Prince George feels supported when tackling the many obstacles that his unique life in the spotlight will present. In the meantime, we should all focus on creating a world where every person is accepted regardless of their sexual orientation or gender identity, because clearly we’ve got some way to go.