The state can't afford to cut back family support

Children are not a private luxury but the future workers and taxpayers of this country. Labour should pledge to reverse the fall in the value of child benefit.

The dog days are upon us and like most parents, I’m scrabbling around for childcare and searching for affordable activities for my child. The summer holidays cost – but as new research published by the Child Poverty Action Group (CPAG) and the Joseph Rowntree Foundation (JRF) shows, an ice cream here and play scheme there is just the beginning of it.

Cost of a Child in 2013 documents the minimum income required to bring up a child in the UK today. It draws on JRF’s on-going work, which regularly asks members of the public which items they think we should all be able to afford. What emerges from this exercise is a consensus that families need enough to cover the bare essentials such as food and shelter, but also require a modest amount to enable them to participate in normal social activities too.

The numbers are enough to make anyone sit up and think: the research estimates the minimum acceptable cost of a child over 18 years is £81,722 for couple, and £90,980 for a single parent. (The figure for single parents is higher due to the fact that there is only one adult in the family to offset some of the children’s costs by reducing their own). Add in childcare costs and the numbers increase still further - to £148,105 for couples and a staggering £161,260 for single parents, over the 18-year period.

The figures illuminate why families with children are generally at a higher risk of poverty than other groups in society: costs sky-rocket when we have children yet our earning power is compromised by childcare responsibilities. In recognition of this, the state helps us smooth our incomes over the course of our lifetime through the provision of child benefit and, for lower-income families, child tax credits too.

But as the report documents, both these sources of support have diminished considerably in recent years. Child benefit was frozen in 2010 and has consequently lost one-seventh of its value; tax credits look set to wither away in a similar manner as they are uprated at a mere 1% over the next three years.

With earnings lagging behind costs as well, it’s not surprising that a couple with two children working full-time on the minimum wage today net only 83 per cent of the minimum income they require. While the same couple can just about reach an adequate standard of living on the median wage – our national mid-point - a single parent family in the same situation is still almost 10 per cent shy of a decent standard of living.

There’s a question, of course, as to how much the state should help parents with the costs of their children. But children are not a private luxury as some current political debates like to suggest. Instead, they are the future workers and taxpayers of this country and supporting families with their children’s costs is more accurately seen as an investment, not the deadweight cost it is often presented as.

Labour has indicated that restoring child benefit to higher earners would not be a priority if it were in power but has remained silent on whether it would seek to restore the benefit’s real value to its 2010 level. Meanwhile, the coalition is proposing to pay childcare costs to families earning up to £300,000 between them, while through universal credit it will compensate only those earning more than £10,000. And the Conservatives are set to unveil plans later this year to introduce a married couple's tax allowance. But as far as I know, once the wedding is over, married couples don’t have any additional costs, so it is hard to see any rationale for it.

Meanwhile, think tanks such as IPPR have gone on record numerous times to suggest that child benefit be frozen for a decade and the money redeployed to pay for additional childcare support. The Cost of a Child report shows what a self-defeating strategy that would be: subsidising childcare by cutting child benefit is giving with one hand while taking away with the other. As we move towards the 'living standards election' of 2015, all parties need to think harder about how we re-commit to all our children - as we did after the Second World War through universal family allowances – we need to find more funds and better ways to help families at all income levels, working or not working, with the costs of a child.   

Washing hangs out to dry above children's bikes on the balcony of a residential development in the London borough of Tower Hamlets. Photograph: Getty Images.

Alison Garnham is chief executive of the Child Poverty Action Group

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Find the EU renegotiation demands dull? Me too – but they are important

It's an old trick: smother anything in enough jargon and you can avoid being held accountable for it.

I don’t know about you, but I found the details of Britain’s European Union renegotiation demands quite hard to read. Literally. My eye kept gliding past them, in an endless quest for something more interesting in the paragraph ahead. It was as if the word “subsidiarity” had been smeared in grease. I haven’t felt tedium quite like this since I read The Lord of the Rings and found I slid straight past anything written in italics, reasoning that it was probably another interminable Elvish poem. (“The wind was in his flowing hair/The foam about him shone;/Afar they saw him strong and fair/Go riding like a swan.”)

Anyone who writes about politics encounters this; I call it Subclause Syndrome. Smother anything in enough jargon, whirr enough footnotes into the air, and you have a very effective shield for protecting yourself from accountability – better even than gutting the Freedom of Information laws, although the government seems quite keen on that, too. No wonder so much of our political conversation ends up being about personality: if we can’t hope to master all the technicalities, the next best thing is to trust the person to whom we have delegated that job.

Anyway, after 15 cups of coffee, three ice-bucket challenges and a bottle of poppers I borrowed from a Tory MP, I finally made it through. I didn’t feel much more enlightened, though, because there were notable omissions – no mention, thankfully, of rolling back employment protections – and elsewhere there was a touching faith in the power of adding “language” to official documents.

One thing did stand out, however. For months, we have been told that it is a terrible problem that migrants from Europe are sending child benefit to their families back home. In future, the amount that can be claimed will start at zero and it will reach full whack only after four years of working in Britain. Even better, to reduce the alleged “pull factor” of our generous in-work benefits regime, the child benefit rate will be paid on a ratio calculated according to average wages in the home country.

What a waste of time. At the moment, only £30m in child benefit is sent out of the country each year: quite a large sum if you’re doing a whip round for a retirement gift for a colleague, but basically a rounding error in the Department for Work and Pensions budget.

Only 20,000 workers, and 34,000 children, are involved. And yet, apparently, this makes it worth introducing 28 different rates of child benefit to be administered by the DWP. We are given to understand that Iain Duncan Smith thinks this is barmy – and this is a man optimistic enough about his department’s computer systems to predict in 2013 that 4.46 million people would be claiming Universal Credit by now*.

David Cameron’s renegotiation package was comprised exclusively of what Doctor Who fans call handwavium – a magic substance with no obvious physical attributes, which nonetheless helpfully advances the plot. In this case, the renegotiation covers up the fact that the Prime Minister always wanted to argue to stay in Europe, but needed a handy fig leaf to do so.

Brace yourself for a sentence you might not read again in the New Statesman, but this makes me feel sorry for Chris Grayling. He and other Outers in the cabinet have to wait at least two weeks for Cameron to get the demands signed off; all the while, Cameron can subtly make the case for staying in Europe, while they are bound to keep quiet because of collective responsibility.

When that stricture lifts, the high-ranking Eurosceptics will at last be free to make the case they have been sitting on for years. I have three strong beliefs about what will happen next. First, that everyone confidently predicting a paralysing civil war in the Tory ranks is doing so more in hope than expectation. Some on the left feel that if Labour is going to be divided over Trident, it is only fair that the Tories be split down the middle, too. They forget that power, and patronage, are strong solvents: there has already been much muttering about low-level blackmail from the high command, with MPs warned about the dire influence of disloyalty on their career prospects.

Second, the Europe campaign will feature large doses of both sides solemnly advising the other that they need to make “a positive case”. This will be roundly ignored. The Remain team will run a fear campaign based on job losses, access to the single market and “losing our seat at the table”; Leave will run a fear campaign based on the steady advance of whatever collective noun for migrants sounds just the right side of racist. (Current favourite: “hordes”.)

Third, the number of Britons making a decision based on a complete understanding of the renegotiation, and the future terms of our membership, will be vanishingly small. It is simply impossible to read about subsidiarity for more than an hour without lapsing into a coma.

Yet, funnily enough, this isn’t necessarily a bad thing. Just as the absurd complexity of policy frees us to talk instead about character, so the onset of Subclause Syndrome in the EU debate will allow us to ask ourselves a more profound, defining question: what kind of country do we want Britain to be? Polling suggests that very few of us see ourselves as “European” rather than Scottish, or British, but are we a country that feels open and looks outwards, or one that thinks this is the best it’s going to get, and we need to protect what we have? That’s more vital than any subclause. l

* For those of you keeping score at home, Universal Credit is now allegedly going to be implemented by 2021. Incidentally, George Osborne has recently discovered that it’s a great source of handwavium; tax credit cuts have been postponed because UC will render such huge savings that they aren’t needed.

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.

This article first appeared in the 11 February 2016 issue of the New Statesman, The legacy of Europe's worst battle