Why Cameron has rejected Nadhim Zahawai's child benefit plan

The Tory MP's plan to limit all child-related benefits to two children would undermine the 'striver'/'scrounger' divide by hitting all families, regardless of their employment status.

Earlier this week, George Osborne vowed to cut "billions" more from welfare if the Tories win the next election. In an op-ed in today's Mail on Sunday, Conservative MP Nadhim Zahawi suggests one way he could do so. The No. 10 policy board member calls for the government to limit all "child-related welfare" to "the first two children". Here's the key passage:

This would include Child Benefit and Child Tax Credit but would exclude disability payments.

It would apply to all households, both in and out of work, and only to new births after the change became law. Capping welfare at two children may seem tough, but setting the cap at three simply wouldn’t deliver the savings we need.

At first sight, this might merely appear to be a restatement of the proposal previously floated by Iain Duncan Smith. The Work and Pensions Secretary said in September 2012: "My view is that if you did this you would start it for those who begin to have more than say two children. Essentially it's about the amount of money that you pay to support how many children, and what is clear to the general public, that they make decisions based on what they can afford for the number of children they have. That is the nature of what we all do."

But there are several key differences with the Duncan Smith plan, which was vetoed by the Lib Dems before the 2012 Autumn Statement. The first is that Zahawi's cap would apply to all child-related benefits, rather than child benefit alone. The second is that it would apply to all families, rather than just those claiming out-of-work benefits. It's the latter point that explains why No. 10 has been quick to stamp on the idea, with a source commenting: "this is not government policy and is not supported by the prime minister."

Were the Tories to limit child-related benefits for all families, regardless of their employment status, it would undermine the 'striver'/'scrounger' divide they have worked so hard to create. As Grant Shapps said of the Duncan Smith plan earlier this year: "A lot of people worry that the way welfare operated under the last government meant claimants were free from taking the difficult decisions you would take if you are in work – none more starkly obvious than when you have children.

"If you are a working family and you have another child, you know it’s going to mean quite a severe impact on your living costs. Yet in the welfare system, it’s almost turned on its head, so additional children are actually recognised, with no limit. We need to create a choice for people on welfare which mirrors that which millions of people in work who aren’t receiving state support have to make. It’s only fair to the taxpayer."

This, of course, is nonsense. There is no evidence that significant numbers of families have more children merely to claim benefits and nor is it clear why it would be a less "difficult decision" for them to do so (unlike in-work families, they cannot draw on private salaries as well as social security). But Shapps rightly believes there is a ready audience for his rhetoric.

While the Duncan Smith proposal would help to reinforce the artificial divide created between "working" and "workless" families (owing to the insecure labour market, many cycle in and out of work), the Zahawi plan would undermine it. For that reason, while the former idea will almost certainly appear in the next Tory manifesto, the latter will not.

David Cameron talks during a PM Direct event at the Tetley Tea factory in Darlington on December 13, 2013. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Cabinet audit: what does the appointment of Andrea Leadsom as Environment Secretary mean for policy?

The political and policy-based implications of the new Secretary of State for Environment, Food and Rural Affairs.

A little over a week into Andrea Leadsom’s new role as Secretary of State for Environment, Food and Rural Affairs (Defra), and senior industry figures are already questioning her credentials. A growing list of campaigners have called for her resignation, and even the Cabinet Office implied that her department's responsibilities will be downgraded.

So far, so bad.

The appointment would appear to be something of a consolation prize, coming just days after Leadsom pulled out of the Conservative leadership race and allowed Theresa May to enter No 10 unopposed.

Yet while Leadsom may have been able to twist the truth on her CV in the City, no amount of tampering will improve the agriculture-related side to her record: one barely exists. In fact, recent statements made on the subject have only added to her reputation for vacuous opinion: “It would make so much more sense if those with the big fields do the sheep, and those with the hill farms do the butterflies,” she told an audience assembled for a referendum debate. No matter the livelihoods of thousands of the UK’s hilltop sheep farmers, then? No need for butterflies outside of national parks?

Normally such a lack of experience is unsurprising. The department has gained a reputation as something of a ministerial backwater; a useful place to send problematic colleagues for some sobering time-out.

But these are not normal times.

As Brexit negotiations unfold, Defra will be central to establishing new, domestic policies for UK food and farming; sectors worth around £108bn to the economy and responsible for employing one in eight of the population.

In this context, Leadsom’s appointment seems, at best, a misguided attempt to make the architects of Brexit either live up to their promises or be seen to fail in the attempt.

At worst, May might actually think she is a good fit for the job. Leadsom’s one, water-tight credential – her commitment to opposing restraints on industry – certainly has its upsides for a Prime Minister in need of an alternative to the EU’s Common Agricultural Policy (CAP); a policy responsible for around 40 per cent the entire EU budget.

Why not leave such a daunting task in the hands of someone with an instinct for “abolishing” subsidies  thus freeing up money to spend elsewhere?

As with most things to do with the EU, CAP has some major cons and some equally compelling pros. Take the fact that 80 per cent of CAP aid is paid out to the richest 25 per cent of farmers (most of whom are either landed gentry or vast, industrialised, mega-farmers). But then offset this against the provision of vital lifelines for some of the UK’s most conscientious, local and insecure of food producers.

The NFU told the New Statesman that there are many issues in need of urgent attention; from an improved Basic Payment Scheme, to guarantees for agri-environment funding, and a commitment to the 25-year TB eradication strategy. But that they also hope, above all, “that Mrs Leadsom will champion British food and farming. Our industry has a great story to tell”.

The construction of a new domestic agricultural policy is a once-in-a-generation opportunity for Britain to truly decide where its priorities for food and environment lie, as well as to which kind of farmers (as well as which countries) it wants to delegate their delivery.

In the context of so much uncertainty and such great opportunity, Leadsom has a tough job ahead of her. And no amount of “speaking as a mother” will change that.

India Bourke is the New Statesman's editorial assistant.