Jon Cruddas, the head of Labour's policy review. Photograph: Getty Images.
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How Labour will strengthen family life and relationships

We are developing a whole family approach to policy making that puts equality, relationships and mutual self-help at the centre of preventing social problems.

Today, Labour’s Policy Review is running a symposium on family life and relationships. In this period of austerity, we need to support families, and use the power of their relationships and the networks they create to help strengthen people’s capacity for resilience,  care, and good neighbourliness.

We are building on the pioneering work of women in the feminist movement and the Labour Party who, along with men like the late Malcolm Wicks, redefined family policy. It was their work that established childcare as a major political issue. Women’s aspirations for work and a career were pushed onto the economic and social policy agenda. Labour argued for longer maternity leave and higher maternity pay to protect women from having to go back to work too soon.

In the symposium, Harriet Harman will set out our good record in government. Our National Childcare Strategy included Childcare Tax Credit, funds to councils for childcare and Sure Start Centres.  We doubled maternity pay and maternity leave.  We introduced paternity leave for the first time and gave a right to request flexible working for those with family responsibilities. Labour took up feminist arguments for greater equality between men and women and they resulted in major gains for women and children.

Today, families come in different shapes and sizes but they are all under pressure from the cost of living crisis and the demands of care. Many are left feeling insecure and vulnerable. At the same time, family life is changing. In 1996, 71 per cent of families with dependent children were headed by a married couple, by 2008 it was 60 per cent. The expectations of men and women are changing too. Most men no longer earn enough to fulfil the traditional male role of family breadwinner. The norm is increasingly both parents earning. A third of all mothers with dependent children - over 2 million - now earn the majority share of household income.

We need a national conversation about family life and relationships which includes both men and women. The task is first to identify the social and economic forces that stop some mothers and fathers balancing work and family life and doing what they think is best for their children. And second to devise policy where these forces are amenable to change.

Family relationships are the bedrock of society. Children need good family relationships to develop feelings of safety and belonging, and to know they are worth being loved. Family relationships are also important for economic development. Inequality in the home limits women’s access to employment and opportunities and so has a negative impact not only on their own lives, but on the increase in productivity and tax revenue we need to build a better society.

Men want fulfilling home lives and women want fulfilling working lives, but policy still pushes mothers into the home and fathers into work. Our employment practices, public services and institutional arrangements treat men, women and children as if they exist in separate silos and not as part of a whole family.  Families thrive when there is a partnership and teamwork amongst adult relations. Policy needs to use the power of relationships to help strengthen the resilience of men, women and children to withstand adversity and to facilitate their readiness to take up opportunities. The best way of preventing social problems from developing is to support social, couple and family relationships.

Poor relationships in childhood leads to poorer employment outcomes, higher levels of unhealthy behaviours such as smoking, substance abuse, and over eating, and poorer mental health. Children who suffer poor parenting have a struggle in life. We know that poor attachment or traumas in childhood such as cruelty and domestic violence does long term damage to mental health. Children who have these bad experiences can grow up struggling to cope with life’s stresses and they can find it difficult to make good relationships. Over 30 per cent of young people under 25 suffer from one or more psychiatric illnesses: 1 million children and young people are mentally ill.

This is a very high cost to pay for the failure to deal with problems early in families and in a child’s life. We need to do more to support couples, and more to strengthen the bonds between parents and also between fathers and their children. By the time British children are 16, around half no longer live with their father and a third do not see him at all. We know that those who grow up with involved fathers do better than those who do not. Boys without fathers are more likely than their peers to be involved in crime, heavy drinking and drug use. And both boys and girls are more likely to have low educational attainment and suffer low self-esteem.

This government is wasting money on reactive high-cost services because it is failing to fix social problems earlier on. In contrast, Labour is developing a whole family approach to policy making that helps to build inter-dependence that is fair and maximises the care that children receive within the family and its networks. Helping people to help themselves, not abandoning them, is the best way to reduce dependence on services provided by the state.

Prioritising relationships means taking equality seriously. We will value a father’s family role as highly as his working role, and a woman’s working role as highly as her domestic one. Fathers are good for children and shared parenting is good for mothers. We will actively encourage women into work and actively encourage the involvement of fathers in the care, education and health of their children. We will do more to tackle  violence in the home, for example, with compulsory sex and relationships education in schools. 

The Policy Review is working alongside Ed Balls and Chris Leslie and their Zero-Based Spending Review to incorporate the principle of prevention into spending on public services. Investing in prevention in this context means reforming services to unlock the potential of relationships as powerful catalysts of change, alongside professional resources. Labour’s Local Government Innovation Task Force has published its first report setting out a framework for this approach.

The excellent Troubled Families programme run by Louise Casey through local councils is pioneering work of this kind. Greater Manchester’s scheme reports significant reductions in levels of anti-social behaviour, improvements in school attendance and reductions in exclusions and a five year saving of £88.7m against costs of £62m. Nottingham Council and local MP Graham Allen have championed the early intervention approach. Shifting the focus from crisis intervention with troubled children and families to building their capacities to make good relationships and break cycles of deprivation. The voluntary sector is innovating new approaches. For example,the Home Start project runs in local authorities across the country. It matches young single parents with experienced parents from their own community for practical help, and as a source of comfort and reassurance. 

Emotional life lies at the heart of the bonds that bind a society together and policy has to be attuned to it if we are to succeed in building a better society and solving some of our more complex and intractable social problems. Labour is developing a whole family approach to policy making that puts equality, relationships and mutual self-help at the centre of preventing social problems through early intervention. The politics of One Nation begins with family, offering the world equally to daughters, and teaching sons that courage in love and relationships is a sign of a man's strength.

Jon Cruddas is Labour's policy review coordinator and MP for Dagenham

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Q&A: What are tax credits and how do they work?

All you need to know about the government's plan to cut tax credits.

What are tax credits?

Tax credits are payments made regularly by the state into bank accounts to support families with children, or those who are in low-paid jobs. There are two types of tax credit: the working tax credit and the child tax credit.

What are they for?

To redistribute income to those less able to get by, or to provide for their children, on what they earn.

Are they similar to tax relief?

No. They don’t have much to do with tax. They’re more of a welfare thing. You don’t need to be a taxpayer to receive tax credits. It’s just that, unlike other benefits, they are based on the tax year and paid via the tax office.

Who is eligible?

Anyone aged over 16 (for child tax credits) and over 25 (for working tax credits) who normally lives in the UK can apply for them, depending on their income, the hours they work, whether they have a disability, and whether they pay for childcare.

What are their circumstances?

The more you earn, the less you are likely to receive. Single claimants must work at least 16 hours a week. Let’s take a full-time worker: if you work at least 30 hours a week, you are generally eligible for working tax credits if you earn less than £13,253 a year (if you’re single and don’t have children), or less than £18,023 (jointly as part of a couple without children but working at least 30 hours a week).

And for families?

A family with children and an income below about £32,200 can claim child tax credit. It used to be that the more children you have, the more you are eligible to receive – but George Osborne in his most recent Budget has limited child tax credit to two children.

How much money do you receive?

Again, this depends on your circumstances. The basic payment for a single claimant, or a joint claim by a couple, of working tax credits is £1,940 for the tax year. You can then receive extra, depending on your circumstances. For example, single parents can receive up to an additional £2,010, on top of the basic £1,940 payment; people who work more than 30 hours a week can receive up to an extra £810; and disabled workers up to £2,970. The average award of tax credit is £6,340 per year. Child tax credit claimants get £545 per year as a flat payment, plus £2,780 per child.

How many people claim tax credits?

About 4.5m people – the vast majority of these people (around 4m) have children.

How much does it cost the taxpayer?

The estimation is that they will cost the government £30bn in April 2015/16. That’s around 14 per cent of the £220bn welfare budget, which the Tories have pledged to cut by £12bn.

Who introduced this system?

New Labour. Gordon Brown, when he was Chancellor, developed tax credits in his first term. The system as we know it was established in April 2003.

Why did they do this?

To lift working people out of poverty, and to remove the disincentives to work believed to have been inculcated by welfare. The tax credit system made it more attractive for people depending on benefits to work, and gave those in low-paid jobs a helping hand.

Did it work?

Yes. Tax credits’ biggest achievement was lifting a record number of children out of poverty since the war. The proportion of children living below the poverty line fell from 35 per cent in 1998/9 to 19 per cent in 2012/13.

So what’s the problem?

Well, it’s a bit of a weird system in that it lets companies pay wages that are too low to live on without the state supplementing them. Many also criticise tax credits for allowing the minimum wage – also brought in by New Labour – to stagnate (ie. not keep up with the rate of inflation). David Cameron has called the system of taxing low earners and then handing them some money back via tax credits a “ridiculous merry-go-round”.

Then it’s a good thing to scrap them?

It would be fine if all those low earners and families struggling to get by would be given support in place of tax credits – a living wage, for example.

And that’s why the Tories are introducing a living wage...

That’s what they call it. But it’s not. The Chancellor announced in his most recent Budget a new minimum wage of £7.20 an hour for over-25s, rising to £9 by 2020. He called this the “national living wage” – it’s not, because the current living wage (which is calculated by the Living Wage Foundation, and currently non-compulsory) is already £9.15 in London and £7.85 in the rest of the country.

Will people be better off?

No. Quite the reverse. The IFS has said this slightly higher national minimum wage will not compensate working families who will be subjected to tax credit cuts; it is arithmetically impossible. The IFS director, Paul Johnson, commented: “Unequivocally, tax credit recipients in work will be made worse off by the measures in the Budget on average.” It has been calculated that 3.2m low-paid workers will have their pay packets cut by an average of £1,350 a year.

Could the government change its policy to avoid this?

The Prime Minister and his frontbenchers have been pretty stubborn about pushing on with the plan. In spite of criticism from all angles – the IFS, campaigners, Labour, The Sun – Cameron has ruled out a review of the policy in the Autumn Statement, which is on 25 November. But there is an alternative. The chair of parliament’s Work & Pensions Select Committee and Labour MP Frank Field has proposed what he calls a “cost neutral” tweak to the tax credit cuts.

How would this alternative work?

Currently, if your income is less than £6,420, you will receive the maximum amount of tax credits. That threshold is called the gross income threshold. Field wants to introduce a second gross income threshold of £13,100 (what you earn if you work 35 hours a week on minimum wage). Those earning a salary between those two thresholds would have their tax credits reduced at a slower rate on whatever they earn above £6,420 up to £13,100. The percentage of what you earn above the basic threshold that is deducted from your tax credits is called the taper rate, and it is currently at 41 per cent. In contrast to this plan, the Tories want to halve the income threshold to £3,850 a year and increase the taper rate to 48 per cent once you hit that threshold, which basically means you lose more tax credits, faster, the more you earn.

When will the tax credit cuts come in?

They will be imposed from April next year, barring a u-turn.

Anoosh Chakelian is deputy web editor at the New Statesman.