Children grilling the Chancellor on television. Photo: Getty
Show Hide image

Autumn Statement: the prospect for children’s benefits looks no brighter

Since 2012, we haven’t seen a solitary reference to child poverty in any budget or Autumn Statement, and poverty rates are rising.

Today’s the day that speculation about the content of the Autumn Statement reaches its peak. Will the Chancellor announce new spending cuts in light of lower-than-expected tax receipts? Or conversely, be in the market for some pre-election giveaways? Trails apart, we don’t yet know for sure what will be in the speech at 12.30pm tomorrow. But we have a pretty good idea what won’t.

The Autumn Statement is conventionally when the government announces how it will maintain the value of benefits for the following fiscal year. But in 2014, there’s little to say on the topic. Sheltered by the terms of the triple lock, the basic state pension will automatically be uprated by average earnings, prices or a nominal 2.5 per cent, whichever is higher. This year it is the last, which gives a happy uplift to the value of pensions over and above the cost of living. In stark contrast, the value of children’s benefits is locked down, this time by a decision at Autumn Statement 2012 to uprate them at a sub-inflation 1 per cent for the following three years.

Actually, it’s even worse than that. Child benefit has suffered over the course of this parliament not just from the 2012 decision to increase it slower than inflation, but also by a three-year freeze instituted when the coalition took power. The benefit has lost over 13 per cent of its real value as a result of uprating decisions taken since 2010. But those with good memories will recall that the government provided a reason for cutting this vital and popular benefit.

As the government said at the time, “We will freeze child benefit to help fund significant above indexation increases in the child tax credit . . . This means that support will be better targeted at low-income families with children and that this budget will have no measurable impact on child poverty”.

So how has that worked in practice? In 2011, low income families did do well when the children’s element of child tax credit (CTC) was increased in line with prices, and given a further healthy boost of £180 a year. Child poverty actually went down that year. By 2012, the commitment to help low-income families was weakened: CTC was increased by inflation, but the Chancellor then reneged on his promise of a further significant increase above prices. That year, child poverty rates stayed the same. But by 2013, any idea of protecting poorer children from austerity had left the Treasury and shut the door: CTC could languish with 1 per cent uprating for the following three years along with the rest of them. Surprise, surprise: child poverty rates are now on the rise.

Academics have long pointed out that the extent to which we protect the value of children’s benefits is intimately linked with the rate of child poverty. This was something the Chancellor acknowledged in 2010, but has remained tight-lipped about ever since. In fact, since 2012 we haven’t seen a solitary reference to child poverty in any budget or Autumn Statement, nor any analysis in Treasury documents as to the poverty effects of spending decisions.  This goes beyond being simply depressing. When the government has an enduring legal duty to take action to reduce child poverty to negligible levels by 2020, it begins to look more like an act of avoidance.

Whatever next May brings, the prospect for children’s benefits looks no brighter. The Conservatives plan to freeze all support to families for another two years if returned to power; a Labour government would uprate child benefit at only 1 per cent for the same time period; and the Lib Dems have intimated that uprating decisions will be taken on an ad hoc basis as finances allow. The stable and poverty-reducing settlement the triple lock provides pensioners may be an unimaginable dream for children in the foreseeable future.

Uprating may seem tedious, but in truth it matters a lot. When children’s benefits are properly uprated, families don’t drift away from the mainstream; if their value withers away, we cut our children loose. When the Chancellor steps up to the despatch box tomorrow, we will all listen hard to every word he has to say. But spare a thought, too, for the issue on which he stays silent.

Lindsay Judge is Senior Policy and Research officer at the Child Poverty Action Group

Lindsay Judge is senior policy and research officer for the Child Poverty Action Group.

Getty
Show Hide image

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