Children play outside an estate in Govan, Glasgow.Photo: Getty Images
Show Hide image

Good news for families? The costs of the Conservatives are higher than you think

Children have been the biggest losers over the last five years - and as a new report shows, there is more to come.

“Good news for family budgets” is how the Chancellor welcomed this week’s (negative) inflation figures, but the pinch parents have been feeling in the pocket can’t just be put down to rising prices. It’s also about how we’ve been short-changing our children.

In recent years, the support that families receive to help cover the extra costs of children (the cost of meeting the basic needs of a child are £164 a week) has diminished in value. For some, it has evaporated altogether: higher earning parents lost their child benefit in 2012. For the remaining 4.1 million families who are eligible, the value of children’s benefits has been slowly but surely eroded by year after year of freezes (child benefit) and under-inflation uprating (child tax credit).

Losing a pound here and a penny there is something most of us don’t immediately notice, but over time, it does add up. Remember the year-on-year damage wreaked on the basic state pension when the link with earnings was broken in 1980?

New research published today ‘Short-changed: The true cost of cuts to children’s benefits’ by Child Poverty Action Group and other members of the End Child Poverty coalition shows that a typical working family will lose £513 this year alone as a result of the decisions made in the last parliament to uprate children’s benefits below inflation. For many, this can make a genuine difference: being able to send your child on a school trip, for example, heat your home and even eat properly. The research found that over 2 million children live in families who have had to cut back on food or heating their home as a result of the falling value of children’s benefits.

The way that children’s benefits have been uprated stands in stark contrast to the treatment that pensioners have received in recent years. The Coalition Government didn’t just restore the link with earnings, it gave the basic state pension ‘triple lock’ protection (pensions would be uprated by prices, earnings or 2.5%, whichever is higher)  in a move attracting widespread support and seen by many as an important way to maintain income and reduce pensioner poverty over time.

 With children twice as likely to be poor as pensioners, why is there no triple lock for children? The glib answer is that children don’t vote, but it’s more than that.

Anyone familiar with online comment threads will be aware that a small minority of people see children as a private luxury rather than a public good: “If you can’t feed ‘em, don’t breed ‘em” may be an unpalatable way of putting it, but deep down some seem to share the view that if you have children you should carry all the costs yourself. By that measure, having  children would soon become the preserve of only the rich.  Surely no one wants that.

It can’t just be cost either – the Chancellor has spent billions on raising the personal tax allowance, with most of the money going to people higher up in the income distribution. (Surprised? Thought this policy is all about lifting the low paid out of tax? Read page 13 of this IFS note – the low paid either don’t benefit at all or benefit least because the benefit system claws back much of the gain.)

Thankfully, most of us recognise that we have both individual and collective responsibility for children. Most people consider it important to reduce child poverty, with eight in ten seeing this as very much a responsibility of the state.  Likewise, recent polling as shown that only one in ten parents in the UK thinks that children’s benefits should continue to be increased below inflation. Investing in children makes sense to most, appealing as it does to the head (children are Britain’s future workers and tax-payers) and the heart (children are not responsible for their own economic well-being).

Last year, Iain Duncan Smith claimed he was on track to end child poverty by 2020, but most see the target getting ever further out of reach.  Our analysis is that a triple lock for children’s benefits would result in more than a quarter of a million fewer children living in poverty by 2020. That’s more children lifted out of poverty than the Government claims its flagship Universal Credit policy will eventually deliver.

It’s time we stopped short-changing our children.  

 

Lindsay Judge works for the Child Poverty Action Group. Short Changed: The True Cost of Cuts to Children’s Benefits can be read here.

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

Getty
Show Hide image

How Theresa May laid a trap for herself on the immigration target

When Home Secretary, she insisted on keeping foreign students in the figures – causing a headache for herself today.

When Home Secretary, Theresa May insisted that foreign students should continue to be counted in the overall immigration figures. Some cabinet colleagues, including then Business Secretary Vince Cable and Chancellor George Osborne wanted to reverse this. It was economically illiterate. Current ministers, like the Foreign Secretary Boris Johnson, Chancellor Philip Hammond and Home Secretary Amber Rudd, also want foreign students exempted from the total.

David Cameron’s government aimed to cut immigration figures – including overseas students in that aim meant trying to limit one of the UK’s crucial financial resources. They are worth £25bn to the UK economy, and their fees make up 14 per cent of total university income. And the impact is not just financial – welcoming foreign students is diplomatically and culturally key to Britain’s reputation and its relationship with the rest of the world too. Even more important now Brexit is on its way.

But they stayed in the figures – a situation that, along with counterproductive visa restrictions also introduced by May’s old department, put a lot of foreign students off studying here. For example, there has been a 44 per cent decrease in the number of Indian students coming to Britain to study in the last five years.

Now May’s stubbornness on the migration figures appears to have caught up with her. The Times has revealed that the Prime Minister is ready to “soften her longstanding opposition to taking foreign students out of immigration totals”. It reports that she will offer to change the way the numbers are calculated.

Why the u-turn? No 10 says the concession is to ensure the Higher and Research Bill, key university legislation, can pass due to a Lords amendment urging the government not to count students as “long-term migrants” for “public policy purposes”.

But it will also be a factor in May’s manifesto pledge (and continuation of Cameron’s promise) to cut immigration to the “tens of thousands”. Until today, ministers had been unclear about whether this would be in the manifesto.

Now her u-turn on student figures is being seized upon by opposition parties as “massaging” the migration figures to meet her target. An accusation for which May only has herself, and her steadfast politicising of immigration, to blame.

Anoosh Chakelian is senior writer at the New Statesman.

0800 7318496