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15 May 2013

On child poverty, choosing services over benefits is a progressive dead end

Labour must prioritise investment in universal childcare alongside income support, rather than simply trading one off against the other.

By Alison Garnham

Are investments in services a better way of reducing child poverty than benefits that support income? ‘Yes’ argued IPPR director Nick Pearce this week when he called on Labour to find a new way to tackle child poverty that doesn’t rely on cash transfers, but instead builds institutions that attract popular support and can’t be dismantled at whim.

Much of what Nick says, as you would expect, makes good sense. Most would agree that a child poverty strategy that relies solely on benefits to prop up families’ incomes is neither effective nor sustainable. But equally, a strategy that regards children’s centres and expanded childcare as the only answer to the child poverty problem is also likely to be ineffectual.

The UK and the international evidence suggests that choosing services over benefits is a false choice and a progressive dead end.

Labour’s commitment to end child poverty drove action to (i) make work pay (ii) invest in childcare and early years services, and (iii) boost the incomes of families with children using the tax and benefits system. As a result, between the mid-1990s and 2008 the UK had the largest reduction in child poverty in the OECD. This unprecedented success was because a broad approach was pursued, not because the child poverty strategy was reduced to a simplistic choice of benefits over services. 

It is right to point out that those countries with low child poverty rates generally have higher rates of parental employment than the UK, but they certainly don’t achieve this at the expense of family benefits. OECD data shows that the Nordic countries all provide children’s benefits at broadly the same level as the UK and also provide other, more generous, benefits to families. The difference between us and them is that they prioritise investment in universal childcare alongside income support rather than simply trading one off against the other.

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The spending switch we need to make is from spending billions dealing with the costs of child poverty to investing in preventing child poverty in the first place.

This is not about making tough choices as we pitch progressive ideas  – ‘childcare vs. child benefit’ – against each other. It’s actually more ambitious and urgent than that. Instead, it is a big decision to get the fundamentals rights –  to make our society fairer and our economy stronger –  which requires us to rethink public spending across the whole of government.

We know that without widespread public support, even policies proven to reduce child poverty are at the mercy of, sometimes unforgiving, political and economic forces.

Yet the appropriate response to evidence of declining public support, such as the analysis of existing polling published by Joseph Rowntree Foundation this week, is surely not just to build popular institutions but to also build a popular consensus around poverty reduction that can weather the bad times as well as good.

As others have noted, it is simply not correct to conceive attitudes as something solid and immovable.  We know polls show that the public regard the welfare state as one of the country’s finest achievements and, in future, there’s good reason to believe that rising living costs and falling living standards will be an important election battleground issue.

It’s worth bearing in mind that the policies that will make a difference to poverty  – investment in child benefit, affordable housing, childcare and decent jobs – are likely to be popular. Politicians may just find that showing leadership and championing policies that tackle poverty may have electoral as well as child poverty pay offs, too.