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Time to start fixing the broken safety net that no longer catches struggling families

We are failing to ensure we look after the children of families both in and out of work.

Families on low incomes are once again bearing the brunt of a tough economic environment. Over the past decade, rising costs of items such as food, energy and childcare, combined with stagnating wages and cuts in benefits, have repeatedly put a squeeze on family budgets.

Between 2014 and 2016, some of these pressures eased, as inflation sank to zero and pay started to grow again. But now that inflation has returned, for the first time in postwar history the increasing cost of a child is being combined with a freeze in all financial support for children. The failure to uprate either benefits, tax credits or the wage levels at which tax credits are withdrawn means that inflation is bound to erode modest family incomes both in and out of work.

The gradual fall in living standards that this produces will be worsened by other benefit cuts that come in over the next few years, for different families at different times. For a start, the phasing out of the “family element” of Child Tax Credit (and its equivalent in Universal Credit) will eventually result in all low-income families getting more than £500 a year less from the state than at present.

Since this only applies to families whose oldest child was born in April 2017 or later, it hits families with the youngest children first, with the effect spreading gradually through the population. The restriction of tax credit entitlements to a maximum of two children is also being phased in, affecting only third children born from this year on, but will clobber families much more severely, with a loss of nearly £2,800 a year per child.

Some existing larger families who escape this cut have nevertheless had their income severely reduced this year (by anything up to £6,000) by the reduction in the benefit cap.

My latest report on the cost of a child, for Child Poverty Action Group, takes stock of these trends and the effects they will have on parents’ ability to provide for their families effectively. For some families in work, improved support for childcare and a higher minimum wage partially offsets the losses incurred as a result of the above cuts. But for those relying on benefits as a “safety net” when they are not working, the level of this net is being progressively lowered over time. On present policies, the support that it provides will sink below half of what families need as a minimum sometime early in the 2020s – having in contrast provided about two thirds of their requirements at the start of the present decade.

There comes a point when a “safety net” stops being worthy of its name because it is no longer enough to provide even the bare essentials of modern life. The evidence shows that when income sinks this low, most families can only escape severe material hardship either by going into debt or by getting help from extended family members.

We are about to enter a new parliamentary season, led by a government that survived by the skin of its teeth after a disgruntled electorate failed to give it the clear majority that it sought. Raising family living standards has been at the heart of the political promise to improve people’s lives. The benefits freeze alone seems to contradict this promise by creating a downward escalator for the half of families relying on some kind of means-tested benefit or tax credit, in combination with child benefit.

For those  who are “just about managing”, and particularly for others who are not managing at all, the clearest signal that Philip Hammond could give in his Autumn Budget that he is starting  to reverse the direction of that escalator would be to restore a system of benefit upratings. This would at least allow incomes to keep up with living costs, stopping things from getting systematically worse, and giving a stable foundation on which measures to improve living standards could build.

Professor Donald Hirsch is director of the Centre for Research in Social Policy at Loughborough University

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Jeremy Corbyn supporters should stop excusing Labour’s anti-immigration drift

The Labour leader is a passionate defender of migrants’ rights – Brexit shouldn’t distract the new left movement from that.

Something strange is happening on the British left – a kind of deliberate collective amnesia. During the EU referendum, the overwhelming majority of the left backed Remain.

Contrary to a common myth, both Jeremy Corbyn and the movement behind him put their weight into a campaign that argued forcefully for internationalism, migrants’ rights and regulatory protections.

And yet now, as Labour’s policy on Brexit hardens, swathes of the left appear to be embracing Lexit, and a set of arguments which they would have laughed off stage barely a year ago.

The example of free movement is glaring and obvious, but worth rehashing. When Labour went into the 2017 general election promising to end free movement with the EU, it did so with a wider election campaign whose tone was more pro-migrant than any before it.

Nonetheless, the policy itself, along with restricting migrants’ access to public funds, stood in a long tradition of Labour triangulating to the right on immigration for electorally calculated reasons. When Ed Miliband promised “tough controls on immigration”, the left rightly attacked him.  

The result of this contradiction is that those on the left who want to agree unequivocally with the leadership must find left-wing reasons for doing so. And so, activists who have spent years declaring their solidarity with migrants and calling for a borderless world can now be found contemplating ways for the biggest expansion of border controls in recent British history – which is what the end of free movement would mean – to seem progressive, or like an opportunity.

The idea that giving ground to migrant-bashing narratives or being harsher on Poles might make life easier for non-EU migrants was rightly dismissed by most left-wing activists during the referendum.

Now, some are going quiet or altering course.

On the Single Market, too, neo-Lexit is making a comeback. Having argued passionately in favour of membership, both the Labour leadership and a wider layer of its supporters now argue – to some extent or another – that only by leaving the Single Market could Labour implement a manifesto.

This is simply wrong: there is very little in Labour’s manifesto that does not have an already-existing precedent in continental Europe. In fact, the levers of the EU are a key tool for clamping down on the power of big capital.

In recent speeches, Corbyn has spoken about the Posted Workers’ Directive – but this accounts for about 0.17 per cent of the workforce, and is about to be radically reformed by the European Parliament.

The dangers of this position are serious. If Labour’s leadership takes the path of least resistance on immigration policy and international integration, and its support base rationalises these compromises uncritically, then the logic of the Brexit vote – its borders, its affirmation of anti-migrant narratives, its rising nationalist sentiment – will be mainlined into Labour Party policy.

Socialism in One Country and a return to the nation state cannot work for the left, but they are being championed by the neo-Lexiteers. In one widely shared blogpost on Novara Media, one commentator even goes as far as alluding to Britain’s Road to Socialism – the official programme of the orthodox Communist Party.

The muted and supportive reaction of Labour’s left to the leadership’s compromises on migration and Brexit owes much to the inept positioning of the Labour right. Centrists may gain personal profile and factional capital when the weaponising the issue, but the consequences have been dire.

Around 80 per cent of Labour members still want a second referendum, and making himself the “stop Brexit” candidate could in a parallel universe have been Owen Smith’s path to victory in the second leadership election.

But it meant that in the summer of 2016, when the mass base of Corbynism hardened its factional resolve, it did so under siege not just from rebelling MPs, but from the “Remoaners” as well.

At every juncture, the strategy of the centrist Labour and media establishment has made Brexit more likely. Every time a veteran of the New Labour era – many of whom have appalling records on, for instance, migrants’ rights – tells Labour members to fight Brexit, party members run a mile.

If Tony Blair’s messiah complex was accurate, he would have saved us all a long time ago – by shutting up and going away. The atmosphere of subterfuge and siege from MPs and the liberal press has, by necessity, created a culture of loyalty and intellectual conformity on the left.

But with its position in the party unassailable, and a radical Labour government within touching distance of Downing Street, the last thing the Labour leadership now needs is a wave of Corbynite loyalty-hipsters hailing its every word.

As the history of every attempt to form a radical government shows, what we desperately need is a movement with its own internal democratic life, and an activist army that can push its leaders as well as deliver leaflets for them.

Lexit is no more possible now than it was during the EU referendum, and the support base of the Labour left and the wider party is overwhelmingly in favour of free movement and EU membership.

Jeremy Corbyn, John McDonnell and Diane Abbott are passionate, principled advocates for migrants’ rights and internationalism. By showing leadership, Labour can once again change what is electorally possible.