But the government’s decision to remove child benefit from parents with incomes over £44,000 betrays a total lack of understanding about the fundamental purpose of the welfare state.
Child benefit is the most successful benefit at reaching the poorest children – more successful than those means tested benefits specifically targeted at them. With take-up at nearly 100 per cent, it’s simple to administer and claim, and stigma free. Indeed it’s precisely because everyone gets child benefit that it works so well at reaching the poorest families.
Let’s not forget either its protective effect. Nearly anyone can find themselves hit out of the blue by the shock of unemployment, illness, accident, or relationship breakdown – child benefit provides a rock of stability through periods of crisis and change. Paid usually to the mother, it ensures that there’s always part of the household budget that’s safe for the needs of the kids. Countless mums have told me how it was a lifeline when their families were hit by disaster, no messing around trying to claim it, no complicated recalculations – the one reliable source of funds when times turned tough.
But it’s not just a safety net – it’s a platform that helps families move into work. It avoids the high marginal deduction rates, the means tests and the clawbacks of other benefits – it’s one of the best work incentives we’ve got.
Politicians have all too often seen it as an easy target, underestimating its importance in protecting families, and just as importantly, its symbolic significance in giving every family a stake in the welfare state. It’s often said that it’s the sharp elbows of the middle classes that preserve standards and investment in the NHS, or in schools – the same is true of child benefit too. Residualised benefits that go only to low-income households quickly become Cinderella benefits, under-invested in and under attack. But of course, that’s the underlying philosophy of this government – a residualised benefits system, which insists that claimants face the indignity of difference – at best a patronising, at worst a demonising, approach to the provision of welfare support.
Last time a Tory politician (John Major) tried to cut child benefit, it was Tory ladies who led the fightback. They understood how much it meant to their daughters, their granddaughters, how much its precursor family allowance had meant to them. But will the ConDem government listen this time? For if ever there was a benefit where we were ‘all in it together’ universal child benefit fits the bill. It’s time to speak out for this important benefit – let’s make the government think again.
Withdrawing Child Benefit could also damage women’s entitlement to a basic state pension. If you care for children at home, and get child benefit, your National Insurance contributions are maintained – which protect your basic state pension. If your partner is earning £45k does that mean a woman’s future state pension is no longer protected? If CB is reduced to zero, how many women will not bother to claim, not realising they are throwing away their pension rights: See also New Statesman: http://www.newstatesman.com/blogs/the-staggers/2010/10/child-benefit-state-cuts
Good point Alison. I am glad someone has picked up the side effect of this cut.
Don’t agree with a single one of your reasons for keeping CB universal – our family has an income of over £100k a year and it’s ludicrous that people on low incomes are taxed to provide a weekly payment for our children. Of course we still have a stake in the welfare state – it’s there to support us if we genuinely need help in the future. The Tories may have set the bar too low but CB for the well off is a horrible idea – don’t need it, don’t want it, better spent on others.
Basicly Cameron and his cronies have been lying through their teeth, just before the elrction My 3rd he stated quite clearly that this universal benefit would not be touched. But then again what do you expect from these people, they have not nor will rthey ever change.
totally agree with above comments – glad someone raised the link between CB and state pension via Home Responsibilities Protection (HRP). i am on a career break so have relied on this to give me state pension credits. if the link is severed, they will have to devise another costly scheme for us to apply for it, negating the cost savings of the CBN partial scrappage. Or is Home Responsibilities Protection (HRP) being withdrawn quietly too – forcing us to work to get pension?) also why should my young family with a single income of 48k, lose out over another similar family with a joint income of 80k. where is the consistency – why would they need it more that us??
Just a question, really, to MorelsGhost. Would I be right in presuming that she (or his wife) is one of the 5% eligible who don’t claim Child Benefit?
Taking away child benefits from the top 15% of earners has the same effect as a £2500 tax rise, according to Polly Toynbee in a recent article. So, given that, according the book The Spirit Level—which tries to prove, but fails spectacularly, that inequality is the cause of all social problems—isn’t the coalition doing something progressive? Won’t murder rates fall, or something like that? Or have you given up on the completely insane theory of that book?
@moreisghost You could always, um, y’know, *not* claim it if you felt that strongly about it. Or claim and give to charity. Barnardo’s, or something. It’s like those rich old folks who bang on about not needing the WFA. Use it to buy blankets for a tramp – your very own ‘charity allowance’, your chance to spend government money on a cause that you’re passionate about. Or you could just claim it, piss it away, then whinge. Up to you, dude.
Universality is not and has never been a “fundamental purpose of the welfare state”. The three key pieces of welfare state legislation enacted by the 1945-51 Labour Government were hardly universal. Both the National Insurance Act 1946 and National Assistance Act 1948 were subject to rigorous means testing, while the amendment of the National Health Service Act 1946 to include prescription charges reduced the ‘universality’ of that scheme. Ironically, the Family Allowances Act 1945, which introduced perhaps the only universal benefit, was passed by the caretaker Conservative government.
I think that preserving Child Benefit just so that we all have a stake in the welfare state is a poor excuse for spending £1bn of public money on wealthy people who have children. I think the purpose of the welfare state is to help distribute wealth and to ensure that poor people do not lose out in life because of their means and circumstances. Whilst I think we’ll never get this perfect I think that when we have a perilous financial situation, we cannot justify spending this money on ideological grounds – we need to be pragmatic and spend the money instead on lifting people out of poverty. Oh, and the Universal Credit is a great idea – offers all people the same entrance point to benefits, thus reducing stigma between the poor and the middle class.
‘all in it together’ , hardly what about how people who do not have children, why should their contributions to the welfare state be handed to ‘families’ who are better off. Arbitrary benefits to all is hardly a fair way to hand out benefits, it should be targeted towards the most needy children to lift them out of poverty.
I totally agree – not just because of these pragmatic reasons of simplicity, etc., but because the whole economic argument rests on a fallacy, as I’ve argued in detail here: http://billynojob.wordpress.com/2010/10/05/universal-unfairness/
@Ruth/Sminky We don’t claim CB as it happens, but that wasn’t really my point. While I think Billy G-J is quite right on the overall taxation picture – this has very little effect indeed on “the broadest backs” and a very deleterious and unfair one on families with four kids earning £44k a year – it still doesn’t make CB for the rich a defensible proposition. There are better ways, of course, of reducing the deficit quickly (making Vodafone pay their £6bn tax bill an obvious case in point) but arguing for universal benefits is a grave tactical mistake which is going to bolster the Tories in the long run.
Lets knock on the head this daft assertion of CB for rich paid for by poor. Poor pay taxes for the general pot and the rich pay taxes for the general pot no direct link about who pays for what and certainly not enough for poor to subsidize the rich in this way. Any way the funds released will not be taken up by reduced taxes for poor but in deficit reduction. Good media story and Cameron good at these but it is not based on truth
@Roberts Of course it isn’t based on truth, but you still need to win the argument about taxation and you won’t, and can’t, on these grounds. At the moment the progressive left is presenting the Tories a stunningly effective attack vector by arguing for something (benefits for millionaires) which the electorate considers, with great justification, to be profoundly wrong. Of course that is a simplified view of tax distribution which doesn’t reflect the reality. It doesn’t need to.