Let us recognise a major social policy achievement of the coalition Government – the wartime coalition, of course – and its Family Allowances Act 1945.
The story of “family endowment”, as early pioneers termed it, is a multi-faceted one, in part about societal – and not just parental – responsibility, in part about feminism and the recognition of the vital role played by mothers. It is also about the emergence of a universal welfare state.
Family allowances were introduced after a long campaign led by Eleanor Rathbone, the formidable feminist, social reformer and independent MP. She built up an influential alliance of support and faced down an unholy and powerful array of forces, ranging from the Treasury, male politicians aghast at the idea that the allowance should be paid to mothers and the TUC, which feared that family allowances would interfere with wage bargaining.
Fast-forward to the late 1970s. Family allowances were amalgamated with child tax allowances after the passing of legislation introduced by Barbara Castle. But again there was controversy and conflict. Late on in the process, Jim Callaghan’s Labour Government feared that the withdrawal of child tax allowances would enrage men – the “wallet to purse” argument – and it was only after a big political fight, including the leaking of Cabinet papers, that child benefit was implemented as an income for mothers.
Viewed against this historical backcloth, two things stand out about the coalition Government’s approach to child benefit. First, whereas two formidable women – Rathbone and Castle – pushed forward reform, today women have been absent from the coalition’s decision-making. Rather, four men – David Cameron, Nick Clegg, George Osborne and Danny Alexander – intend to deny this benefit to an estimated 1.8 million mothers.
The second difference is that, while early reforms followed a process of policy deliberation and debate over several years, this coalition’s child benefit decision was a rushed afterthought in the wake of the Comprehensive Spending Review – the equivalent of a scribbled note on the back of a cigarette packet.
How speedily and casually has the coalition abandoned the principle of universalism; how careless ministers have been about the importance of child benefit as an income for mothers.
So it is timely to re-state the case for universal child benefit. First, there is the community’s interest in the upbringing of children. No one spoke more clearly about that than Eleanor Rathbone. In 1940, she said: “Children are not simply a private luxury. They are an asset to the community and the community can no longer afford to leave the provision of their welfare solely to the accident of individual income.”
Second, there is the sheer cost of bringing up a child and the need for the state to contribute to meeting that cost. No longer does a child become independent at 14, 15 or 16, when they leave school and get a job. These days, our children, given higher and further education, are dependent on their families for longer and longer.
The Liverpool Victoria Friendly Society estimates that the overall costs of a child could be as high as £200,000. We can add on to that other indirect costs when the mother, staying at home, loses her place on the career ladder, loses salary, income and occupational pension rights. Our children are very expensive and it is no coincidence that the birth rate is now below replacement level.
A third reason for child benefit is what we might call horizontal equity. The welfare state is not simply about poverty. In terms of child benefit, it is about the fact that, whatever people’s income level, if they have children, they are taking on financial responsibilities over and above those who are childless or single.
Fourth, family allowances – now child benefit – were essentially intended as an income for mothers. That is what Eleanor Rathbone was arguing for. Despite modern times and despite the rise of the dual-worker family and women’s rights, it is probably still mothers in most families who are responsible for juggling family budgets, deciding whether clothes and shoes can be afforded, how to fund school trips and treats for the children.
Let us not assume that in the 21st century income is shared equitably within the family: there are still mothers and children who receive less of a share of family resources than fathers.
The income for mothers is particularly important for those who, often pejoratively, are referred to as stay-at-home mums – women who make the judgement that, for the first few years, they want to look after their own children. Choice is very important. In future, we may well see more parents wanting to spend time with their children, especially when they are young.
A fifth reason is that child benefit, alongside other benefits, is part of the universalist spine that is crucial to a modern welfare state. Alongside free education, the National Health Service, pensions and National Insurance benefits, child benefit is universalism. It is a genuine “we’re all in this together” social policy, which we start to erode with perilous implications.
A sixth reason to defend child benefit is that it is simple, easily understood, easily administered and has a take-up close to 100 per cent. When that simplicity is eroded, complexity and inequity are the inevitable result, as ministers are beginning to understand. Hence the unfairness introduced by the new approach whereby the dual-earner family on, say, £80,000 will keep the child benefit, whereas the family with one earner above the tax threshold, on say £45,000, will lose it.
There will also be new disincentives for those who are just below the higher rate tax threshold who might think twice about earning more money with the consequent loss of child benefit for two or three children.
And how does the Government enforce a requirement on higher rate taxpayers to state that their partner receives child benefit? What happens if a couple separate? And exactly do we define cohabitation?
Child benefit is being undermined by this Tory-led coalition, which is why it is vital to restate the basic arguments. So much for the party of the family.
Malcolm Wicks is Labour MP for Croydon North. He was a minister in the Department for Work and Pensions from 2001-2005. Prior to becoming an MP, he was director of the Family Policy Studies Centre
