The poisonous logic behind cuts to child benefit

Before British families bid what could be a final farewell to universal child benefit, we take a look at what is motivating Iain Duncan Smith.

Stuart Weir
29 October 2012

It is bad enough to be ruled by a government driven by market fundamentalism.  But this ideology can be contaminated and made more damaging by ignorance, a warped moralism and populist rhetoric. I am writing of course of Iain Duncan Smith, who insisted on staying in office as welfare secretary in order to press ahead with his unworkable Universal Credit scheme.  David Cameron plainly realised that disaster beckons but was too weak to remove him in the recent Cabinet re-shuffle. 

Conservative commentators claim that IDS has spent years studying poverty in this country and has become an expert on welfare reform.   To put it simply – and that is the word - he blames the victims of inequality and worklessness for their poverty and a benefit system which he believes promotes their indolent and destructive behaviour.  This is a view which fellow ministers share with him and which chimes with popular prejudice, and so with electoral advantage, but not with the complex realities of daily life.  The idea for example that a host of scroungers permanently on benefits are dragging down a nation of ‘strivers’ is totally misguided; Karen Buck MP who actually is an expert on welfare, estimates that just 1.5 per cent of people on benefits have never worked. 

Now this ignoramus has set his sights on child benefit.  Like Baldrick, he has a cunning plan.  As part of a drive to take a further £10 billion from welfare spending, he wants to make more savings by limiting the amount of child benefit and child tax credits that people with children can claim to just their first two children.  He seems to advocating a strict division between ‘working’ households and feckless households on child (and other child-related) benefit that will be impossible to operate – hasn’t he noticed that people shift between the two states? - and which would save only hundreds of millions a year at best. 

Universal child benefit is not part of the problem!  Its introduction in 1977, merging child tax allowances and the existing family allowance, was a profound and egalitarian reform and it has become the mainstay of family budgets and so family life for most families ever since.  The key to its success is that it is not means-tested and so is easily administered and goes to all households with children. This government has already begun to undermine it. Child benefit will now be tapered off after an income level of £50,000 and completely withdrawn at £60,000  – a change which itself creates confusing anomalies for the better paid.  

It is vital that people of goodwill rally to the defence of the universality of child benefit (and other universal benefits too). Sadly, the Labour party which ought to be taking a lead doesn’t seem to be making this an issue of fundamental principle and the Lib Dems are decidedly iffy.  Yet universal child benefit was fundamental to the last government’s attempts to take all children in the UK out of poverty.  Its policies were gradually, though too slowly, working. They took over a million children out of poverty and kept as many from falling into it.  This government’s cuts will already throw some 300,000 more children into poverty in the lifetime of this parliament, some two thirds of them in ‘hard working families’.  What is more, even on the government’s own bottom-line philosophy, the annual cost of child poverty to the Exchequer is £25 billion a year. It will make sense for Cameron and Osborne to reign IDS in, even if they cannot move him on.

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