Child benefit: fit for the future
60 years of support for children

One: Introduction

“Child benefit remains the fairest, the most efficient and the most cost-effective way of recognising the extra costs and responsibilities borne by all parents.”
Rt Hon Gordon Brown MP, Chancellor of the Exchequer, Budget speech, March 1998

“The Government believes it is right that society should recognise the importance of family life by providing financial support for every family with a dependent child.”
HM Treasury, Tax Credits: reforming financial support for families, 2005, para 6.2

“It is right that families with children at all income levels should receive some recognition for the additional costs of bringing up children and that the tax/benefit system should allow for some general redistribution of resources from those without children to those who have the responsibility of caring for them.”
Department of Health and Social Security Green Paper, Reform of Social Security, HMSO, 1985, p48

August 2006 sees the sixtieth anniversary of family allowances – the predecessor of child benefit. Beveridge, whose report in 1942 laid the basis of the post-war welfare state in the UK, saw family allowances as an essential building block for his scheme to work. Frank Field MP, a former director of the Child Poverty Action Group (CPAG), has described the significance of the Family Allowances Act:

“The living standards of children were to some extent to be decided upon by the nation as a whole, not solely by the capriciousness of the market.”1

CPAG came into being in part to fight for an increase in family allowances. And it has subsequently had a long association with child benefit, having championed its introduction in the late 1970s to replace family allowances and child tax allowances as a fairer system of support for children.

So this report, written for CPAG, focuses on child benefit: its rationale, its history and its multiple functions. It sets out the case for investing more resources in it, to rebalance the system of financial support for children in the UK towards more emphasis on child benefit. And it explores ways of doing this which would also rebalance the current structure of child benefit towards more support for larger families. It has been written now in part because of the sixtieth anniversary of universal benefits for children, given without regard to their parents’ circumstances – some thirty years of family allowances, and some thirty years of child benefit – and in addition so that its arguments can feed into the forthcoming public expenditure round and contribute to the Government’s thinking about child poverty.

Note
1 F Field, ‘A Family Legacy’, the Guardian, 7 February 1996

Child benefit: fit for the future: CPAG policy briefing

Contents page
Executive summary
1: Introduction
2: Background
3: The importance of child benefit
4: The history of child benefit: key issues and challenges
5: The value of child benefit over time
6: Policy options
7: Conclusions
Appendix

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