Invest in children, invest in the future

Sixty years ago this month the first universal benefits for families with children were introduced. Paid in most cases directly to the mother, from 6 August 1946 family allowances formed a key plank of the post-war welfare state.

Family allowances were worth a much needed 5 shillings for second and subsequent children, but unfortunately were not paid at all for the first child. Nevertheless, the introduction of family allowances was groundbreaking as they recognised that society should invest in and show its commitment to all our children.

In the late 1970s the Labour Government transformed them into child benefit which was now payable to almost all children and remains vital today in supporting families and protecting against poverty. However, since the early 1990s child benefit has been paid at a higher rate, currently £17.45, for the first or oldest child and a lower rate, now £11.70, for all other children.

So while celebrating sixty years of support for children, the Child Poverty Action Group believes that – with over a quarter of Britain’s children still living in poverty – it would be fitting to mark this anniversary year by increasing child benefit and paying it at the same rate for all children.

Our Make Child Benefit Count campaign is supported by more than 30 charities and trade unions including the TUC, End Child Poverty, Save the Children, Citizens Advice, Barnardo’s, the T&G, Labour Students and the Communication Workers Union. Thousands of people have already signed our online postcard to the Chancellor at www.makechildbenefitcount.org

This is not to do down tax credits which, despite well documented problems with their administration and overpayments, have provided significant extra support for many families on low-incomes. CPAG strongly believes that universal child benefit and means tested child tax credit should remain the twin foundations of our financial support for children, but further investment in child benefit is important for a number of reasons.

Firstly, child benefit is simple, straightforward and effective. It ‘follows the child’ regardless of changing family circumstances or fluctuating incomes and gets straight through to the main parent or carer. There are no means tests or complicated forms to fill in and it only has to be claimed once in each child’s lifetime.

Secondly, child benefit reaches more children living in poverty than any other benefit or tax credit. Ministers are rightly pleased that at 79 per cent the take-up rate for the new child tax credit is much higher than the old family credit but, while this rises amongst families on very low incomes, around one in ten of the most deprived still miss out. This is where child benefit, with its near universal take up rate of 98 per cent, steps in and guarantees that money gets through to the very poorest.

Critics of universalism will always argue that paying child benefit to millionaires is a waste of resources, but if you introduce a means test you might take the money away from the richest but you also run a real risk of taking it away from those who need it most.

Thirdly, child benefit represents a small contribution by society in all our children. Even at £17.45 a week child benefit only covers a fraction of the many extra costs that children bring – be it food, nappies, clothes, shoes, school trips or other things that the majority of children take for granted – but it’s an important contribution nonetheless.

It may be a cliché, but it remains true to say that children are 20 per cent of the present population but 100 per cent of our future. As Eleanor Rathbone, who fought for family allowances for over two decades and died just before they were introduced, wrote in 1940:

“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 for their welfare solely to the accident of individual income.”

Finally, paying the same rate for all children is fair. It makes no sense to pay child benefit for younger children at almost £6 less than for the oldest child. Some items purchased by parents for their first child, like cots, clothes or car seats can be handed down to younger brothers or sisters, but this isn’t a significant saving. Nor is it always desirable or even possible to pass things down from sibling to sibling. What if you have a boy followed by a girl? What if you have twins or triplets?

The present system fails to recognise that family spending on second and subsequent children is not significantly lower than for the eldest child. Hundreds of parents who have signed up to support our campaign have pointed this out, as one mother from Middlesbrough says: “I greatly appreciate and rely on child benefit to make ends meet but disagree with the way we are paid more for the oldest child. They all cost the same to feed.”

Another mum, from Bedfordshire, comments: “Having a second child stretches a family's finances much further. The added complications that childcare brings for more than one child makes returning to work harder and sometimes impossible for mothers. Unfortunately the ‘economies of scale’ theory doesn't hold water where families are concerned.”

Investing in child benefit is not a cheap policy option, but it is effective and if increases were seen as in part equivalent to a tax reduction for families they might be viewed in a different light.

Added to that, paying child benefit at the same higher rate for all children would assist larger families who are at a much greater risk of deprivation and lift 250,000 children out of poverty. Alongside other policies it would help the Government achieve its laudable ambition of halving child poverty by 2010 and eradicating it by 2020.

In this sixtieth anniversary year of universal support, the time is right to invest even further in all our children and make child benefit count.

Alex Belardinelli is press and parliamentary officer at the Child Poverty Action Group. Sign up to support the campaign at www.makechildbenefitcount.org.

Article on Make Child Benefit Count campaign published in Tribune, August 2006