At a stroke, this government could wipe out much of the extra child poverty caused by the last government. It would be a bargain, at a cost of just £2.5bn, revealed today in the Institute for Fiscal Studies’ assessment for the next budget. Authors Anna Henry and Tom Wernham have found the two-child benefit cap added significantly to the rising numbers of children thrown into poverty since 2010. Their findings make it all the more inconceivable that Labour would not scrap the two-child limit at this month’s budget. Nothing else it could spend on would have such instant effect and long-term value. Nothing else would please Labour voters as much.
Chancellors rarely get the opportunity to do so much, so easily and relatively cheaply. How much is £2.5bn? That depends on how you look at it. Out of a total spend of over £1tn, it’s a “rounding-up error”, says Ben Zaranko, senior IFS economist. But then he adds, “it’s not trivial either”. It would be enough to resolve the legal aid crisis blocking the courts, for example. It would do much for prisons, “or for councils struggling with social care and Send crises,” he says.
Drawing up her budget, the chancellor has to weigh the imponderables of relative good done. “The language of priorities is the religion of socialism,” Nye Bevan famously proclaimed, but that doesn’t help much in deciding among them. Means-testing the winter fuel allowance saved £1.5bn: it would have been better to announce it as a direct transfer of money from mainly better-off pensioners to the poorest children.
In hard utilitarian terms, anything done for children has the greatest long-term reward. It took the Blair/Brown government 13 years to get child poverty down by around the number the Tories raised it in Labour’s promise to abolish it by 2020. Keir Starmer’s government is reprising that child poverty abolition target. The Conservatives cast an extra 730,000 children below the poverty line, all these in families with three or more children. David Cameron, justifying it, said, “Quite simply we have been encouraging working-age people to have children and not work”, despite two-thirds of those penalised being from in-work families.
Remember that Cameron was the one who promised “compassionate conservatism”, but count the ways his austerity deliberately targeted children, creating a parent penalty and rendering children the most likely to be poor. The bedroom tax cut incomes when an older child left home. (Don’t forget that early notorious case that imposed the tax on a family after the death of their 10-year-old son.) Under Cameron, childcare costs were the second highest in the OECD, costing parents a third of their income. Sure Start children’s centres to set children and families on their feet were all but demolished. Wraparound care in schools was expanding, with breakfast and after-school clubs, but many foundered as councils were stripped of funds.
The last Labour era created a warm sense of welcoming children. One emblem was the child trust funds, which gave every new baby born after September 2002 a small sum, with the poorest getting more, as a savings cushion for when they reached 18. That was instantly abolished in 2010. So was the education maintenance allowance in England, designed to help poorer children stay on in sixth form with an extra £30 a week that transformed many prospects.
The net result was a birthrate that rose under Labour, and fell under the Tories. At the same time, UK infant mortality rose for the first time in years, to reach 30% above the EU median by 2021. Child deaths rose too, by 8%.
The lack of babies was a surging topic at the recent Tory conference, usually in the spirit of blatantly racist nativism to keep up the home-born (presumed white) population. But the progressive concern came from the centre-right thinktank Onward, which rightly sees the decline in babies as a failure to create a society in which having a child does not represent a severe penalty for parents. If women had the babies they wanted, the birthrate would be 2.35, not the falling 1.49 per woman, a report by the organisation found. That’s sad. Choice to give birth is as important as the right to abortion: the abortion rate rose to a record high in the Tory years, with the British Pregnancy Advisory Service telling me of “heartbreaking stories” of women too poor to be able to keep babies they wanted.
Labour needs to recreate that sense of welcoming children again, to support them – and parents, nurseries and schools – and to celebrate their value for everyone’s future. Communities, streets and parks built around children are better, safer places for all. What national pride is there to be had in a country ranked, as the UK is for child poverty, 37th out of 39 EU and OECD countries?
Today’s IFS report says abolishing the two-child benefit cap isn’t a “magic bullet”, but it’s undoubtedly the place to start, with most effect at least cost. Abolishing the wicked total benefit cap would lift another 10,000 children above the poverty line and it would also raise the 10% of people in the direst circumstances to nearer that threshold, increasing their incomes by a third. (To see which measures do most at what cost, use this brilliant IFS calculator). It’s hard to keep remembering that 17% of the children around you are hungry. I doubt the chancellor will find any better way to spend £2.5bn than by immediately cancelling the two-child benefit cap.
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