Thursday, 14 October 2010

The Child Benefit Conundrum

Economic recessions have the consequence of pressuring governments into implementing austerity measures that sometimes produce contradictory results. This has clearly been the case for Chancellor George Osborne in the proposed measures to end child benefit after 2013 for families in which at least 1 earner pays 40% tax. The proposed measure has had the unforeseen effect of having some families with joint incomes way above the threshold remaining legally entitled to the benefit, whilst other families with only one salary above the threshold loosing the benefit. The Coalition Government will undoubtedly tinker with the proposed measure to make its effects less contradictory, but what is really at stake is the principle of universality.

Social benefits are intended to alleviate poverty and to soften the sharp edges of capitalism. Making some social benefits universal makes sure that all people get them. It is a simple way of ensuring that all mothers receive financial support without the hassle of forms and means-testing which may be overly complicated and inefficient. In the case of child benefit, this support costs the tax payer £11 billion a year and has been taken up by practically every mother in the UK.

Although some might suggest that the principle of universality is irrelevant in a financial crisis, I think exactly the opposite. Universal benefits send a very clear measure of what is valued within a society. In this case, a universal child benefit states that we are valuing our children, our future. It also states that we value the choice that families might make in deciding whether one family member can afford to stay at home to look after the children. Since it costs close to £200,000 to bring up a child parents must not be penalised by opting to remain at home to raise their children. Finally an attack on the universality of child benefits changes the concept of what we have been entitled to as citizens and residents of this country since WWII. This should not be done just as a cost-cutting measure and without due consultation.

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