Monday, 4 October 2010

In defence of universal child benefit

George Osborne has just announced the government's intention to scrap universal child benefit and instead introduce means testing. This is from Katherine Rake's very persuasive defence of child benefit, responding to the Chancellor's announcement (I recommend reading Rake's article in full):

'It is an enormously popular benefit. You apply for it in a postnatal haze when your income has taken a massive hit and your spending needs are soaring, and it feels as though you are getting a welcome helping hand. You fill in one form and the support stays with you until your child reaches adulthood. No wonder families love it. It is also simple and it helps them with the costs of raising a child, estimated to be a staggering £200,000.

It is also cherished because it is universal. At a very low administrative cost, it reaches practically every family in the UK, sending out an unequivocal message that children are our society's future. It is one of the few things we do in the UK to make a gesture of support to every single family with a child.'

There's also a very good and well-informed piece at Left Foot Forward, which includes this:

'These cuts will be felt by families up and down the country – the loss of income is significant. But of even greater concern is the step that this cut marks towards the residualisation of the welfare state. Universal benefits are essential to the welfare state’s existence. As post-war UK welfare developed, Richard Titmuss argued in favour of universalism, maintaining that ‘services for the poor will always be poor services’.

This still holds true – as the Fabians have comprehensively shown:

“… both the coverage of welfare policy and the distributive principle underpinning it are crucial in shaping attitudes to welfare… policies with narrow coverage divide the population into groups, who may then think about their interests and identities in terms of ‘them’ and ‘us’, whereas policies with wide coverage align interests and identities so that we are ‘in this together’.”

Their research has found that welfare institutions that are focused only on the poorest do less well at reducing poverty than “broadly based systems which aim to reflect a shared sense of citizenship across society”.

This makes intuitive sense. Once middle and higher earners are completely excluded from state welfare the generosity of the system begins to deteriorate as political pressure for its maintenance reduces. This is not an argument against welfare spending on the poorest – those in the lowest income deciles already receive significantly more in welfare than those with higher incomes (and arguably should receive far higher payments) – but a strong case against the complete withdrawal of state support from those higher up the income scale.'

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