Rosa Morris, Michael Orton and Kate Summers
Mark Simpson’s cogent Discover Society blog highlighted limitations in the government’s social security response to Covid-19, also begging the question of what ideas might offer a better way forward? The current crisis has both exposed the many failings in the UK social security system and seen a deluge of proposals for improvement.
Options being put forward include a Minimum Income Guarantee (New Economics Foundation), a Minimum Income Standard (Rory Maqueen) and a Liveable Income Guarantee (Open Democracy). Universal Basic Income continues to attract both support and criticism while others focus on revisions to the Universal Credit (UC) standard allowance, including the Poverty Alliance suggesting it be doubled, Joseph Rowntree Foundation saying increase it to £150 per week (£260 for couples) and the TUC also proposing the latter figure (£260) but per individual not couple.
Meanwhile the main focus of the government’s response is on the Jobs Retention and Self-Employed Income Support schemes, alongside changes to existing benefits including, making Local Housing Allowance more generous and raising the basic allowances in UC and Working Tax Credit, although only by £20.
Amidst such large-scale schemes and proposals it is easy to overlook a simple, efficient and effective way of providing immediate financial support to families: Child Benefit. Arguments in support of Child Benefit are well rehearsed with particular strengths including: recognition of the importance of every child in every household; sharing (at least some of) the costs of raising children both across an individual life cycle and between people; and its administrative simplicity.
Child Benefit also has a strong gender dimension, as it is paid to the main carer – in most cases mothers – thereby ensuring mothers have some independent income to help meet their children’s needs. There are contemporary reports of women surviving for weeks on Child Benefit as their only source of regular income (a Child Benefit timeline from 1798 to 2013 is available here, page 28).
Raising Child Benefit has thus far not been part of the government response to the Covid-19 crisis but some organisations are suggesting it. Child Benefit is currently paid at £20.70 a week for the first child, and £13.70 for subsequent children. IPPR have proposed Child Benefit be increased by £5 per week (plus a one-off payment of £30) and the Child Poverty Action Group is campaigning for an increase of £10 per week. IPPR also proposes increasing the child element of UC by £10 per week and Joseph Rowntree Foundation suggests the same, but with a figure of £12 and no increase in Child Benefit.
An analysis by Jonathan Bradshaw comparing the impact on child poverty of a Child Benefit increase of £10 compared with the £20 increase in UC, confirms the importance of the former. His finding is a £10 increase in Child Benefit would reduce child poverty by 5 percentage points compared with only 1 percentage point for the £20 on UC.
In the light of the case for an increase to Child Benefit the authors of this blog, in consultation with others, reflected on what a justifiable rise in Child Benefit might be. In short, reference was made to the Child Poverty Action Group’s work on the Cost of a Child. This shows that for 2019, Child Benefit covered less than a sixth of the cost of a child for a lone parent and barely a fifth for a couple. On this basis, a five-fold increase in Child Benefit would seem justifiable. However, account also needs to be taken of elements of other benefits specifically designated as being for the costs of children e.g. the child element in UC.
The outcome was a letter to the Chancellor of the Exchequer, signed by over 80 academics, arguing that it is proportionate for Child Benefit to be raised to £50 per child per week. The letter also argued that government would be prudent to abolish the arbitrary 2-child limit, which severely impacts on support for families. Removal of the benefit cap would be another important move, to ensure that support reaches the families that need it.
The proposal to raise Child Benefit to £50 per child per week has developed as a response to the Covid-19 crisis but it also highlights the role of Child Benefit as a long-term cornerstone of social security provision. The crisis is exposing failings in the social security system that need to be addressed. In discussing how to do so, sight should not be lost of the critical role that can be played by Child Benefit as a simple, efficient and effective way of providing financial support to families.
Rosa Morris is an independent researcher; Michael Orton is a Senior Research Fellow at the University of Warwick; and Kate Summers is an LSE Fellow in Qualitative Methodology. The authors work jointly on the Commission on Social Security led by Experts by Experience.
Image Credit: Markus Spiske