Child Benefit and welfare reform

Recent debates over welfare reform highlight some of the profound difficulties in making cuts in the way this government has approached it.  In effect, the current reforms are presented as ‘salami-slicing’ – that is, taking each programme and reducing it, taking a little off the end.  So, Child Benefit is not abolished, it is just withdrawn from those families deemed to not need it.  The approach leads to problems because they try to do it on the cheap.  To assess each family, its financial status etc, would require a whole new army of administrators and detailed criteria.  Much simpler is to say that an income over a certain level disqualifies you from receiving the benefit.  However, the injustices are, much like the Poll Tax, glaringly apparent upon the simplest of analysis, and opposition has focused upon this.

A more profound analysis might ask different questions.  Why do we have Child Benefit?  Why is it paid to all, regardless of income?  It was, historically, a tax allowance.  But this meant that the wage earner received the benefit in a reduction in income tax.  Since the wage earner was, in the past, normally the man of the house (so much of the welfare state assumed this in the 1940s and 1950s), the money didn’t always benefit the child, most of whom were cared for by women.  So, to replace the tax allowance, Child Benefit was introduced – a simple payment to all mothers of children of qualifying ages.  There is no stigma attached, it was popular with women of all political persuasions (research suggested that it was the main source of income independent of the husband for even Tory women) and it was cheap to administer.  So much of this has changed.  Can we conceive of a different system that takes into account the changes since?  Indeed, can we not think of entirely different ways to achieve the original policy objectives (what were they again), even assuming those objectives remain valid?

But policy inertia dominates.  Nothing too radical is proposed (yes, there are long term plans for a single benefit system, but that is some way off).  The opposition simply opposes.  And, in the end, we will lumber on with little real change.

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