This essay will analyse the child benefit scheme from both a historical and political perspective in which it will examine the debates on child benefit in the 1970’s when the scheme was first introduced and compare them to the current debates and reforms the coalition government have proposed to introduce.
The child benefit scheme was fully introduced in 1977 through the Child Benefit Act 1975 proposed by the Labour government coming from a socialist perspective. Child benefit merged Family Allowances, which were paid to those with more than one child, and Child Tax Allowances into one single payment. These were both previous welfare benefits specifically for children. Child benefit is a universal, tax free benefit paid to all children in the household. It did not exclude those on higher incomes or was any different for single parent families as it was paid to every child (Greener & Cracknell, 1998). Child benefit was a recognition by government that there are extra costs when parents have children. Child benefits have been increased by the successive governments over the years in relation to inflation and the needs of children and families. It is regarded as a positive benefit, helping relieve child poverty and social exclusion. It is recognised as a fair and worthy way of spending public money and an investment for the future (Greener & Cracknell, 1998).
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There were a number of positive and negative arguments for and against the introduction of child benefit. One of the main causes for an improved system of child support was the rising levels of child poverty in Britain in the 1960’s and 1970’s (Hendrick, 2008). Child Benefit was seen as a way of protecting and preventing a child against poverty (Bennett & Dornan, 2006). Poverty had increased as of the deprivation caused by the likes of inflation and the rise in food prices (McCarthy, 1983). There were a number of reports highlighting the decline in living standards of children such as those by 1960’s scholars Margaret Wynn and Della Nevitt questioning whether support for children in the 1960’s matched the needs of children (Field, 1982). Further, the social researcher Richard Titmuss expressed that child support in Britain was badly designed and had to be improved as only those with more than one child received Family allowances (Field, 1982). Additionally a report on Circumstances of Families (1966) presented to us that half a million families who have one and a quarter children live on or below the official poverty line (Field, 1982). Therefore these reports show that child poverty was an ongoing issue at the time and a valid reason as to why a new child policy such as child benefit would be a beneficial action for children’s future. It provides a form of stability as it does not depend on income (Bennett & Dornan, 2006).
The Child Poverty Action Group (CPAG) were highly influential in the introduction of Child Benefit. They campaigned for the protection of children since their establishment in 1965. The CPAG’s main aim was to persuade Harold Wilson’s Labour government to increase Family Allowances and therefore brought child benefit into the public eye (Field, 1982). When it came to the child benefit campaign The CPAG had been claimed as the ‘main stimulus’ for its introduction (Field, 1982). They even used threats to the government to demand better welfare for children. They were a Group who represented the poor, acting as an agent of those in poverty. Their purpose was to help poor families and not only focus on changing the structures in society (Field, 1982). CPAG campaigners tried to convince poor people that it was not their fault they were in poverty but was structures within society that did not fairly redistribute resources (Field, 1982). According to Field (1982) the Group had strong support for an appropriate form of child support to be put in place as they believe it was needed to eradicate child poverty. The Group recognised raising a child costs more money and sharing the cost through the redistribution of income was thought to be the best way of improving children’s welfare (McCarthy, 1983). Therefore looking at the political issues in the history of child benefits are important to examine the evolution of child benefit. The CPAG’s influence in child benefit shows the large impact pressure groups can have on political issues and how they raise public awareness. McCarthy (1983) also claims if the CPAG had not became involved in the cause the issue may not have been discussed at all. It also shows that government are not the only protagonists in the policy process as the Group had such a peripheral role on child benefit.
Trade Unions also had a large contribution to the introduction of child benefit and supported the change from wallet to purse. The TUC/Labour party committee in the early 1970’s stated the benefit scheme must tackle the problem of poverty and provide enough to do this (McCarthy, 1983). According to the CPAG policy briefing (Bennett & Dornan. 2006) the scheme was going to cost too much money and the Labour government claimed the benefits introduction would be postponed as of administrative and legislative problems. In May 1976 suspicions grew that the Labour government was abandoning the scheme as they introduced the Child Interim Benefit to single parents which was thought to be a temporary provision until the government had enough funds to fully introduce child benefit (McCarthy, 1983). It has been claimed the shelving of child benefit could have been due to James Callaghan succeeding as Prime Minister from Harold Wilson. According to Field (1982) Callaghan did not support an increase in family allowances in the 1960’s. Callaghan believed the public were against the benefit scheme as it meant a decrease in take home pay for men (Field, 1982). The Cabinet leaks by the CPAG however seemed to have one of the largest impacts on the child benefit scheme as it revived the political debates on child benefits. It revealed that the TUC had reacted badly to the fact that child benefit implementation would reduce take home pay for men and they therefore became completely against its introduction despite the fact child benefit would bring income back up again (Field, 1982). The Labour government decided to abolish the scheme and were reluctant to go against the TUC. Therefore the lead up to the implementation of child benefit has shown the way government ministers make decisions on social policies. We can see from the literature that the government did not necessarily make a decision on the needs of the public but was the opinions of the TUC dominated their decision. The leaks led to government embarrassment and a swift change of mind to implement child benefit. This shows Labour may have introduced child benefit to keep the public happy and to avoid being voted out.
It appeared in the 1970’s that there was a wide support for reforms of the Family allowance as the Labour and Conservative governments supported change as well as the trade union movement. The proposal for the introduction of child benefit raised the subject of whether the monthly payment should be paid into the purse (mother) or wallet (father). With the previous system men received all welfare benefits for the family. The argument that the benefit should go to the purse was so that the person who primarily cared for the children could organise the family budget for the likes of food and clothes (McCarthy, 1983). This can also make sure that the money is spent on the child and on items the child needs (Bennett & Dornan, 2006). Recent evidence from CPAG (Bennett & Dornan, 2006) claimed that child benefit is regarded as highly valuable to mothers. The benefit may also be the only formal income the mother receives and is regarded as an ‘independent income’ for some mothers. It appears the shift from wallet to purse was significant argument in the introduction of child benefits and was one of the main reasons for change. The transfer was also an issue for the trade unions where the majority of members were male at this time. There were sexist attitudes towards this move as men would lose out on their tax allowances and therefore became against child benefits. However the change from wallet to purse did make sense and became implemented. Therefore this was an argument that welfare for children had to be improved and changed.
Since the introduction of child benefit in 1977 there have been a number of increases and changes depending on the government in power. The largest change however since its introduction will be the Conservative – Liberal Democrat coalition reforms pledged in October 2010 and is an issue both parties seem to agree on. According to Roberts (2010) {online}, the Liberals Democrats believe this move has been long overdue. The policy proposes that if at least one person in the household is paying the higher tax rate earning more than £43,875 per year then that household will no longer be eligible to receive the benefit. These cuts have caused public uproar. The coalitions aims are to cut public spending by an average of 25% across all departments excluding health and overseas developmental (AVECO, 2010) {online}.
An ongoing argument against the withdrawal of child benefits from higher rate taxpayers is that it is unfair, and the design of the policy is unclear. The media highlight this showing how unjust the policy proposal is and will hit the middle classes most. Ed Miliband in Labour opposition states how it is unreasonable that a person earning two salaries just under £43,875 can keep their monthly payment but those earning over this threshold when the other parent is not working will not receive their benefit (Prince, 2010) {online}. According to the Comprehensive Spending Review by 2014-15 the cut in child benefit will be saving £2.5 billion a year preventing those on a lower income from subsidising higher earners (Spending Review, 2010). It has been argued Child benefit is in some cases wasted as of its universalism and payment for every child. For instance even those who do not need the extra income still receive it. Further, it is argued it is ill-targeted across the board and wasted on those at the top end of the income scale rather than targeting those who are really in dire need of that extra piece of income which the Conservative government believe are good enough reasons to remove Child benefit from higher earners. Therefore the policy reform comes from a right wing background which believes that the state should not be relied on by its citizens such as those who are better off and are able to provide for themselves. Whereas in 1977 child benefit was seen as a collective investment.
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The Labour party challenge the coalition cuts by informing that stay at home mothers will be the worst affected under this move. It is viewed as unfair as for example if a family has the main breadwinner on a £45,00 wage and a female carer staying at home to look after their children, they will lose out on thousands of pounds a year for their family. Single earner families lose out the most (Prince, 2010) {online}. The media claim 15% of tax payers will be affected by this change (Prince, 2010) {online}. A further argument agreeing that women will be the most affected by this is the fact that for some females child benefit is the only form of income the mother receives. Katherine Rake of the Family and Parenting Institute states that for some handling the family budget is the only form of independence some mothers have (Collins, 2010) {online}. With these reforms it seems the Coalition government are reverting back to old ways, favouring male income which the old style family allowances did.
Undoubtedly the policy is designed to save on public expenditure and target those who need it most. The policy however could create problems within the family. It could cost families thousands as it could prevent those on a wage below the cut off from taking employment promotions which take them above the line (Prince, 2010) {online}. When single mothers enter a new relationship with a person who is on the higher tax rate wage which would remove the eligibility for child benefit. Additionally the Labour MP Parmjit Dhanda commented on the reform saying couples may claim they are separated to avoid losing the payment as they feel they should be entitled to it. Checks on this neo-liberalist reform would be difficult and expensive and therefore implementation could become difficult as of the removal of its universalism (Chapman, 2010) {online}.
It is valuable to look at the policy from a historical and political perspective as it has shown how the policy has evolved and why the policy was implemented with the rise of child poverty and a need for a satisfactory form of child support. Cost is obviously a key factor in the cuts however whether this cut is affordable for the future of children remains to be seen. The reforms have brought about controversy politically and publicly as it has raised the subject of who is deserving of child benefit as it has now decided who receives it.
In conclusion child benefit has therefore become a success in Britain and has become relied on by many. The fact that child benefit has lasted over 40 years shows this significance as well as the fact that it has angered many who will be losing out after the proposed coalition reforms.
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