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Free school meals aren’t the way to tackle rising living costs

18 September 2013

The Liberal Democrats announced yesterday that all children between the ages of five and seven will receive ‘free’ school meals, irrespective of their parents’ income. However, as with any universal benefit, the meals will not free. They will be paid for by every single taxpayer in the country.

The ostensible goals of this policy are irrefutably good: saving families £436 a year at a time when increasing numbers of people are struggling with rising bills is a commendable end. The means of the policy are, however, completely misguided.

It is important that we ensure the right people are receiving help – which is why the government, not unreasonably, provides free school meals for those on the lowest incomes. Universality – costing £600 million a year – is, however, an enormously bad use of public money. It is effectively taxing families on low and middle incomes to subsidise children in affluent families. We are throwing yet more taxpayers’ money at those who scarcely need it, at the cost of those struggling with spiralling living costs.

But ‘what about the “squeezed middle”?’ the policy’s supporters will cry. It is indeed true that it is not just those on low incomes who are struggling to make ends meet. But we a need a government bold enough to change the parameters of the debate. One that will consider making a virtue out of allowing people to keep their own money rather than taking it from them to give back in the form of benefits.
Instead of focusing on subsidies the government should address why costs are so high in the first place. Free school meals will apparently save families £436 per annum. Why not provide that money by way of a tax cut and give families more choice? We cannot afford to simply keep redistributing ever-more income at the expense of meaningful supply-side reform.

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Times are undoubtedly tough. House prices have doubled in real terms since the mid-1990s alone from an already very high level, leaving the UK with one of the worst housing affordability problems in the world. Childcare is too heavily regulated. Energy prices continue to climb – the government itself estimates that climate change policies will add 26 percent to electricity bills over the course of this Parliament.

And it is no wonder families are struggling with food costs when we think of the distortions resulting from the Common Agricultural Policy. A conservative estimate suggests that policy changes could bring about a reduction in food costs of about 25 percent.

Liberalisations in these areas are possible, but the changes needed require a government with guts. Unfortunately, politicians are sending out completely the wrong message.

Instead, we have a government that seems to have forgotten the need to reduce huge levels of public borrowing and spending. It has forgotten a £1.2 trillion debt. Free school meals will no doubt be highly popular, but for all the rhetoric of ‘investment’, this is simply spending money that would be best left in people’s pockets. It also involves a degree of national centralisation that ill-befits a party with the word ‘liberal’ in its name.

The slogan of the Liberal Democrat conference was ‘stronger economy, fairer society’. This policy will achieve neither. It is unfair and regressive, and particularly unwelcome at a time when we are trying to tackle unprecedented levels of debt. The taxes of those struggling to pay their bills should not be spent on easing the lives of affluent families.

Stephanie Lis is Communications Officer at the Institute of Economic Affairs

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Show comments
  • mrsjosephinehydehartley

    This commendable end isn’t just about money though is it? How happy our kids will be knowing this country can treat them all the same when it comes to basic hospitality from our public services; How relieved will so many parents be when they don’t have to scrat about finding something suitable for the kids lunch, on a Sunday night when all the shops are shut.

    The means of the policy could be also, I think, completely sustainable, in terms of reduced bureaucracy and its associated creeps, intruding into the private lives of all parents unnecessarily and inappropriately.

    And this childish gripe about “effectively taxing families on low and middle incomes to subsidise children in affluent families.” – How many children in affluent families are there? Not many at all I reckon, compared to the thousands of other kids who should gain so much more from being treated with an equal measure of decent hospitality.

  • HJ777

    Stephanie Lis is correct, but I’d like to make another point about school meals.

    Presumably, they are/were included in the CPI inflation measure. Now, presumably, they won’t be, as they are provided free (or rather they will be weighted less in the CPI calculation because older children will still pay for them but younger ones won’t so they will constitute a reduced proportion of consumer spending).

    However, let’s assume for one moment that they have been increasing in cost by (say) 10% per year. When they are removed (or reduced in weighting) from the CPI, it would have the effect of reducing the measured CPI inflation figure. This will happen not because the cost isn’t increasing, but because they are not explicitly purchased so there is no longer a price to the consumer to measure.

    This explains why CPI is such a poor measure of inflation. When things are provided by the public sector and are thus generally free at the point of delivery, increasing costs have no effect on the CPI figure. Inflation is simply concealed.

    • Tom Tom

      More merit in subsidising school meals than meals in Parliament or the BBC

  • Alex

    I believe there was also a proposal that all schoolchildren should be issued with standard-issue identical clothing to be worn at school. It would be paid for the by the taxpayer, regardless of family income. That would help parents financially and help reduce the difference in clothing between rich and poor children.
    OK, there wasn’t. But if you think that the school food idea is a good one, why wasn’t there?
    Ditto computer games, pocket money, books, mobile phones. At what point does the state’s intervention in children’s lives, at taxpayer’s expense, end?

  • In2minds

    To reduce living costs bring down energy costs. And to do that requires we scrap windfarms and start fracking.

  • Tom Tom

    The cost of living is high because of QE inflating asset and commodity prices and wages being held down. The State is extracting real resources from the household sector through expropriating Savings and driving up energy Costs and Food prices.
    It is simple Repression

    • dalai guevara

      Yes, but I quite like that.
      I prefer other people going bust whilst servicing my debt.

  • dalai guevara

    Is it me? I thought the economy was growing?

  • rtj1211

    The election bung season is now starting almost as early as US Presidential elections…….

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