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Cap child benefit? There are better ways to cut the welfare bill

16 December 2013

David Davis is plainly right that the Tories are just testing the water to see how talk about capping child benefit to two children for people on the dole goes down with the punters. And the predictable result is that the water isn’t really all that cold.  The suggestion has gone down nicely with quite a few, especially those – no offence folks! – who sound off on the internet. Any restrictions on welfare are popular; we know that. And it’s all too easy to think of examples of egregious fecundity on the part of people who we would probably prefer not to be parents at all: the child-killer Mick Philpott say, father of 17. As Iain Duncan Smith observes, most working families have to think hard about having children; ‘yet within the welfare system, it’s almost turned on its head, so additional children are actually recognised, with no limit.’ Yes, I can see lots of people will relate to that.

The talked-about cap would not, of course, prevent Mr Philpott and similar from begetting as many children as he likes. It would simply restrict child benefit for any future children to a maximum of two; it’s not yet clear whether the cap would apply to child tax credits. It wouldn’t apply to families getting benefit right now either. It’s not China. Still, I think the Tories should think harder and longer about this one.

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For one thing, what a cap looks like is a steer from the state, not just about the desirability of paying for your own children, but about the ideal family size. We’re prepared to pay for two, it says, but not more. It looks like two is the approved size, as seen from Tory HQ, most of whose inmates can obviously afford more. And that’s the other obvious message: big families are the privilege of the well-to-do. Granted, for those actually in work this is already the case: there is no more effective contraceptive than the price of housing. (I do not, myself, know how we’re going to manage when it becomes positively improper for my two children – one boy, one girl – to share a room, because, God knows, I can’t afford to move. Perhaps we can shift to the sofa.) And that, Tories may say, is the whole point: if those in work have to think about the consequences of their childbearing for their circumstances, well, why shouldn’t the jobless? Here’s why: it looks like being anti-children. It looks like the party wants to penalise people for having excess children by only recognising two. If I were a third child, I should feel a little unloved.

I quite take the point that welfare spending has risen, is rising and must be diminished. But I’d caution the Tories against focussing their cost cutting on child benefit. By all means carry on putting a cap on the overall benefit that each household can attract, including housing benefit. That cap may mean that big families in particular have their welfare cut, but the cut isn’t specific; it doesn’t look like the Tories are out to get the children. It does, however, address the basic problem, which is that you can at present be better off on benefits than in a low paid job.

But there’s a further issue here, about whether we see children as an asset or a burden. I am a little tired of commentators lecturing the Japanese government about the desirability of immigration as a solution to the problem of an ageing, shrinking population – to sub-contract to others the pleasant business of having babies. The Japanese, you see, have been almost excessively provident in only having children they can afford. Here, immigration has indeed provided both a larger workforce and more children – immigrant communities tend to have bigger families – but for most families, the drift of government policy has been to encourage women to return to work as soon as possible after having children and to deter them in the first place from having them through the exorbitant cost of housing. Perhaps we should be worrying less about how many children the jobless have, and rather more about how hard it is for working families to afford them.

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  • Fencesitter

    As things stand, we pay our politicians to bribe us with our own money, thereby creating work for employees of the state.

    Madness, no?

    The libertarian case for minimal government deserves a serious hearing given the financial mess bequeathed by the current ‘system’.

  • madasafish

    A confused article this.

    The real world is : if you can’t afford it, don’t have it.


    • mrsjosephinehydehartley

      In the real world we say full stop.

      But kids happen, with or without a contract. This is life, but hey! …let’s embrace the risk with true compassion for the ordinary member of the general public.

      • madasafish

        Oh yes I agree.

        But I don’t see why taxpayers have to pay for others’ mistakes.

        The “ordinary member” of the public pays taxes to support those in need : not those who cannot plan their procreation and after two children one would think people would learn what causes them:-)

  • Rocksy

    I don’t give a damn how people feel about capping the money dished out to families. This isn’t just about saving money. It’s about keeping your legs together or your zipper up or taking precautions if you can’t afford to have kids. It’s about not using kids as some kind of welfare asset.

  • manonthebus

    We do not need an increase in the birthrate because we have too many people here already. Thus, there is no justification for a child benefit to encourage women to have children. The same should be true of child tax credit. There is no logical argument at the moment for retaining these two benefits. As for the writer’s point that this would mean only rich people having large families, I see nothing wrong in that. People could have as many children as they can afford from their own resources, not from other people’s resources.

  • Noa

    “…The talked-about cap would not, of course, prevent Mr Philpott and similar from begetting as many children as he likes….”
    Maybe not, but it would make his feckless female partners stop and think before being gotten.

    • westerby1

      As far as I recall both his wife and girlfriend had jobs? Also the man was a bully, and had been violent towards a previous partner, he may have forced his wife and girlfriend to have children with threats of violence? Men like him also threaten violence, or even death, if the woman tries to leave.

      My point is, the women were not feckless from a work perspective and could quite easily have been gotten against their will. If you listen to the recorded telephone conversations it is obvious he ruled the roost.

      • Tom M

        Then in that case you have just established a good reason to stop child benefit completely.

    • Tom M

      I suspect that somebody would need to explain the effect of being gotten. I sincerely believe they cannot associate cause and effect.

  • Tom Tom

    There didn’t used to be any payment for the first child, only subsequent children.

  • Mr Grumpy

    As a fellow Catholic I understand your concern not to be anti-children. But surely you are missing part of the point. This is not just about removing perverse disincentives to work; it’s about (or at least should be about) reducing the burden on families like yours.

    I know a mother of four boys who has never had a job. The family lives in a brand new housing association property with five bedrooms and a bit of garden. As it happens she’s an impeccably conscientious mother and decent housing will undoubtedly help the boys turn out well. But there is a price tag and your share of it is money you can’t spend on that third bedroom. It simply isn’t just, is it?

    • Rocksy

      An ‘impeccably conscientious mother’? At what point does the conscientiousness kick in? I’m a Catholic too. Yes a practising one and I don’t give a damn what people read into the governments message. Having children you can’t support and modelling a life of dependence is about as anti child as you can be. If they’re going to keep reproducing more of their useless kind, let them pay for them.

  • Count Dooku

    Child benefit should be abolished, end of. Why you would tax someone and then give then back their money after the be autocrats have taken a cut is beyond me.

    If the state wants to assist the poor, it should be as part of a universal credit and be means tested. Nothing more insidious than middle-class welfare.

    • HJ777

      The objections to that are that means testing is bureaucratically expensive and it reduces or eliminates incentives thus creating a dependency trap.

      • Count Dooku

        The point of universal credit is a sliding withdrawal which should minimise the marginal tax rate of employment. Means testing is expensive but it is a whole lot cheaper than universality.

        • HJ777

          It depends what you mean by ‘cheaper’.

          If you make child benefit means tested, then you will hugely increase the number of people drawn into the means-tested benefits system (because they may not have been claiming other benefits), so you increase both the number of people being means tested and the complexity of administration to actually assess eligibility.

          Even if means testing saves cost to the government (i.e taxpayer) overall, it may still be, economically speaking, more expensive to the country as a whole. This is because a higher proportion of GDP is dissipated in ‘deadweight’ costs due to the greater administration complexity.

          No country ever got richer simply by expanding its bureaucracy.

          • Count Dooku

            I didn’t say means test child benefit. I said abolish it.

            Any assistance to the poor should be via a universal credit which is linked to income (or lack thereof) , not children, and the rest can come to the rest of us in a tax cuts.

    • Andy

      Totally agree. Child Benefit is just silly and should be abolished.

    • Abhay

      Agree. Abolish it completely.

      I am also getting the sense that Tories like IDS (supposedly hard conservative, heck knows what they have been ‘conserving’) have talked a lot and they try to sound radical in their approach but the ultimate policy amounts to tinkering at the edges. Not much more.

      In the end, if high immigration and dole + various ‘credits’ continue, nothing will change. Expect disaster.

      • Russell

        Exactly! How Cameron, IDS and the other Conservative party Ministers think they can brag about introducing a £26,000 NET cap is a joke when many, many, ‘hard working taxpayers’ earn (EARN) a lot less after deductions of the very same tax and NIC from their earnings that is used to pay this staggering amount of ‘welfare’.
        They really don’t get it at all, and that is why myself and many millions of other potential Tory voters will be voting UKIP in all future elections until either UKIP get into a coalition government and have an influence, or eventually get in with a majority, if the main parties continue to refuse to listen.

  • Russell

    You are absolutely correct in assuming this would be welcomed by (I would suggest a large majority) many taxpayers. I believe I heard Davies say that it would include child tax credits being capped at 2 children.
    We hear daily about how hard done to single parents, hard working families etc. are, and how much immigration benefits our country!
    About time the politicians took some notice of the millions of single or married couples who have no children and the millions of live alone single taxpayers who pay for all this ‘welfare/benefits’ system.
    Now if only the numpty Cameron and his colleagues would actually take some action on radically reducing the welfare bill for taxpayers, with things like this, along with real concerns about immigration, and getting us out of the EU. He might then have a slim chance of winning the 2015 General Election……until this happens he is going to be an ex PM soon.

  • sarahsmith232

    The benefit cap was a con, it doesn’t actually exist. They can still claim silly amounts, they just have to put in a measly 16hrs then the skies the limit. This is just yet another PR stunt that will never be implemented.
    It should be brought in. This should be about being responsible w/ other people’s tax money, nothing to do w/ ‘steering’ or using the tax system to socially engineer their ideal society, ala the Labour party. Also, what happened to the party that believes in the importance of self-reliance and personal responsibility? The Tories are now just blowing in the focus grouped wind, lurching from one empty and bogus PR statement to the next.

  • Ian Walker

    It seems perfectly reasonable for Child Benefit to be a cash payment for the first two children, and an income tax relief for the third and subsequent. Switzerland operates their child benefit entirely through tax relief, for instance – each additional child just increases the tax-free allowance for the primary earner.

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