Thursday, October 07, 2010

Our priority should be universal free childcare, not child benefit

One reason why lefties are concerned about George Osborne's plans to restrict child benefit is that they think it will be the beginning of the end of universal benefits, and that once the principle has been conceded, it will lead to the dismantling of the NHS, state pension etc etc.

But if we want to build support for universal benefits, we shouldn't just react to the Tories and oppose every cut that they make. 4 in 5 Labour voters agree with the principle of taking child benefits from the richest families. Lining up on the other side to them won't help save the universal welfare state.

Instead, we need to understand the priorities of middle and lower income people in Britain, and how a welfare state built on the principles of universality can best help them. In some cases, that will mean accepting that some services or benefits which were universal should be removed or means-tested. But in other cases it will mean setting up new universal services or benefits.

Families have born the brunt of the Tory cuts - new schools & playgrounds scrapped, playschemes cut, Child Trust Fund scrapped, free school meals extension scrapped, and now Child Benefit cut.

So how could a universal welfare state best support families?

Lesley Smith:

"A week of slightly synthetic outrage has been fun. And watching the Tories slug it out even more so. But if we want to even things up for the children of single parents, child benefit isn’t the most effective spanner in the box. If we wanted to cease punishing single parents and their children and get them out to work we’d make child care costs properly tax deductible. And not through a tax credit system seemingly devised with the sole purpose of preventing people qualifying or deterring them from finding out."

Nick Pearce:

"The other big policy bet that we need to make is to prioritise the extension of free and affordable childcare. Where such childcare exists - chiefly in the Nordic countries - women have employment rates that are commensurate with those of men. True, employment in these countries can be quite gender segregated, but if more women work, inequality overall falls and the risk of children growing up in poverty is substantially mitigated."

Childcare subsidies help increase productivity and economic activity (parents have to take fewer days off / leave work early when childcare arrangements fall through). They also increase employment opportunities - cost of childcare is a major barrier for parents in getting a job. The cost of childcare is also a huge proportion of income for many middle and lower income families.

In addition, the current system is broken. Many families can't afford the cost of childcare, many childcare providers (especially in the voluntary sector) are at risk of collapsing, and there is low takeup of existing subsidies.

Thirdly, it is a way of modernising the welfare state. The Beveridge settlement was based on women staying at home and looking after children. A 21st century welfare state can't be based on the prejudices of last century liberals.

So the existing means-tested system doesn't work, introducing a universal system would save middle income families thousands and help unemployed people get jobs, and it is a reform which would recognise the realities of the modern world. Perfect conditions for the introduction of a universal system, just as the NHS addressed the failings of the means-tested healthcare system back in 1948.

If we made childcare free or capped the costs so that it was genuinely affordable, it would make a massive difference to most families. It would be a powerful alternative to the Coalition's attempts to make families bear the vast bulk of the costs of the economic crisis. It would help people into work and boost our economy.

But as the greatest champion of universalism said, "the language of priorities is the religion of socialism". If we're going to put forward substantial and popular extensions to the welfare state, then we have to accept that we won't be able to spend £1 billion on benefits for the richest 15% of families.


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