Friday 6th March: The Conservative proposal to stop child benefit for families after the third child, hit the headlines during the week, as the party mulls over the possibilities for action if returned to power in May’s election. George Osborne, the Chancellor and his party’s election strategist, is reported to be warming to the idea. Iain Duncan Smith, the Work and Pensions Secretary, battling since 2010 to cap benefit levels, has been exploring whether the benefit might stop with the second child.
Though not yet a pledge, the cut seems to tick all the boxes. Fiscally it shows determination to return the country’s accounts to the black. Economically the message is that the Conservatives can be trusted to continue the hard road of cutting the debt which stubbornly engulfs our economy, running at around £1.4 trillion. Tactically it puts Labour in an awkward spot, with many Labour voters supporting removal.
However, all is not what it seems. Fiscally, few believe that the salami slice approach to deficit and debt reduction is enough to restore this country’s long term economic fortunes; if need is to be met and the economy to grow, then structural change is needed for both the health and benefits systems - indeed, radical change. Economically, the savings involved are tiny, £300 million in all, and according to the Institute of Fiscal Studies they will take 18 years to achieve. Tactically voters tend to be more visionary than is suggested by the random single issue polling.
Right now, voters bored with the fiscal debate and tired of the politics of spin, still have more of a vision than their political masters.
Child benefit is part of that vision introduced in 1977 to replace two entitlements, one, a child tax allowance, from the breadwinner’s earnings, and the other, a family allowance, from the public purse.