The real reform to Child Benefit
Published in: Daily Mail
The British government is currently tearing itself apart over its proposal to cut Child Benefit for households where the wage-earner brings in more than £42,745 per year. Apparently, this is dividing the Prime Minister, David Cameron, from the Chancellor of the Exchequer, George Osborne.
Osborne wants to cut the benefit because a) it will reduce public spending and b) it hits higher earners, thus fulfilling the Cameroons’ political imperative to be seen to ‘fair’ in spreading the pain of austerity to the better-off (you may think this is a cynical and self-defeating gimmick borrowed from the politics of envy in order to suck up spinelessly to the left, but there it is).
The Prime Minister, however, is queasy – as well he should be -- about a) further punishing the not-so-wealthy middle-class who already shoulder a disproportionate burden of taxation, and b) punishing stay-at-home mothers, since two-earner couples whose separate incomes individually fall below the proposed Child Benefit cut-off will still get the wretched benefit, even though their joint income is far above that of the couple whose sole salary happens to be above the cut-off limit.
Such a manifestly unfair anomaly shows why means-testing is in general a really bad idea. But beyond that, I would say that Child Benefit itself was always a really bad idea, and real reform should get rid of it altogether.
This is because it rewards the wrong thing. It incentivises having children, whereas the state should only incentivise having children in circumstances which are advantageous for society. Since Child Benefit is awarded with the birth of every child regardless of circumstances, it has put rocket fuel behind Britain’s astronomical rate – and rising – of fatherless children born to elective lone mothers.
The rationale for this is, first, that welfare benefits should be focused on solving child poverty. This totally ignores the fact that lone parenthood is itself a major cause of child poverty; and no less important, that even more than material goods children desperately need their fathers.
The second great cry that went up when Child Benefit was first introduced was that benefits for children should be given to the mother alone, because men are feckless no-goods and would only blow such money on drink and fags. And then people were surprised that young men felt marginalised and felt no need to anchor themselves to a wife!
The unmentionable fact is that Child Benefit has been a disaster and should be replaced by incentives for marriage in the tax and benefits system -- incentives which in turn do not penalise single-earner households. But that, of course, would require courage to face down the shibboleths of the left. And that is one thing that the Cameron government shows a near-pathological aversion to displaying.