Child Benefit Raised as Part of Anti-Poverty Measures

The Treasury is looking at stepping up the fight against child poverty by giving families the same level of child benefit for all their children. The move follows research published by the Department for Work and Pensions showing fathers in large families have to work nearly 67 hours a week to escape the government definition of poverty. The proposal is also urged on ministers today by the Child Poverty Action Group (CPAG) in a report designed to coincide with 60 years of support for children.

If the level of benefit was equalised between first and subsequent children the cost would be £1.56bn, but benefit 5.3 million children. At present the benefit is paid at £17 a week for the first child and £11.40 for second and third, even through there is no evidence that subsequent children are cheaper to support. The differential was introduced in 1990, but has widened during Gordon Brown’s term of office.

Most evidence shows poorer families are larger families, with 1.4 million of the 3.4 million older children defined as poor (after housing costs) living in households with three or more children.

CPAG believes changing the rules on child benefit could help the government meet its goal of ending child poverty within a generation.

Kate Green, chief executive of CPAG, said: “Child benefit is popular, effective and reaches more children living in poverty than any other benefit or tax credit. That’s why we’re calling on the chancellor to increase child benefit and ensure that younger children get the same rate as the oldest child.

Research published by the DWP in the last month shows the father of the average one-child family has to work 43 hours a week to escape poverty while a father with five children has to work 67. Poverty is defined as £201 a week before housing costs. Large families have longer working hours and greater poverty partly because mothers in large families work less and fathers tend to have lower skills.

Ed Balls, the Treasury economic secretary, showed sympathy for the idea of raising child benefit for subsequent children recently by backing a Fabian Society commission report on child poverty.

The CPAG in its report today argues: “Seeing increases in child benefit as in part equivalent to a tax reduction for families may put them in a different light. Increases in child tax credit cannot really be seen as the equivalent of a tax reduction in the same way as increases in child benefit because they are not available to all families with children.”

Ministers have recently been placing an emphasis on helping second earners in families into employment as the best way of achieving poverty reduction targets.