UK tax system ‘increases child poverty’
Britain’s tax and benefit policies are actually increasing child poverty rather than cutting it, a right-wing think tank argues today.
A new report by Civitas – which the Treasury dismissed as “a load of garbage” – claims welfare resources are focused on single parents and low-wage earners, effectively providing a financial incentive for couples to split up.
But the authors claim the best way to beat child poverty – which chancellor Gordon Brown has promised to ‘end’ by 2020 – is for children to be raised by two working parents.
“The government claims that it is neutral in matters of the family, but it is far from neutral,” said Civitas deputy director Robert Whelan.
He adds: “Middle England gets short shrift from Gordon Brown, and then [Tony] Blair wonders why we have such deplorable levels of child poverty.
“The way out of child poverty is for children to be brought up by two hard-working parents – but that option is never discussed.”
The report, which compares fiscal systems in France, Germany and Britain, finds the UK’s welfare regime favours poor children who live with single parents over those living with both, and gives a financial incentive for couples to keep their relationship informal.
These, it argues, act as “perverse incentives” for people to have and bring up children in the very circumstances in which they are most likely to experience poverty.
But a Treasury spokeswoman dismissed Civitas’ arguments as “palpable nonsense”, saying half a million children had been lifted out of poverty since 1997.
The risk of a child falling into poverty has fallen from 21 to 24 per cent in that period, she said, and noted that both Unicef and the UN Human Development Programme have welcomed Britain’s progress in this area compared to the rest of Europe.
The think tank’s claims echo those made earlier this week by shadow foreign secretary Liam Fox, who in setting out his stall for the Tory leadership contest warned more support must be given to the family as a unit of social cohesion.
“When healing the broken society, the family is our most decisive weapon,” he argued, adding: “Labour has deprived the family of its economic role, and it cannot be surprised at the results.”
But the Treasury spokeswoman insisted the idea that Britain’s tax and benefits system punishes families was “nonsense”.
“In fact, as a result of the government’s reforms since 1997, by October 2005 – in real terms – families with children will be on average £1,400 a year better off, while those in the poorest fifth will be on average £3,200 per year better off,” she said.
