Raising a happy, healthy child costs parents on average £210,000 by the age of 21, but benefits all of society. The tax and benefit system should recognise the extra costs that all families with children bear. Simply cutting child benefit means that wealthy households without children do not carry their fair share of the burden; many higher rate tax payers do not have children in their households, so are not affected by the plans. All households with the means – those who have the broadest shoulders – should be helping to share the burden in these tough financial times.

CPAG’s new report shows the hardship the freeze on child benefit is causing, and what impact the proposed claw back will have on families. Surveying and polling over 1,000 families, the report highlights how vital child benefit is in meeting children’s needs right across the income spectrum. Parents said their Child Benefit payments “enables us to live reasonable and happy lives with pride and self-respect” and described it as “a real helping hand every month and helps us provide a healthier life for our child. It is really helpful in allowing my children to take part in active classes that we would otherwise not be able to afford.” Many parents simply couldn’t imagine what they were going to do as the freeze further eroded its value or it was clawed back from their incomes. ‘It goes straight to my kids and it’s them that it will hit.’

We’ve developed a calculator which shows just how much families will lose as a result of these policies.

A lot of the anger in reaction to the proposal is around the unfairness of the threshold. Families with only one earner in the higher income tax bracket will lose child benefit, whereas families with two earners just below the threshold will not – even though the family with two earners may in total be tens of thousands of pounds better off each year.

The sums involved are eye-watering. Families with two children stand to lose up to £31,500, over £1750 a year.  The IFS Green Budget  highlights the impact on work incentives.  As Child Benefit is not taxed, families would need to earn significantly more than these figures in extra income, to make good the damage.  For 200,000 families just under the higher rate tax threshold, this amounts to a massive disincentive to work and earn more. For 170,000 families just over the threshold, this is an incentive to reduce hours and cut pay.

While this aspect is deeply unfair, there is nothing ‘fair’ about taking child benefit away from any families at all.

The British tax and benefit system has recognised the cost of raising children for over 200 years. Families with children face higher costs than families without children and it is right that the tax and benefit system recognises this. The tax and benefit system used to recognise these extra costs by providing a tax allowance for children, but in 1977 Child Benefit replaced these child tax allowances so that they could benefit the main carer (usually the mother) rather than the main earner (usually the father), and because tax breaks do not help families on low incomes who do not pay tax. Research shows that when the main carer (usually the mother) receives the money rather than the main earner, it is much more likely to be spent on children’s needs.

David Cameron promised to make Britain the most family friendly country in Europe. The only EU country that does not give some form of support for all children is Italy, which also has one of the highest child poverty rates in Europe. The Prime Minster should stick to his ‘family friendly’ promise. Asking only households with children to pay for the deficit – rather than all households – could never be family friendly.

Work and worklessness:

It is wrong to say that poverty is caused by parents unwilling to work. The majority of children in poverty – 58% – have a working parent.  These families are in working poverty because very often there is no alternative to low paid jobs, with few opportunities for progression. The lack of good, affordable childcare means that many families cannot afford to work more hours.

Rising unemployment means that many parents simply cannot find work. The significant increase in unemployment in recent years is the consequence of the recession and the economic downturn, not a collapse in the work ethic of parents.

The lack of jobs impacts on children. Children living in households where one or both parents aren’t working are at a significantly higher risk of poverty. Using the most recent data from 2009/10, estimates show that a family with one child in receipt of Job Seekers Allowance (JSA) received only 65% of the amount they needed to meet their basic needs.

Addictions:

While the impact of having a parent who misuses alcohol or drugs is very significant, the number of families with such parents is small. The most recent data available shows these families are atypical across the population: only 2.7% of families in Britain have an alcohol dependent parent, and 0.9% a drug dependent parent.

Parenting practices:

Low income parents are often blamed for ‘transmitting’ poverty to their children through bad parenting. Yet research shows that at all ages, children’s progress is still driven largely by factors such as social class, age and ethnicity. While studies agree that parental behaviour can help improve children’s attainment, this fails to explain the vast majority of differences between poorer and wealthier children.

Some have claimed that a report by Demos published in 2010 suggests otherwise. But in effect, all this did was isolate the effect of parenting on the conduct of children at 5 years old. The report showed that at this point in life, income levels were not as significant as parenting style in shaping childhood behaviour. While children from poorer homes may be emotionally more adept as a result of warmer parenting, they still encounter grave disadvantages compared to wealthier children that cannot be overcome simply by good behaviour.

In fact, parents at the bottom of the income scale lack neither concern nor ambition for their children. A 2008 DWP report showed, for example, that 50% of parents in the lowest income quintile hope their children will go to university. And a new report published this month by JRF demonstrates that young people share these aspirations. It is not parental behaviour that holds them back, but a lack of information as to how to navigate the worlds of education and work.

So rather than reduce responsibility for poverty to individual actions, we need to face the fact that poverty is substantially a result of society’s choices and government‘s policies.