Why I...believe Labour should raise taxes to help Britain's poorest children

October 1, 1999

Jonathan Bradshaw, professor of social policy at the University of York, is researching the outcomes of child poverty for the Economic and Social Research Council.

After a disappointing start, the government is starting to deliver on its pre-election commitments to tackle poverty. In March, Tony Blair announced that the government intended to end child poverty within the next 20 years.Gordon Brown's third budget was genuinely redistributive, with measures that the government claims will lift 800,000 children out of poverty. The chancellor promises in his next budget to increase that to one million.

But there are still 4.5 million children living in households with incomes below half the average. Out of 25 Organisation for Economic Cooperation and Development countries, Britain has the third highest child poverty rate, and our package of compensation for the unemployed is the meanest in northern Europe. The government has repeated the mantra that its welfare reform policies aim to provide work for those who can and welfare for those who cannot. They have done a good deal to implement the first part - but very little about the second.

The government is seeking permanent solutions to poverty by moving towards a society where most who want a job can find employment. Labour has also started to redistribute wealth through family tax credits, child-care tax credits and increases in child benefit. But it has redistributed in the wrong direction by cutting 1p off the standard rate of income tax (at a cost of Pounds 2.8 billion to the Exchequer). The government has also failed to restore cuts made in income support when it first came to power. There are still families with children who are worse off in real terms than they were in May 1997.

Ministers are putting too many eggs in the make-work basket. Labour should be supporting people who cannot get access to work. Only 21,000 out of one million lone parents have been helped into work by the government's New Deal. Families with children who are on income support have had only one helpful measure - the increase in state payments for children under 11.

The gap between those in work and those on income support is widening. About 23 per cent of our children are dependent on this state benefit. To achieve its objective of abolishing child poverty in 20 years, Labour will need to increase the level of income support for those unable to find or accept a job. Improving benefits will inevitably involve increases in direct taxation. This is the hole at the heart of the government's strategy. Filling it will not come cheap.

Interview by Helen Hague

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