As Minister for Schools, David Laws will oversee the development of the party’s flagship policy to tackle child poverty, the Pupil Premium, which Sarah Teather lists as one of her main achievements in her time as an education minister. But evidence is mounting that much more needs to be done outside the classroom to prevent a disastrous rise in child poverty.
This week Child Poverty Action Group and the Joseph Rowntree Foundation published The Cost of a Child in the 21st Century. It is the first time a rigorous minimum income standard approach has been taken to the cost requirements for meeting children’s basic needs for food, clothing, shelter and social inclusion. It shows that the cost of children has been rising faster than inflation and that the support families receive from the state falls significantly short of the minimum income standard British parents think children need.
This is not just the case for families without work, but also for those on low pay. The combination of a full-time National Minimum Wage and in-work benefits is not sufficient to ensure the basic needs of a child are met either. For single parent families, they are left with 89% of the basic requirement; and for couple families it is just 82% of the basic requirement.
The basic cost of raising children – £143,000 – has risen faster than inflation. This is partly down to high food and fuel price inflation, which hits families with children harder because these items are such a large component of family spending.
But it is childcare that David Laws should take note of as the biggest driver of increasing costs. Since 2008, childcare costs have risen by about 30% outside of London and by a staggering 50% in the capital, squeezing family budgets further.
As costs soar, families get squeezed; pushing many into poverty. The number of food banks has doubled over the past year and evidence of hardship is overwhelming (see this, this and this, for example).
Families struggling with the rising cost of living need help. And helping them would deliver a boost to their local shops and services, and stimulate the UK economy overall.
But as thing stand, struggling families are having their meagre support scaled back just when they really need it. Child Benefit is facing a real terms cut of 10% and the value of childcare tax credits has been cut by 12.5%. Whether it’s a high street chain trying to hold onto staff, or a self-employed child-minder or nursery trying to keep its business going, the loss of spending by families creates a vicious economic cycle that pulls many others down.
Let’s hope that David Laws can ensure this reshuffle heralds not just a change of personnel, but a change of tack. Instead of a top rate tax cut for the richest, and tax credit cuts for the poorest, the opposite is needed for both the economy and Britain’s struggling families. Social support transfers for families are a proven approach to stimulating the economy; and, by opening up opportunities, would help today’s children develop into the healthy, productive citizens our economy needs for tomorrow too.
* Alison Garnham is Chief Executive of Child Poverty Action Group.