The Independent View: How David Laws can help children and the economy at the same time

When David Laws arrived as Chief Secretary to the Treasury, he famously found a note from his predecessor telling him ‘there’s no money left’. With the IFS warning child poverty levels have reached a turning point and will shoot upwards again, we have to hope that any handover note left for him this time is more optimistic, particularly on improving opportunities for poor children.

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.

Read more by or more about or .
This entry was posted in The Independent View.


  • Liz Truss, the new early year’s minister, published an excellent CentreForum paper on how to cut the cost of childcare., based on European best practice. You can find it here:

  • Laws should not even be an MP. Every comments page on every newspaper says he should not have been appointed. Why do the Lib Dems ignore this? I’m glad my children are no longer in school, I do not appreciate Laws’ ethics. Please remember also that the LIb Dems smiled, cheered and brayed the welfare cuts in.

  • David Evans 6th Sep '12 - 1:16pm

    @Anne. “Please remember also that the LIb Dems smiled, cheered and brayed the welfare cuts in.”

    If you want to progress such a rampant untruth, you will need to do it a lot more subtly than this.

  • Peter Watson 6th Sep '12 - 2:05pm

    @David Evans
    Just how did our Lib Dem MPs welcome in the welfare cuts? Did they maintain a dignified silence in parliamentary debates, rising above the usual hullabaloo?

  • @David Evans
    You were obviously not watching when Osborne announced the Welfare Cuts, Clegg and co WERE doing this while setting out the path to deny benefit to seriously ill people many of who have died after being told they are ‘fit for work’ and those who have taken their own lives through despair and that number will increase dramatically over the next couple of years. Each and every Lib Dem has every one of these deaths on their conscience, the same as New Labour and the Tories (who agreed with them) have with their wars. I will not use mealy mouthed platitudes to try and appease your conscience.
    @ Simon McGrath
    You obviously are not a believer in quality family life then? !

  • Simon Bamonte 6th Sep '12 - 5:09pm

    @David Evans: LibDem MPs cheered when the spending review was announced. They didn’t go as far as some Tories who shouted “more, more!”, but they still did nothing to act as if it was a measure they didn’t want to take. LibDem MPs cheered when the welfare bill passed. They cheered when the NHS bill passed. As someone who spent nearly 20 years of my life in this party, it was a heart-sinking moment for me. If someone told me even 5 years ago that I would see LD MPs cheering measures that hurt the poorest and most vulnerable the hardest, well, I would’ve laughed at them.

    @Simon McGrath: Food prices may not have doubled, but when you have very little money (as I do), even small price increases have a big effect. In 2008 I was able to buy a loaf of bread for around 75p. Now it’s about £1.20. Everything has become more expensive for those of us at the bottom but wages have not increased in line with this for most people.I know most LibDems no longer seem to care much about poverty, or the effects our new policies are having on those who have the least, but a little sensitivity and compassion for someone who struggles to make ends meet on your part would not go amiss. Have you ever been in the position of having to skip meals simply so you can afford food for your children? Have you ever had to seek help at a food bank charity (such as the one where I work) and see families where both parents work, yet are still unable to afford the basics at the end of the month or when an emergency crops up? I know the economy and the cuts seem like a game to so many people here, something theoretical that won’t actually hurt them, but I assure you it is not for most people. There are charities such as the one I work for who are simply becoming unable to cope with the increasing demand, poverty and un/under-employment facing many people. Maybe you’d like to come volunteer for a day and see the effects coalition policy (especially benefit cuts) is having on the less fortunate? The offer is always open 🙂

  • Stuart Mitchell 6th Sep '12 - 7:06pm

    “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.”

    I have never understood why Lib Dems are so proud of the Pupil Premium. It is, quite literally, an exercise in trying to solve a complex problem by chucking money at it – something the last Labour government was always getting lambasted for.

  • So you solve major problems without money, Simon? That argument is only used by those who want to justify cuts in public spending. Of course you need research and targeted action, but sure as eggs are eggs, you need money.

    Simon B There are those of us here who do care for the vulnerable in society – we are maybe not so visible these days, but we have not disappeared.

  • Sorry, my first comment was for Stuart, not Simon.

  • Stuart Mitchell 6th Sep '12 - 8:26pm

    I agree, and I don’t have anything AGAINST putting money into these kinds of problems. I should have made it clearer that I find the Pupil Premium underwhelming because it involves SOLELY throwing money at the problem. That’s it. It doesn’t try to do anything more sophisticated than that, or even force the schools who receive it to spend the money on the pupils it is supposed to be helping. It’s like a bad parody of the kind of policy Labour were accused of all the time.

  • Laws!

  • Peter Watson 7th Sep '12 - 11:02am

    @Stuart Mitchell
    “I have never understood why Lib Dems are so proud of the Pupil Premium.”
    The Pupil Premium was also in Labour and Conservative manifestos so I don’t know why we keep trumpeting it as a Lib Dem victory. Ironically, as the only party that specified an amount of new money for the Pupil Premium, we have probably satisfied our manifesto commitment less than the tories or Labour who were both more vague!!

Post a Comment

Lib Dem Voice welcomes comments from everyone but we ask you to be polite, to be on topic and to be who you say you are. You can read our comments policy in full here. Please respect it and all readers of the site.

To have your photo next to your comment please signup your email address with Gravatar.

Your email is never published. Required fields are marked *

Please complete the name of this site, Liberal Democrat ...?


Recent Comments

  • Roland
    Re 2008 financial crash… We should not overlook the role the Conservatives played, by making the UK economy overly dependent upon financial services, resul...
  • Martin Gray
    'Sunak fits well into the neocon mould of Meloni, Farage and Trump – Politicians who believe their own evil myths of Western triumphalism and denialism, who a...
  • Peter Martin
    @ David Allen, " Like Scholz in Germany, {Starmer} risks becoming paralysed by his lack of ambition. But what’s the alternative?" As this is ...
  • Peter Martin
    @ David Allen, " Like Scholz in Germany, {Starmer} risks becoming paralysed by his lack of ambition. But what’s the alternative?" As this is ...
  • Peter Martin
    "I know perfectly well the financial crash in 2008 was not NL’s responsibility." It was mainly the result of what happened in America but it was...