George Osborne’s cut to child benefit has triggered a bit of a debate over welfare handouts and procreation.
This is usually a bit of a no-go-area for politicians. But Jeremy Hunt has been brave enough to suggest that long-term benefit claimants should “take responsibility” for the number of children they have. Fraser Nelson, meanwhile, has dug up some numbers on the 2,500 incapacity benefit claimants with 6 or more kids.
This all reminded me of one of my favourite Gordon Brown stories. There were about 45,000 extra children born as a result of Brown’s largesse with benefits, according to economic research. It is a whole generation of “Brown babies” identified by the Institute of Fiscal Studies.
People appear to have taken his fiscal stimulus literally. Big increases in tax credits and income support payments pushed the birth rate to its highest level since 1974. The “price” of an extra child fell for many low income families along with the financial penalty of staying at home as a mother. Working class had more confidence to have children — or at least have them earlier.
The Brown baby boom is not just an interesting economic trend. It puts real political constraints on how George Osborne goes about benefit reform. Brown funnelled money towards families. Now many of those payments are unaffordable, Osborne must decide whether to take them back — from families.
The row over child benefit gives a glimpse at the political stakes involved. The big question is whether Osborne will flinch in the face of hostile fire. Will he be brave enough to cut eligibility for child benefit payments from 18 to 16 (raising up to £3bn — in other words £1,000 off 3m families?) Would he dare restrict payments to three children? And how about those childcare credits — are those now untouchable?
Jim Pickard
Kiran Stacey