Most people are familiar with the Peter Principle which states that in most organisations people are promoted to one level beyond the limits of their competance. This explains why so much senior management is incompetent.
However the same thing surely applies to family size. Most families have one or more children more than they can afford. It does’t matter how rich they are (within reason) or how many benefits they receive, they will always dilute their average earnings per child to below the definition of child poverty – using the official definition which is a percentage of average earnings rather thah any assessment of actual serious deprivation. This definition also produces the perverse result that child povery declines during a recession and vice versa.
I had an interseting exchange of emails with the late Cheryl Gillan some years ago in which she sent me some statistics showing that on average families on benefits have more children than those not on benefits. I have always wondered whether this correspondance was influential in the decision shortly afterwards to introduce the two chlld cap to child tax credits.
It follows that any decision by Labour to scrap the cap will do nothing to reduce child poverty. Instead we should scrap child tax credits altogether. It is an anomolous system introduced by Gordon Brown administered by the Treasury when he fell out with Frank Field at the the DWP and is incompatible with it. It has different claw back rates and earnings disregards so that in some circumstances appling for the one you can lose more from the other! Coming at a time when we must do everything we can to incentivuse people back into work, it is perverse.
It would be a simple matter to add one child tax credit to every adult universal credit and scrap them. This would result in no change in benefit income for 2 parent 2 child families, or 1 of each, and existing larger families could stay on the old system until they had grown out of it. But it would completely remove the incentive to breed for benefits and give a welcome one-off increase to single adults. The reduction in the birth rate would pay for the latter.
John Poynton 