Socialities
Tax credits custos
One group which has often been critical of the Government's social policy is the Child Poverty Action Group. But when the Green Paper, Proposals for a Tax Credit System, was published recently, CPAG made some very welcoming noises. One might conclude, therefore, that the scheme promises to be very good.
Its first great attraction is that the credits will lift a large number of people off means-tested assistance. The Green Paper talks of around a million old age pensioners who, once they are receiving their tax credits, will find it unnecessary to draw means-tested pension supplements.
The second advantage is that children will receive a £2 family allowance in the guise of a tax credit. Further, the credits will start with the first and not, as at present, the second child. The importance of this change should not to be underrated. The Two Parent Families report showed that between 1966 and 1970 the numbers of working families earning poverty wages fell in only one year, and that was in 1968 — the year family allowances were increased. Sir Keith Joseph has already gone on record as saying that a third of all poor working families have only one child, and these were not helped by the family allowance increase. They will, however, benefit from the tax credits, and one can expect a large fall in the numbers of the working poor the day the new scheme comes into force.
But the credits will particularly favour one-parent families as they will be awarded a married person's tax credit. Just how important it is to give more financial resources to this group can be seen from the research by Victor George and Paul Wilding on Motherless Families (Routledge and Kegan Paul £3.50).
In studying the families' incomes, the authors found that nearly one-quarter of the fathers in the sample who were in fulltime work had suffered a fall in wages relative to their situation before motherlessness. This fall took place at a time when most of the population were experiencing a wages explosion, and for half the fathers the drop in income was as much as £6 or more a week. At the same time, 86 per cent of fathers reported an increase in expenditure since the family had become motherless. It is not surprising, then, that 66.7 per cent of the sample had no savings at all, and only 12.2 per cent had over £300.
The tax credits will make a great deal of difference to the income of one-parent families. They will encourage the parent to return to work wherever this is possible, and, in so doing, will reduce the numbers of children going into care because the parent finds the financial strain too much. With the cost of keeping a child in a local authority home now running at more than £21 a week, the extra help promised to one-parent families makes good economic sense.
Over one per cent of school children are in motherless families and a random number of these are reported on in Motherless Familes by Victor George and Paul Wilding (Routledge and Kegan Paul, £3.50).
In studying the families' incomes, the authors found that nearly one quarter of the fathers in the sample who were in fulltime work had suffered a fall in wages relative to their situation before motherlessness. This fall took place at a time when most of the population were experiencing a wages explosion, and for half the fathers the drop in income was as much as £6 or more a week. At the same time, 86 per cent of fathers reported an increase in expenditure since the family had become motherless. It is not surprising, then, that 66.7 per cent of the sample had no savings at all, and only 12.2 per cent had over £300. The Finer Committee reports next year and may recommend some kind of single parent families allowance. With the cost of taking these children into care (£21.15 a week per child) Finer can afford to be generous in this group.
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