The claim
“We’re going to have a system where the middle classes are discouraged from breeding because it’s jolly expensive, but for those on benefit there is every incentive.”
Lord Flight, interviewed by the Evening Standard, 25th November 2010
Cathy Newman checks it out
Howard Flight first said his remarks had been taken out of context, and then apologised and said he wanted to withdraw them completely. But despite his attempts to suggest otherwise after the event, the implications of the incoming Tory peer’s comments were quite clear: the child benefit cuts would deter the middle classes from “breeding”, and encourage the poor to do so instead. And that, he concluded, was “not very sensible”.
There were, Labour lost no time in pointing out, echoes of Sir Keith Joseph, the founding father of Thatcherism, who in 1974 claimed that the rise of poor, unmarried mothers “threatened…our human stock”. Politically explosive, to be sure, but economically speaking, is Flight actually on firmer ground?
The analysis
Howard Flight’s turn of phrase was not only clumsy but offensive. But at its heart was a valid question: do tax and benefits influence how many children people have?
Earlier research suggests it might. In 2008, the independent financial think-tank, the Institute for Fiscal Studies, looked at the impact of the introduction of child-related welfare which went up the more kids you have – benefits like Gordon Brown’s cherished tax credits.
It found that between 1999 and 2003 government spending per-child on these benefits rose by 50 per cent in real terms, and that there was an increase in births (by around 15 per cent) among low-income families.
David Cameron has promised to stop child benefit for higher rate taxpayers from 2013. So will that discourage the better off from having more children?
Child benefit accounts for a smaller proportion of income for better off families than poorer households.
But that’s not the only middle class welfare cut the coalition government is making.
Higher rate taxpayers (the richest 15 per cent of families), will also have their tax credits taken away.
The poorest families, by contrast will keep their £21-a-week child benefit and will also see their tax credits increase from £44 to £47 per week.
The coalition’s decision to put up rail fares will also hit better-off commuters.
So it’s no wonder the Labour leader, Ed Miliband, is making attempts to reach out to what he calls “the squeezed middle”.
Cathy Newman’s verdict
To suggest, as Howard Flight did, that it was somehow more “sensible” for the middle classes to have bigger families was downright offensive. But if he’d expressed himself a different way he might have had a point. If he’d pointed out that the combination of spending cuts – everything from stopping child benefit to increasing rail fares – and the soaring cost of living was “squeezing” the middle classes, few would have quibbled with him.
