Giving All Children a Good Start
Financial Provision in Pregnancy and the First Year of Life - by Fran Bennett
For ‘First 12 Months’ project, Institute for Public Policy Research
Acknowledgments
Many thanks to the Maternity Alliance for valuable information and discussions, and to Lisa Harker, Helen John, Heather Joshi, Jane Lewis, Ruth Lister and Matilda Quiney - and Liz Kendall, and all the participants at a seminar organised by IPPR on 12 September 2002 - for very useful comments on a preliminary outline and/or first draft. The responsibility for the views expressed, and any errors, remains mine.
Contents Page
Key points and issues 2
1. Introduction: Key Stage 0 3
2. What’s the problem? 5
3. Post-maternity parental patterns 9
4. The political context 10
5. Basic building blocks 11
6. Recent history of financial provision 14
7. Plans for the future 17
8. So is there still a problem? 21
9. Some policy pointers to the way forward 26
Help for groups ‘left behind’ 26
Improving maternity/paternity/parental provision 27
Rebalancing financial provision for children 30
Other proposals 30
10. Some challenging issues 33
Conditionality 33
Benefits in kind 34
‘Main carer’ 35
Payment for caring at home? 35
11. Paying for improvements 37
12. Conclusions 38
Notes 39
Key points and issues
Setting the scene
· the brief for the report was to identify and address the key public policy issues involved in financial provision for pregnancy and the first year of life
· this has been a focus of recent policy change – but the imminence of key reforms and the developing debate about gender roles make this a good time to re-examine it
· both pre-existing poverty and pregnancy and the early stage of parenthood are key
Building blocks for policy
· value horizontal and lifecycle redistribution, as well as vertical redistribution
· build up non-means-tested provision, with its multiple functions and advantages
Recent history of financial provision
· the UK has had low levels of maternity/parental provision; but this has improved recently, partly due to EU directives; children have also been a recent policy priority
Plans for the future
· major reforms for maternity/parenthood and financial support for the under-1s will be implemented in 2003
So why is there still a problem?
· child poverty still exists; there are gaps in provision; confusion between direct and indirect costs can make policy direction less clear; there is still financial pressure on parents, partly due to gendered divisions of labour and market inequalities
· poverty amongst young children may be under-estimated, due to the scale used
Some policy pointers to the way forward
· help for those left behind, including better benefits for those of child-bearing age
· more emphasis on child benefit, and rebalancing of support towards large families
· more generous financial provision during pregnancy, via improved benefit levels
· better paid maternity leave, with increased pay during paternity leave, and paid parental leave, part of it reserved for fathers (with extra for lone parents)
· flexible working should be a right; employment rights should apply to all workers
· child care for the under-3s still requires more development and better funding
Some challenging issues
· conditionality is increasing, but does not build on the efforts of those in poverty themselves to escape it, and seems to contradict their desire for greater control
· identification of the woman as ‘main carer’ may be examined critically in future
· payment for caring at home, especially without continued links with the labour market, could threaten to exacerbate existing inequalities
How to pay for improvements?
· via increased income tax, reformed inheritance tax etc - shared by all taxpayers
Conclusions
· the government should not let up on its focus on young childhood - but to achieve a good start for all would also mean looking further back; and provision at this time should also look forward, to ensure it does not prejudice equality of life chances later.
1. Introduction: Key Stage 0
1.1 ‘The older principle of universality needs to be brought [back]
alongside diversity. The starting point is our common humanity
and the phenomena of birth, death, illness, work, happiness and
loss. True, these are experienced differently, but the conditions
are common: hence Marshall’s proposition that ‘… when you are
weighing a naked baby on the scales, the idea of social class does
not obtrude itself greatly.’
(P Harris, ‘Welfare rewritten’, review article in Journal of Social
Policy, 31:3, July 2002, p. 314)[1]
‘There is no more powerful symbol of our politics than the
experience of being on a maternity ward. Seeing two babies
side by side. Delivered by the same doctors and midwives.
Yet two totally different lives ahead of them …’
(Rt Hon Tony Blair MP, Prime Minister, speech to Labour
Party conference, 1999)
In the same speech, the prime minister declared: ‘we owe it to every child to unleash their potential. They are of equal worth. They deserve an equal chance’. More recently, the government has said that it wants to ‘ensure that every child has the best start in life’.[2] That is what this report is about.
1.2 The brief for this report was to identify and address the key public policy issues involved in financial provision for pregnancy and the first year of life, and in particular to:
· outline the financial support that is currently available for parents with children under one, including during pregnancy;
· assess the adequacy of and/or gaps in this provision; and
· propose changes in policy for the future.
Separate papers could have been written on disabled children, lone parent families, and other specific groups; but this report focuses on financial support for pregnancy, early parenthood and the under-1s in general. It does not deal with housing, transport or many other areas of provision which have an impact on family finances.
1.3 Financial provision for pregnancy and the first 12 months has been a clear focus for new policy measures over the last few years. Many policy changes to financial provision for parents and children, including babies, have also been announced but are only due to be implemented in the coming year. This creates two major challenges for the author of a report such as this:
· most of the data which may be used to analyse the current situation (such as mothers’ rates of return to work after childbirth) are more than usually inadequate for judging current progress, because of the changes due to take place shortly; and
· the government could argue that it has already carried out major reforms for the under-1s and their parents and now wishes to direct its attention elsewhere.
1.4 However, there are answers to these challenges:
· first, wherever possible, when data are used it will be made clear whether they take account of the changes due in April 2003 or not;
· secondly, whilst the changes due in April 2003 are undoubtedly significant, this is partly because the UK had some ground to make up compared with many European countries, in particular in maternity/parental provision; and
· thirdly, it makes sense now to include these reforms in an assessment of the current position in the UK and what direction(s) we may be going in.
1.5 In addition, in debates about the early stages of parenthood there is currently increasing emphasis on the importance of mothers’ education and employment for children’s life chances and for family finances, and the significance of fathers’ presence and nurturing for children’s healthy development.[3] This makes discussion of parental gender roles particularly interesting and policy relevant.
1.6 ‘Financial provision’, or ‘financial support’, is largely used here to include wages, benefits and other incomes. The report does discuss reductions in costs and help in kind as well, as mechanisms to increase available resources, but does not examine these in detail. As this includes wages, it obviously includes employment and its opposite, worklessness. However, rather than writing a general study on welfare to work, which has already been done by others, this report focuses on employment provisions around the time of childbirth as they affect mothers and fathers. This is not to deny that more general employment provisions and labour market conditions probably have the single most significant impact on family incomes around the time of childbirth and the first year of the child’s life. This is taken for granted in what follows.
2. What’s the problem?
‘… All the parents surveyed in the project [in a disadvantaged area] put
having enough money at the top of their list of priorities in terms of what
would most help in bringing up children. Yet none of the services dealing
with family support in the area saw poverty as an issue in the support they
were providing for parents and families.’
(from paper by A Page for seminar in this project, citing H Penn and
D Gough, ‘The price of a loaf of bread: some conceptions of family
support’, Children and Society, vol. 16, pp. 17-32, 2002)
2.1 It would not make sense to look at the first 12 months of a child’s life, and the 9 months that precede them, without looking at financial provision. Some 3 per cent of households in the UK have a child under one.[4] Families are more likely to be in poverty when their children are young,[5] and very young children are at particular risk of being poor for long periods.[6] Thirty-six per cent of 0- to 1-year-olds lacked one or more socially perceived necessities, according to the Millennium Poverty and Social Exclusion Survey, compared with an average for children as a whole of 34 per cent (though the percentage lacking 2 or more necessities was less than the average).[7]
‘Chronic poverty is especially common among pre-school children,
and this may have the most serious effects on later life chances. This
implies the need to put emphasis on policy for very young families,
whether through enhanced benefits or the promotion of childcare and
employment …’
(Richard Berthoud, ‘A childhood in poverty: persistent versus transitory
poverty’, New Economy, volume 8, no. 2, spring 2001, IPPR/Blackwells)
The Chancellor of the Exchequer describes child poverty as ‘a scar on Britain’s soul’.[8]
2.2 According to the government, a significant minority (1 in 3) households experiences a fall in living standards on the birth of a baby, and up to 1 in 6 (between 10 and 15 per cent) falls into poverty as a result.[9] However, these data are unusual in highlighting the period of childbirth. More usually, data for income distribution are not based on single 12-month periods, such as the first year of life; and in policy terms, it is more common to examine the under-3s or under-5s as a group (see 9.20 below).
2.3 To some degree, these figures are also misleading. Child poverty would be even deeper and more damaging if parents on low incomes, particularly mothers, did not try to protect their children from the impact of poverty, thus exacerbating their own poverty.[10] It is often difficult to separate children’s poverty from that of their parents, and in particular their mothers. Spending on children does not vary as much by economic circumstances as might be expected; and recent research showed income support rates providing only 70 per cent of what was actually spent on children in families on income support at that time.[11]
2.4 Moreover, these figures focus on the effect of the birth of a baby on household income - though they do not seem to distinguish between first births and subsequent ones. But many children are born into pre-existing poverty; their parent(s) are already living in poverty when they are born. Over 200,000 families – nearly 1 in 3 of those having babies each year – get a Sure Start maternity grant, because they are claiming qualifying means-tested benefits or tax credits.[12]
2.5 The risk of poverty is greater for children in some groups, including lone parent families: in 2000/01, 55 per cent of children in lone parent families lived in households below 60 per cent of median income after housing costs, compared with 31 per cent of children overall; and 44 per cent of children in poverty, defined in this way, lived in lone parent families.[13] (It is important to remember, however, that families are dynamic, and that lone parent families may become two parent families and vice versa.)[14] The increased risk of child poverty for large families overlaps for some with the heightened risk for minority ethnic groups.[15] Whilst overall child poverty in 2000/01 was 30.5 per cent, the rate amongst one-child households was 24 per cent and that among six-child households was a massive 71 per cent.[16] The government has recently identified large families as a particular focus of concern, and estimates that by 2004 over half of children in low income households will be living in large families.[17] Households with disabled children are said to be ‘amongst the poorest of the poor’.[18] Families without an earner are up to 4 times more likely to experience severe hardship than those with an earner.[19] There is insufficient knowledge about families with children with a self-employed earner, although it is known that self-employed people tend to occupy both the highs and lows of the earnings spectrum.[20]
2.6 Teenage mothers are significantly more likely than older mothers to bring their children up in sustained poverty.[21] The Social Exclusion Unit’s report on teenage pregnancy[22] makes the link between the reduced aspirations of young girls living on low incomes and the likelihood of early pregnancy; their children are likely to suffer disadvantage in their turn. Recent research also stresses the sense of fatalism about health amongst young people from lower social classes.[23]
2.7 Both the pre-existing financial situation of parents and the impact of early parenthood on family finances need to be taken into account in order to tackle the unequal life chances of babies. It is also clear that they cannot wait. Babies are not a good target for ‘trickle-down’ policies. Although some policies may be available to help children to ‘catch up’, it is much less costly and much more effective to act early.