While child poverty is responsive to, and requires, many different types of policy intervention, international evidence shows that social security is an essential tool for reducing child poverty. A note prepared for CPAG by the Institute for Social and Economic Research at Essex University illustrates vividly the effect of taxes and benefits on child poverty rates across the EU27 for 2012.
Figure 1 shows that the UK’s child poverty starting point is very high – we have the second highest child poverty rate before taxes and transfers in the EU27.
As a result, our benefits system has to do a lot heavy lifting than it does in many other countries – figure 2 shows that the redistributive effect of the UK benefits system is the highest in the EU27.
If we cut social security without taking effective action to bring down our pre-tax and transfer child poverty rate, we potentially leave millions more children exposed to poverty.
But even in countries with more propitious starting points than the UK, social security remains an essential policy tool for reducing child poverty. In particular, CPAG is concerned that the AME cap will tie to all future governments' hands with respect to poverty reduction.