With manifestos on everyone’s minds at the party conferences this year, our quest for catchy policy ideas has been a leitmotif of the SMF’s conference activity. The M Word competition, which seeks the best idea in 140 characters, has seen us recognising new ideas on financial services and public spending, and our fringe events focused on probing MPs and other panellists for their ideas on what should go in the 2015 manifestos.
Today it’s time to announce the winner of our Conservative competition. Entries ranged from ideas to teach children computer programming, to an anti-poverty strategy across the UK. One idea – to introduce auto-escalation for pensions – was so popular, it was reported to be under consideration by a Conservative MP.
But the winning entry, which was first raised at an SMF event on families and welfare, was from the Relationships Foundation:
Let extended families register as organisations to save tax efficiently, fulfil welfare roles & group purchase insurance/utilities #mword
— Relationships Fndtn (@RFcambridge) October 1, 2013
Families on modest incomes are facing a squeeze on their living standards thanks to a combination of stagnant wages, rising costs of essential goods and real-terms reductions in benefits and tax credits. So the next General Election is likely to be focused on how political parties help families with the cost of living.
To help, policymakers traditionally grab for two levers: the state (through increased benefits or tax cuts) or the market (wage or price regulation). So, over the Conference season, Clegg trumpeted the increased in the personal tax allowance and promised free school meals for all 5-7 year olds during infant school; Miliband promised a freeze on energy prices and an increase in the minimum wage; and, finally, Cameron offered a Transferable Tax Allowance to help couples who are married where one parent stays at home to care for their child.
We think it’s time for policy-makers to be much more creative about helping boost family incomes, especially with the state of the public finances and the fragile recovery. Later this month, we’re publishing a report looking at how the wider family helps individual welfare. Even among low-income households, families receive significant financial and practical support from their wider family, especially their parents, which can help substantially with everything from avoiding debt to sustaining work because of the provision of free grandparental childcare. The report will suggest policies that better enable households to give and receive support from other family members.
So, we were excited about the Relationship Foundation’s idea. Already, some government welfare is distributed at a wider family level. Universal Credit, for example, is calculated and distributed on a household level. When assessing eligibility for student maintenance at university, the government takes into account an individual’s parental income. This idea takes this further and enables the wider family to club together in to potentially save money – through tax-efficient savings (as recommended in our forthcoming report), and when purchasing essential goods.
Our research suggests that people with strong family relationships have strong financial, social and emotional outcomes. This interesting idea encourages families to work together, which is generally an overwhelming positive experience for all parties involved. Now we just need to flesh out the details.
Thank you to everyone who entered the M Word competition throughout the party conference season.
