Professor Rod Hick considers the Welsh Government’s Cynall payment
With the dust beginning to settle on 7 May’s momentous election, the attention of the new Plaid Cymru government will quickly turn to delivering against their First 100 Days plan and, as they do not command a majority in the Senedd, to securing other parties’ support for their legislative agenda. If there’s one thing that most political parties in Wales agree on, it’s that child poverty rates here are too high. The Social Mobility Commission show that, after housing costs have been deducted, child poverty in Wales is the highest in the four UK nations, at 31.2% in 2023/24, very slightly higher than England’s, at 30.5%, with Northern Ireland’s and Scotland’s child poverty incidence considerably lower, at 23.9% and 23.5%, respectively. 200,000 children are living in poverty in Wales, say the Joseph Rowntree Foundation.
While the last Labour-led Welsh Government affirmed that it was ‘committed to tackling child poverty as an absolute priority’ in its Child Poverty Strategy for Wales 2024, the elevated rate of child poverty in Wales relative to the other UK nations and an absence of poverty reduction targets in that Strategy became magnets for criticism. What that government recognised, rightly, was that securing a decisive reduction in the headline poverty rate would be difficult to achieve with Wales’ limited powers over social security and taxation.
Syniadau uchelgeisiol, awdurdodol a mentrus.
Ymunwch â ni i gyfrannu at wneud Cymru gwell.
Set against this backdrop, Plaid Cymru’s policy of piloting Cynall, a Welsh Child Payment, is promising. This is to be a £10 per-child, per-week payment where children are aged 0-6 in families claiming Universal Credit, modelled on the Scottish Child Payment, which had exactly these parameters when introduced in 2021 (it is now paid at £28.20 per week for eligible children under 16 years of age). Because eligibility is to be restricted to families claiming Universal Credit, this will provide more targeted anti-poverty action than Plaid’s expanded childcare offer, which, like other subsidised childcare schemes, is likely to primarily benefit middle-and-higher earners.
If there’s one thing that most political parties in Wales agree on, it’s that child poverty rates here are too high.
Rather than introducing the new child payment now, Plaid’s plan is to introduce a pilot covering up to 15,000 children, in order to ‘build a robust evidence base and to inform the design of a Wales-wide rollout of the payment’.
An early challenge will be securing the UK Government’s support for – at a minimum, their acquiescence to – the pilot. This is no mere technicality since without the power to ‘top up’ existing benefits, as Scotland can do, it will be necessary to ensure that income from a Welsh Child Payment does not reduce entitlement to Universal Credit and other payments from the Department for Work and Pensions. Without this agreement, the pilot would be scuppered. The mandate Plaid secured at the election and the respect required to underpin a stable devolution settlement mean that the UK Labour Government should provide this support, but it will nonetheless be an early and important hurdle to overcome.
A curious feature of this Plaid’s Welsh Child Payment pledge, however, is that it is to be introduced initially as pilot at all. Scotland’s approach was different: there, the child payment was introduced in a phased approach, introduced as a £10 per child, per week payment for younger children only in 2021, with both the coverage of the scheme and the value of the payments expanded within two years. The similarity of the schemes means that the new Welsh Government should draw on Scotland’s experience and look to the evidence of how this payment is performing. Scottish Government modelling of the impact of the SCP under its original rules – the parameters Plaid have proposed for Wales – suggested that it would reduce child poverty by 1 percentage point. Subsequent Scottish Government modelling of a higher payment of £25 per week for all eligible children under the age of 16 years, suggested a reduction in poverty by 5 percentage points. From these estimates alone, it is clear that the Welsh Child Payment, as currently envisaged, is likely to make a positive, if fairly modest, difference to the Welsh Child Poverty rate on its own.
From these estimates alone, it is clear that the Welsh Child Payment, as currently envisaged, is likely to make a positive, if fairly modest, difference to the Welsh Child Poverty rate on its own.
The effects of the scheme in Wales may not be identical, but they will be similar and reliance on a pilot does raise concerns about timeliness: to establish a pilot, allow time for the effects of the scheme to materialise and to be assessed, the Plaid Cymru government may be approaching the 2030 Senedd election with, potentially, little change in the elevated rate of child poverty in Wales. Moving more quickly would be desirable.
As well as learning lessons from Scotland directly, the new Welsh Government could themselves model the cost of an equivalent scheme in Wales, potentially testing multiple scenarios that might reflect the introduction and subsequent expansion of the scheme, as occurred in Scotland. Another advantage of a modelled approach would be that this can make scheme costs explicit, potentially providing costings for various permutations of payment design. As the Institute for Fiscal Studies lamented in their pre-election analysis, ‘Wales’ main parties have one thing in common: the need to be more upfront about fiscal reality’. Ultimately, whether a Welsh Child Payment commands public support will be dependent not only on its effectiveness in reducing child poverty but on its cost, and how this would be financed.
Gofod i drafod, dadlau, ac ymchwilio.
Cefnogwch brif felin drafod annibynnol Cymru.
A Welsh Child Payment, targeted on those families who need it most, can contribute to lowering the elevated rates of child poverty in Wales relative to the other UK nations. Its introduction would also mark a step-change in devolution in Wales, where social security policy, if not taking centre stage, would at least step out from the wings and onto the stage, with the Welsh Government playing a more active role in this important area of policymaking. The Welsh Child Payment – and some of Plaid’s other promises – may ultimately require raising taxes. There was little mention of additional revenue raising in any of the parties’ election manifestos, but this may be the price of the fairer and more hopeful future that Plaid are promising.
