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Coffee House

Free school meals aren’t the way to tackle rising living costs

18 September 2013

12:08 PM

18 September 2013

12:08 PM

The Liberal Democrats announced yesterday that all children between the ages of five and seven will receive ‘free’ school meals, irrespective of their parents’ income. However, as with any universal benefit, the meals will not free. They will be paid for by every single taxpayer in the country.

The ostensible goals of this policy are irrefutably good: saving families £436 a year at a time when increasing numbers of people are struggling with rising bills is a commendable end. The means of the policy are, however, completely misguided.

It is important that we ensure the right people are receiving help – which is why the government, not unreasonably, provides free school meals for those on the lowest incomes. Universality – costing £600 million a year – is, however, an enormously bad use of public money. It is effectively taxing families on low and middle incomes to subsidise children in affluent families. We are throwing yet more taxpayers’ money at those who scarcely need it, at the cost of those struggling with spiralling living costs.

But ‘what about the “squeezed middle”?’ the policy’s supporters will cry. It is indeed true that it is not just those on low incomes who are struggling to make ends meet. But we a need a government bold enough to change the parameters of the debate. One that will consider making a virtue out of allowing people to keep their own money rather than taking it from them to give back in the form of benefits.
Instead of focusing on subsidies the government should address why costs are so high in the first place. Free school meals will apparently save families £436 per annum. Why not provide that money by way of a tax cut and give families more choice? We cannot afford to simply keep redistributing ever-more income at the expense of meaningful supply-side reform.

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Times are undoubtedly tough. House prices have doubled in real terms since the mid-1990s alone from an already very high level, leaving the UK with one of the worst housing affordability problems in the world. Childcare is too heavily regulated. Energy prices continue to climb – the government itself estimates that climate change policies will add 26 percent to electricity bills over the course of this Parliament.

And it is no wonder families are struggling with food costs when we think of the distortions resulting from the Common Agricultural Policy. A conservative estimate suggests that policy changes could bring about a reduction in food costs of about 25 percent.

Liberalisations in these areas are possible, but the changes needed require a government with guts. Unfortunately, politicians are sending out completely the wrong message.

Instead, we have a government that seems to have forgotten the need to reduce huge levels of public borrowing and spending. It has forgotten a £1.2 trillion debt. Free school meals will no doubt be highly popular, but for all the rhetoric of ‘investment’, this is simply spending money that would be best left in people’s pockets. It also involves a degree of national centralisation that ill-befits a party with the word ‘liberal’ in its name.

The slogan of the Liberal Democrat conference was ‘stronger economy, fairer society’. This policy will achieve neither. It is unfair and regressive, and particularly unwelcome at a time when we are trying to tackle unprecedented levels of debt. The taxes of those struggling to pay their bills should not be spent on easing the lives of affluent families.

Stephanie Lis is Communications Officer at the Institute of Economic Affairs

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