Regional diversity and child poverty: The case of child benefit in the united kingdom and the need for joined up thinking

With a focus upon Child Benefit we examine the potential impact of the introduction of regionally specific rates of Child Benefit on levels of inequality for households withchildren in the United Kingdom. Using data from the most recently available British Household Panel Study (BHPS) we demonstrate that the current system for Child Benefit, with differences in payments based upon family composition, acts as a regressive system of welfare. Moving towards a flat rate payment for all children is more progressive for all regions of the UK and for Wales and Northern Ireland a progressive system of higher payments for second and subsequent children is shown to have a still more progressive outcome. Further, we demonstrate that the Child Benefit system can provide an effective and flexible redistributive mechanism for addressing child poverty in a way that is currently not understood.