FAMILY ALLOWANCES ACT

Family Allowances Act in 1945 and poverty 're-discovered in Britain

Family Allowances Act in 1945 and poverty 're-discovered in Britain

Question 2: Outline the various factors which led to the passing of the Family Allowances Act in 1945. Which factor do you think was the principal reason for the introduction of this reform?

Careful investigation into the causes of poverty in England and elsewhere in the early part of the 20th century demonstrated that a significant factor was family size (Peck? 2005? 15-22). As wage rates in industrial society reflect the worker's production? without any reference to the worker's family responsibilities? what would be an adequate wage for a single person is a poverty-level existence for another doing the same job at the same rate of pay with a family to support (Cottrell? 2003? 55-61). Family allowances paid by the state (or less frequently by some form of payroll tax) were proposed as not only an attack on poverty but also to advance the principle of "horizontal equity" between workers who were bearing the costs of raising the next generation and those without such responsibilities. A third reason for a system of family allowances was contained in the Marsh Report of 1943. Here it was argued that if the allowances were set at a defensible minimum they would replace all other allowances for children under a variety of income maintenance schemes such as social assistance? workers' compensation and unemployment insurance? etc. Such programs could then develop their benefit schedules based on the income need of single persons or couples? leaving the family allowance system to take care of the needs of any children involved (Cottrell? 2003? 55-61). This would add an element of consistency and administrative simplicity throughout the social security system. The idea of family allowances was discussed in Britain? Australia? the US? Canada and in the League of Nations in the 1920s. In 1929 a Canadian parliamentary committee was asked to consider the subject and heard evidence both for and against family allowances. A Québec commission of inquiry into social welfare issues (1930-32) also received submissions on the topic. Neither recommended family allowances.

Little more was heard of the subject in Canada until WWII? when Canada's plan for postwar reconstruction (the Marsh report) was released in 1943 (Greetham? 2001? 33-42). The Marsh Report was a comprehensive attack on poverty and economic insecurity based upon a broad scheme of social insurance supported by universal family allowances? a national health system and a large-scale national employment program. The plan was too radical and expensive for the federal cabinet of the day but political and economic factors prompted Prime Minister Mackenzie King to select one element of the Marsh Report - family allowances - as a vote-getting device in the next federal election. This was also a bid to outflank the political left in Canadian politics? which was making electoral gains (Greetham? 2001? 33-42). King had the backing of economists? a majority of whom predicted large-scale unemployment at the war's end (as had ...