Andrew Testa for The New York Times
Lucy Elkin with her children Elsa, age 3, and Oscar, 1.
By LANDON THOMAS Jr.
“It’s useful and it helps pay the bills, but it is not as if we are struggling to put food on the table,” Ms. Elkin said as she led her children from the park to their house on the leafy fringe of Hampstead Heath, one of London’s most desirable neighborhoods.
Ms. Elkin, 40, is a freelance writer. Her husband is a computer programmer. Along with more than three million middle- to upper-income British families, they are among the recipients of £11 billion ($17.2 billion) a year paid to mothers with children here. It is a universal benefit that not only costs taxpayers about twice as much as the total for unemployment payments but also represents the largest chunk of the estimated £30 billion ($47 billion) the government pays each year to Britons with above-average incomes.
“It is one of those things that is quite hard to justify,” Ms. Elkin said.
She is not alone in thinking that Britain can no longer afford such generosities. But even as civil servants and ministers are preparing to drastically cut most categories of government spending to help close Britain’s budget deficit, the government is so worried about alienating middle-class voters that it is proceeding very cautiously in limiting the subsidy for having children.
“There is a long history of universal welfare schemes here,” said Patrick Nolan, an economist for Reform, a free-market-oriented research organization that has issued a report claiming that as much as 16 percent of total welfare benefits go to those who do not need them. “But it has become a very expensive luxury when hundreds of thousands are losing their jobs.”
The debate in Britain highlights an issue that other advanced industrial countries are also beginning to grapple with: Who should bear the burden of the coming wave of austerity?
Unless politicians are prepared to dig into the pockets of middle- and upper-income families, experts say, the demands from bond market investors to get government finances under control can be satisfied only by cutting back even further on benefits for the poor and needy. But any serious effort to curb long-established middle-class entitlements risks setting off a public reaction that few political leaders are eager to face.
In Britain, the quandary is particularly stark. The social safety net that has been an essential feature of British life since World War II ended has been built largely on providing similar benefits to all, like health care and home heating allowances for the elderly, regardless of income.
Those earning up to £37,400 a year pay income tax of 20 percent per year.
All told, about a third of Britain’s 61 million people claim either a child subsidy or winter heating allowance. Together they represent a formidable political bloc of families and senior citizens that Prime Minister David Cameron was loath to alienate during last spring’s election.
That helps explain why Mr. Cameron promised not to “means test” the child benefit by limiting it to the poor. He said that payments to the elderly to subsidize television license fees, along with bus fare and heating allowances, would not be touched, either.
Lately, though, the government has begun to signal a harder line.
At the Liberal Democrat’s party conference in September, Mr. Cameron’s coalition partner, Nick Clegg, made the strongest call yet for cutting middle-class benefits, telling delegates that he would be willing to give up the £2,450 ($3,850) in annual child benefits that he and his wife, who is a corporate lawyer, receive for their three children.
It remains unclear whether the government will follow through on that suggestion. But there is little question that social protection, as it is labeled in government accounts, has been the locomotive behind the 53 percent increase in overall outlays, adjusted for inflation, over the last eight years.
This spending spike was driven by previous Labour governments supplying the extra padding to make the British welfare state one of the most accommodating in Europe.
Cuts for the middle class are now on the table throughout Europe, as governments struggle to close budget deficits and reduce debt levels that now average 84 percent of gross domestic product. In France, the government is planning to raise the retirement age from 60 to 62; in Greece, public-sector pensions have been sharply cut, and in Ireland government wages have been reduced by more than 10 percent.
British politicians are moving very cautiously in limiting benefits like child subsidies or a winter heating allowance.
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