The United Kingdom

Chapter 5 examines how in the UK the Blair government’s promise to end child poverty translated into the introduction of the Working Families Tax Credit in 1998, which was subsequently split into the Working Tax Credit and the Child Tax Credit in 2001. The UK follows the Canadian case in terms of tracing the dominant logic of income supplementation to the cultural legacy of family allowances and ends up with the same combination of refundable tax credits. When the Labour government reached the limits of income-testing, the Treasury quietly turned to fiscalization as the solution to expand benefits in the face of pressures for austerity. The Family Income Supplement was simply converted into the Working Families Tax Credit. While its predecessor had been classified as spending, the Working Families Tax Credit was classified as revenues not collected. The limits of fiscalization were soon tested, as the Office of National Statistics called the government’s reclassification into question.