Friday, 17 December 2010
BRITISH GOVT CUTS WILL SEE 100,000s MORE CHILDREN PUSHED INTO POVERTY
Spending cuts 'will see rise in absolute child poverty'
Institute of Fiscal Studies analysis shows that government programme will push 200,000 into penury
The government's radical programme to slash spending will see the first rise in absolute child poverty for 15 years, with almost 200,000 children pushed into penury, according to an analysis by the Institute of Fiscal Studies.
Tax changes introduced by the coalition government will, the leading independent fiscal thinktank finds, increase absolute poverty by 200,000 children and 200,000 working-age adults in 2012-13.
Cuts to housing benefit alone will force a further 100,000 children into poverty.
In the next three years the IFS says average incomes are forecast to stagnate and this, coupled with deep cuts in welfare, will see a rise in relative poverty for children and working-age adults of 800,000 and a rise in absolute poverty for the same group of 900,000.
The institute directly challenges the government's claim that the impact of the budget would have no effect on child poverty.
Sally Copley, head of UK policy at Save the Children, said: "George Osborne promised in his spending review that child poverty would not get worse over the next two years. These new figures show the government will meet this commitment.
"But standing still on child poverty is never good enough and the prospect of it actually rising after 2012 is totally unacceptable."
Absolute poverty, set at 60% of 2010's average income, is used to set legally binding targets in the landmark Child Poverty Act passed this year with cross-party support.
Robert Joyce, a research economist and an author of the report, said: "We find that the coalition government's measures act to increase poverty among these groups slightly in 2012–13, and more clearly in 2013–14. Meeting the legally binding child poverty targets in 2020 would require the biggest fall in relative child poverty after 2013–14 since at least 1961."
Campaigners said the work sounded "an alarm on a future crisis".
Chris Goulden, poverty policy manager at the Joseph Rowntree Trust, which commissioned the research, said that the rise in inequality and impoverishment were mainly caused by pegging benefits to rates less than inflation, freezing child benefit, and the slew of changes to the housing benefits system which affects 4.6m households.
"It is a reversal of fortune for the poor. The coalition have said that the increases in child tax credits will help but that's sticking plaster," said Goulden.
The Treasury questioned the figures, saying that the IFS admitted "considerable uncertainty", which means the "small differences they identify may not be meaningful".
The coalition has queried how poverty should be measured, and a report for it by Labour MP Frank Field recommended augmenting current poverty indicators with a set of "life chances" indicators. Some on the centre-right say these could include reducing the number of households where no one works, or the 350,000 children living with drug-dependent parents.
A Treasury spokesman said: "The government has been clear child poverty isn't just about getting above an arbitrary line, but is about improving people's life chances, as outlined in Frank Field's review. The steps taken to reduce welfare spending are to incentivise work and remove people from getting stuck on benefits.
"Any consideration of the impact of the government's reforms on child poverty should take into account the wider [government] work to encourage work and improve children's life chances."
Neil O'Brien, director of the right-leaning Policy Exchange thinktank, said: "The problem with what the IFS is saying is that the measure they use isn't an indicator of real poverty; it's a measure of inequality. It defines 'poverty' as being below 60% of the average income.
"This is a hangover from the Gordon Brown era. Real poverty isn't the same as inequality. The IFS's definition would mean that there are actually more people in poverty in Britain today than there are in Poland."