Child poverty 'will rise as cuts hit families'

The row over the Government's "progressive" credentials and the fairness of the emergency Budget is blown open today with new research from the respected Institute for Fiscal Studies.

The IFS's study of the effects of the June Budget, drawing on evidence published by the Department for Work and Pensions, suggests that the Prime Minister's and the Chancellor's claims that the Budget would not increase child poverty are wrong. Research commissioned from the IFS by the End Child Poverty campaign shows that the group that George Osborne's Budget will hit hardest are the poorest families with children, who face a loss of just over 5 per cent of their income by 2014. Families with children lose more than pensioners or other household types in all except the top-three income groups.

The Treasury has argued that an increase in the child tax credit will help protect the most vulnerable and prevent child poverty rising, but in its analyses it did not include the effects of wider benefit changes, such as restrictions on housing benefit. The IFS's work has attempted to do that, and has revealed a less favourable picture.

James Browne, senior research economist with the IFS and co-author of the report, said: "It seems likely that, once changes to other benefits are taken into account, child poverty will go up."

The IFS report is especially embarrassing for Nick Clegg, who is "holding the fort" in the Prime Minister's absence, and who has insisted on the Coalition being a "progressive" force.

The Treasury Select Committee last month asked the Chancellor to provide a wider analysis of the redistributive effects of the Budget, but this has not been forthcoming as yet.

In his Budget statement, the Chancellor declared that "the policies in this Budget, taken together, will not increase measured child poverty over the next two years" and that "overall, everyone will pay something, but the people at the bottom of the income scale will pay proportionately less than the people at the top. It is a progressive Budget."

David Cameron added: "We are absolutely committed to meeting the child poverty targets. This Budget, despite all its difficulties, does not add a single family to child poverty."

The Coalition has adopted the outgoing Labour government's goal of eliminating child poverty by 2020.

A spokesperson for the Treasury rejected the IFS claim: "It is selective, ignoring the pro-growth and employment effects of Budget measures such as helping households move from benefits into work, and reductions in corporation tax."

Politically, the argument over child poverty will add to the fierce debate within Government departments and between the coalition parties on welfare reform. For Liberal Democrat grassroots critics, it will be taken as further evidence that Liberal Democrat ministers, such as the Chief Secretary to the Treasury Danny Alexander and the Pensions Minister Steve Webb, are conceding too much.

It may also widen the open split between George Osborne and Iain Duncan Smith. Mr Duncan Smith is reported to have toyed with the idea of resignation. Pensioners' winter fuel allowance is another looming political flashpoint.

Case study: 'They should help us. Children are so very expensive'

Jo Wilson

Mrs Wilson, 27, lives in Nottinghamshire with her husband Chris, 31, an electrician, and their three children Cameron, 7, Daisy, 5, and Beth, 2.

"My husband works full-time as an electrician and earns about £36,000 a year. Some people will say that's good money and we should manage on that, but when you've got three children, a house and a car it doesn't go very far.

We currently get £132 a month in child benefit and £37 a month in child tax credits. The child benefit enables us to buy some things for the children.

Our child tax credits have recently gone down from £40 a month to £37 because my husband started earning a bit more. But from 2012 we probably won't even get this because of the cuts. It may not sound a lot but it's nice to know it's coming as it means I can buy a couple of pairs of shoes for the children.

The rise in VAT will also be very bad for us. It will be a big jump with everything being more expensive just at a time when money will be tighter.

I do think they should have done more to protect families with young children. Young children are so very expensive."

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: 3rd Line Virtualisation, Windows & Server Engineer

£40000 - £47000 per annum: Recruitment Genius: A 3rd Line Virtualisation / Sto...

Recruitment Genius: Refrigeration and Air Conditioning Service Engineer

£26000 - £35000 per annum: Recruitment Genius: A successful national service f...

Recruitment Genius: Business Development Executive / Sales - OTE £25,000

£15000 - £25000 per annum: Recruitment Genius: This is an opportunity to join ...

Recruitment Genius: Sales Administrator - Fixed Term Contract

£17500 - £20000 per annum: Recruitment Genius: We currently require an experie...

Day In a Page

Syria civil war: Meet the military commander who says his soldiers will not rest until every inch of their war torn country is free of Islamist 'terrorists'

‘We won’t stop until Syria is back to normal’

Near the front lines with Islamist-controlled towns where Assad’s troops were besieged just last month, Robert Fisk meets a commander confidently preparing his soldiers for battle
Fifa corruption: Strip Qatar of the World Cup? Not likely

Strip Qatar of the World Cup? Not likely

But if a real smoking gun is found, that might change things, says Tom Peck
Twenty two years later Jurassic Park series faces questions over accuracy of the fictional dinosaurs in it

Tyrannosaurus wrecked?

Twenty two years on, Jurassic Park faces questions over accuracy
The inside story of how Bill Clinton built a $2bn global foundation may undermine Hillary's chances

The inside story of how Bill Clinton built a $2bn global foundation...

... and how it may undermine Hillary's chances in 2016
Genes greatly influence when and how many babies a woman will have, study finds

Mother’s genes play key role in decision to start a family

Study's findings suggest that human fertility is still evolving
12 best olive oils

Extra-virgin, cold-press, early-harvest, ultra-premium: 12 best olive oils

Choosing an olive oil is a surprising minefield. Save yourself the hassle with our handy guide
Rafa Benitez Real Madrid unveiling: New manager full of emotion at Bernabeu homecoming

Benitez full of emotion at Bernabeu homecoming

There were tears in the former Liverpool manager’s eyes as he was unveiled as Real Madrid coach. But the Spaniard knows he must make tough decisions if he is to succeed
England can win the Ashes – and Elvis Presley will present the urn

England can win the Ashes – and Elvis will present the urn

In their last five Test, they have lost two and drawn two and defeated an India side last summer who thought that turning up was competing, says Stephen Brenkley
Sepp Blatter resignation: The beginning of Fifa's long road to reform?

Does Blatter's departure mean Fifa will automatically clean up its act?

Don't bet on it, says Tom Peck
Charles Kennedy: The baby of the House who grew into a Lib Dem giant

The baby of the House who grew into a Lib Dem giant

Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

The harrowing testament of a five-year-old victim of Syria's endless civil war

Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
The future of songwriting: How streaming is changing everything we know about making music

The future of songwriting

How streaming is changing everything we know about making music
William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

Recognition at long last

Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
Beating obesity: The new pacemaker which helps over-eaters

Beating obesity

The new pacemaker which helps over-eaters
9 best women's festival waterproofs

Ready for rain: 9 best women's festival waterproofs

These are the macs to keep your denim dry and your hair frizz-free(ish)