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?
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

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

iJobs Job Widget
iJobs General

Recruitment Genius: Chef / Managers

£24000 - £25000 per annum: Recruitment Genius: This contract caterer is proud ...

Recruitment Genius: Trainee Health & Safety Consultant

£16000 - £20000 per annum: Recruitment Genius: A fantastic and exciting opport...

Recruitment Genius: Project and Quality Manager

£28000 - £32000 per annum: Recruitment Genius: This company is an independent ...

Recruitment Genius: Trainee Sales Executive - OTE £20,625

£14625 - £20625 per annum: Recruitment Genius: This role is for an enthusiasti...

Day In a Page

Mullah Omar, creator of the Taliban, is dead... for the fourth time

Mullah Omar, creator of the Taliban, is dead... again

I was once told that intelligence services declare their enemies dead to provoke them into popping up their heads and revealing their location, says Robert Fisk
Margaret Attwood on climate change: 'Time is running out for our fragile, Goldilocks planet'

Margaret Attwood on climate change

The author looks back on what she wrote about oil in 2009, and reflects on how the conversation has changed in a mere six years
New Dr Seuss manuscript discovered: What Pet Should I Get? goes on sale this week

New Dr Seuss manuscript discovered

What Pet Should I Get? goes on sale this week
Oculus Rift and the lonely cartoon hedgehog who could become the first ever virtual reality movie star

The cartoon hedgehog leading the way into a whole new reality

Virtual reality is the 'next chapter' of entertainment. Tim Walker gives it a try
Ants have unique ability to switch between individual and collective action, says study

Secrets of ants' teamwork revealed

The insects have an almost unique ability to switch between individual and collective action
Donovan interview: The singer is releasing a greatest hits album to mark his 50th year in folk

Donovan marks his 50th year in folk

The singer tells Nick Duerden about receiving death threats, why the world is 'mentally ill', and how he can write a song about anything, from ecology to crumpets
Let's Race simulator: Ultra-realistic technology recreates thrill of the Formula One circuit

Simulator recreates thrill of F1 circuit

Rory Buckeridge gets behind the wheel and explains how it works
Twitter accused of 'Facebookisation' over plans to overhaul reverse-chronological timeline

Twitter accused of 'Facebookisation'

Facebook exasperates its users by deciding which posts they can and can’t see. So why has Twitter announced plans to do the same?
Jane Birkin asks Hermès to rename bag - but what else could the fashion house call it?

Jane Birkin asks Hermès to rename bag

The star was shocked by a Peta investigation into the exotic skins trade
10 best waterproof mascaras

Whatever the weather: 10 best waterproof mascaras

We found lash-enhancing beauties that won’t budge no matter what you throw at them
Diego Costa biography: Chelsea striker's route to the top - from those who shared his journey

Diego Costa: I go to war. You come with me...

Chelsea's rampaging striker had to fight his way from a poor city in Brazil to life at the top of the Premier League. A new book speaks to those who shared his journey
Ashes 2015: England show the mettle to strike back hard in third Test

England show the mettle to strike back hard in third Test

The biggest problem facing them in Birmingham was the recovery of the zeitgeist that drained so quickly under the weight of Australian runs at Lord's, says Kevin Garside
Women's Open 2015: Charley Hull - 'I know I'm a good golfer but I'm also just a person'

Charley Hull: 'I know I'm a good golfer but I'm also just a person'

British teen keeps her feet on ground ahead of Women's Open
Turkey's conflict with Kurdish guerrillas in Iraq can benefit Isis in Syria

Turkey's conflict with Kurdish guerrillas in Iraq can benefit Isis in Syria

Turkish President Erdogan could benefit politically from the targeting of the PKK, says Patrick Cockburn
Yvette Cooper: Our choice is years of Tory rule under Jeremy Corbyn or a return to a Labour government

Our choice is years of Tory rule under Corbyn or a return to a Labour government

Yvette Cooper urged Labour members to 'get serious' about the next general election rather than become 'a protest movement'