Latest Public Sector News

02.11.17

Benefits plans to force 1.2 million more children into poverty by end of parliament

Child poverty is set to rise across the UK if the government continues with its controversial plans for Universal Credit and benefits.

The Institute for Fiscal Studies (IFS) has revealed that absolute child poverty would increase most in the North East, Wales, Northern Ireland and the West Midlands.

Figures come from today’s report analysing statistics from the Office for Budget Responsibility (OBR) which forecast future tax and benefit reforms.

The study shows a that around 7.5 million low income households will see their benefit entitlements cut by over £500 each year in real terms, while some families with two children could see their payments fall by as much as £2,500.

Comparisons between the amount of money low income families receive from benefits against their earnings show that the changes would hit hardest in the North East, with Wales and Northern Ireland close behind. These areas also have a large number of families with at least three children who will be affected by the limiting of means-tested benefits to just two children.

Campbell Robb, chief executive at the Joseph Rowntree Foundation (JRF) who funded the study, called on chancellor Philip Hammond to lift the benefit freeze “so these projections do not become a reality.”

He added: “These shocking figures show the UK’s proud record of reducing child poverty is at risk of unravelling. It could mean an additional 1.2 million children in poverty by the end of the parliament. 20 years of progress are at stake unless the government takes urgent action at next month’s Budget.

“The biggest drivers of the increase in child poverty are changes to benefits and tax credits, especially the freeze on most working age benefits.

“This will leave families struggling to cover the rising cost of essentials as benefits fail to top up low pay and for those out of work incomes stay the same while prices rise.”

In addition to rising child poverty, the planned benefit schemes are likely to increase general poverty in many areas of the country. While some places – such as the south and east of England – will see a fall in overall poverty, the north east, north west, Wales, Northern Ireland and the Midlands are all projected to experience a rise.

Author of the report and research economist at the IFS, Tom Waters, said: “If the government sticks to planned benefit cuts, it should not be surprised if, according to the official measure, absolute child poverty rises.

“Every region and nation is projected to see an increase in child poverty, with the largest increases in the north east, East Midlands, Wales, and Northern Ireland, and the smallest in London, the south east, and south west.

“The larger projected rises occur in areas where families with children are more reliant on benefits than earnings for their income, and where more families are likely to be adversely affected by the new two-child limit on means-tested benefits.”

The news comes in the same week that national charity Gingerbread revealed UC would put an ‘impossible bind’ on single parents because of changes to employment criteria.

Top image: Dave Buchwald

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