Benefits and child credits squeeze pushes 200,000 children into poverty

Government admits statistic that Labour says shows children are victims of Tory 'games' and 'economic failure'

The squeeze on tax credits and benefits will push 200,000 more children into poverty, the government has admitted for the first time. This suggests that in total a million extra children will be in poverty as a result of government welfare measures.

The extra 200,000 children in poverty is a result of the government's decision to lift most in-work and out-of-work benefits by only 1% a year over the next three years, instead of increasing them in line with inflation.

Ministers had been reluctant to state what the impact would be on child poverty, an official government measure of relative poverty that looks at the number of households with incomes at 60% or less than the national average household income.

But in an answer to a parliamentary question, the work and pensions minister, Esther McVey, estimated that "the uprating measures in 2013-14, 2014-15 and 2015-16 will result in around an extra 200,000 children being deemed by this measure to be in relative income poverty compared to uprating benefits by CPI [consumer price index]".

Ministers are trying to push through the benefits squeeze with just one day of debate for the committee stage and third reading of the welfare benefits uprating bill in the Commons on Monday.

Labour said the figures showed children were victims of Tory "political games". Ed Balls, the shadow chancellor, said: "The true character of this Conservative-led government has now been exposed. While they give the richest 2% of earners a £3bn tax cut, 200,000 children will be pushed into poverty and millions of working families made worse off.

"Ministers have spent weeks refusing to admit what the impact of their policies would be on child poverty and now we know why. Children are paying the price for David Cameron and George Osborne's economic failure and the political games they have decided to play."

Liam Byrne, the shadow work and pensions secretary, said: "The chancellor's pathetic little games have real consequences for millions of families struggling to make ends meet.

"Ten years of Tory party detoxification has been destroyed because the chancellor needed a new-year dividing line and Britain's poorest children are paying the price. The nasty party is well and truly back."

The Child Poverty Action Group (CPAG) also criticised the changes but a Department of Work and Pensions spokesperson said: "Even with plans to limit increases to benefits, people will still see their benefits go up year on year – there is no freeze in support. And universal credit will make 3m households better off."

Ministers have argued that it is misleading to look at the impact of the benefits uprating move in isolation. They have separately said they no longer regard the relative child poverty statistics, introduced by Labour, as a useful or valid measure. "Looking at relative income in isolation is not a helpful measure to track progress towards our target of eradicating child poverty," the parliamentary answer said.

Ministers have for some time been arguing that the relative income measure is unhelpful as it focuses on too narrow a definition of poverty. The government has introduced a range of additional measures.

Labour points out that David Cameron, when in opposition, repeatedly argued that relative poverty was important and that the Conservative party would measure and act on it.

The government has previously admitted that some families with children might be £728 a year better off out of work as a result of losing their working tax credits following new rules which came into force in April 2012.

Cameron, in his Scarman lecture in 2006, said: "I believe that poverty is an economic waste and a moral disgrace. In the past, we used to think of poverty only in absolute terms – meaning straightforward material deprivation. That's not enough. We need to think of poverty in relative terms, the fact that some people lack those things which others in society take for granted. So I want this message to go out loud and clear: the Conservative party recognises, will measure and will act on relative poverty."

CPAG said that the 200,000 increase set out in the written answer should be added to the 800,000 increase in children in relative income poverty by 2020 that the Institute of Fiscal Studies (IFS) found in its analysis of the coalition's welfare cuts.

The group said: "This now makes it a total of a million children that the coalition's policies are expected to push into relative income poverty by 2020."

The IFS analysis included the impact of a fall in poverty due to the introduction of universal credit.

CPAG claimed the government had revised down the number of children that would be taken out of poverty due to the universal credit from 350,000 to 150,000.

Contributor

Patrick Wintour, political editor

The GuardianTramp

Related Content

Article image
Government urged to scrap 'nasty' two-child limit on benefits
Figures show nearly 600,000 children are adversely affected by policy

Patrick Butler Social policy editor

31, Jul, 2019 @11:47 AM

Budget 2009: Campaigners attack 'disgraceful' £20 increase in child tax credit

Child tax credit will increase by just £20 a year from 2010

Sandra Haurant and Amelia Gentleman

22, Apr, 2009 @9:36 PM

Article image
Up. Up. Up. Child poverty, pensioner poverty, inequality

Gap between richest and poorest families wider despite government efforts

Larry Elliott, economics editor

10, Jun, 2008 @11:01 PM

Article image
Iain Duncan Smith moves to downgrade child poverty targets

Work and pensions secretary seeks to split measure of poverty from income alone and weigh up range of new indicators

Hélène Mulholland and Patrick Wintour

14, Jun, 2012 @9:29 AM

Article image
Tax credits must be redesigned to meet today's needs
Some of the problems that tax credits were designed to tackle have altered, so the policy should be revisited, says Matthew Whittaker

Matthew Whittaker

27, Jun, 2012 @6:30 AM

Letters: Life on the economic precipice
Letters: At present, 58% of children living in poverty live in households where at least one adult works and the number is rising

20, Jun, 2012 @7:59 PM

Payments to tackle child poverty

Ministers propose £200 one-off payments to families failing to take up Sure Start services

Patrick Wintour, political editor

22, Jun, 2008 @11:01 PM

Article image
George Osborne increases squeeze on poor families with cuts to tax credits

Chancellor accused of abandoning Britain's poorest with cuts and freezes that will see 100,000 more children fall into poverty

Randeep Ramesh, Jill Insley and Hilary Osborne

29, Nov, 2011 @8:54 PM

Child benefits in Tory lobbyists' £50bn spending-cut plan

Rightwing groups insist the proposals are practical and will not hurt vital services

Patrick Wintour, political editor

10, Sep, 2009 @9:40 PM

Article image
Number of children living in poverty rises

The government's child poverty targets lay in tatters today as new figures showed that 2.9 million children are officially living below the breadline in the UK – up 100,000 since 2005-06

Jenny Percival and agencies

10, Jun, 2008 @9:43 AM