Poorest children losing out most due to coalition budget

By staff writers
August 25, 2010

Research commissioned by the Institute for Fiscal Studies shows that the coalition government’s emergency budget has hit families with children the hardest. Poorest families are set to lose most.

The research, published this morning (25 August) calls into question the government's repeated commitments to “fairness”. The End Child Poverty campaign described the findings as “shocking”.

It contradicts the claim of the Chancellor of the Exchequer, George Osborne that “the people at the bottom of the income scale will pay proportionately less than the people at the top”.

The research differs from the Treasury’s own modelling in several ways. It takes into account the impact of all the budget’s changes up to 2014. It analyses the June 2010 budget changes separately from those announced previously. And it includes changes to Housing Benefit and Disability Living Allowance.

The researchers, James Browne and Peter Levell, conclude that “the measures announced in the June 2010 budget are regressive as they hit the poorest more than the seventh, eighth and ninth deciles in cash, let alone percentage, terms”.

They say that families with children lose more than pensioners or other household types in all except the top three income groups. In addition, the poorest families with children lose more than any other group.

The Chief Secretary to the Treasury, Danny Alexander, claimed last month that the budget would have “no negative impact on measured child poverty”.

But the new analysis suggests that as a result of the changes announced in the June budget, families in the bottom income decile are set to lose over five per cent of their income, compared to less than one per cent for non-pensioner households without children in the top decile.

“The coalition has committed to ending child poverty by 2020, but its cuts are hitting the poorest families hardest,” said Fiona Weir of the End Child Poverty campaign, “It’s not fair that children should have to pay for the cuts and shocking that the poorest families are bearing the brunt of them”.

She added, “The coalition must re-consider its cuts, including changes to Housing Benefit and uprating benefits. The spending review will need to show clearly how the government will deliver on the commitment to ending child poverty, ensuring that cuts fall on those most able to pay”.


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