Cuts to child tax credit result in more UK children thrown into poverty

By agency reporter
January 15, 2012

Shocking statistics provided by the End Child Poverty campaign show that nearly 60 per cent of children living in poverty have at least one parent who works, compounding the belief that too many jobs in the UK are poorly paid.

On average throughout the UK, one in five (20.9 per cent) children are classified as below the poverty line (before housing costs). In some areas of large cities, this rises to over half.

This is true in one whole local authority (Tower Hamlets), as well as in the parliamentary constituency of Bethnal Green and Bow. In Islington, in Manchester and in 19 parliamentary constituencies, at least four in ten children are in poverty, says the campaign's report - which covers England, Scotland, Wales and Northern Ireland.

At a more local level, there are even more serious concentrations of child poverty: in 100 local wards, between 50 per cent and 70 per cent of children face poverty, according to detailed statistical analysis on the End Child Poverty campaign website.

The government appears again unable to deal with poverty levels in some of the most deprived areas of the country, say campaigners.

The commitment of the government to help children in the areas analysed by the report is also brought into question as cuts are likely to make many families as much as £1,250 a year worse off by 2015.

Britain continues to be socially segregated with the "life chances of millions of children damaged by poverty and inequality'' claimed ECP campaign executive director Alison Garnham, speaking to the BBC.

The ECP data has been compiled using 'National Indicator 116', an official indicator of child poverty at local level. A full description of this indicator can be found at the Inland Revenue site (*.PDF Adobe Acrobat file):

The indicator tries as far as possible to use tax credit data to replicate the official national indicator for child poverty, which is based on the Family Resources Survey and reported in the Households Below Average Income (HBAI) survey as children in households with below 60 per cent median income before housing costs.

For children whose parents do not work, it counts poverty as being in a family claiming out of work benefits. This shows more children as being in poverty than the survey data, since about a quarter of children whose parents are out of work nevertheless have incomes above the poverty line.

The latest HMRC data reporting this indicator are for August 2009. However, the Centre for Research in Social Policy has estimated the change from the 2009 data in the number of children in each area in out of work households in mid-2011, and added this number to the 2009 estimate. It has based this change on regional data on the percentage of children in workless families in the Labour Force Survey 2011. The percentage point change in this figure for a whole region is applied to the percentage of children assumed to be in families on out of work benefits in each local authority, constituency and ward in the region.

The resulting increase in the number of children in out of work households is taken as an estimate of the rise in the number in out of work families, and added to the 2009 total, to calculate a new estimate of child poverty for 2011.

While this method does not pick up differences in the change in levels of worklessness among different local areas within one region, it gives a more up-to-date estimate of child poverty than the 2009 figures, says the End Child Poverty campaign.

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