BUDGET 2017: NEW LANGUAGE BUT MORE THIN GRUEL FOR STRUGGLING FAMILIES

March 8, 2017

Responding to today’s Budget, Child Poverty Action Group Chief Executive Alison Garnham said:

“The Budget may have put the next generation first in words, but it was silent on the huge rises in child poverty projected by the Institute for Fiscal Studies (1) over the next five years. Nothing does more to damage the childhoods and life chances of our children than poverty.

“The language may have changed from JAMs to Ordinary Working Families, but the result still was a thin gruel Budget for parents trying to get on– the very people the Prime Minister has said she would prioritise. Cuts to universal credit (2) have left it hanging by a thread but there was no move today to rescue it for low earners. That’s a problem that’s going to get worse every day it goes untackled. 

“Families with children are highly exposed to rising costs, stagnating wages and cuts to key benefits and will be pretty disappointed that this Budget doesn’t give them the help, the breathing space, they are looking for. 

“Last week the IFS projected that the number of children in relative poverty will rise by 1.2 million to 5.1 million by 2021-22 due to real-terms cuts in tax credits and work allowances. The question arising from today’s Budget is, will the Government bring forward policies to avert the projected increase in child poverty or will it plough on with cuts that are badly damaging working families?”

(1) The IFS analysis is here https://www.ifs.org.uk/publications/8957 

(2) New analysis by the Child Poverty Action Group and IPPR shows that as a result of the cuts made to universal credit, on average:

  • couples with children will be £960/year worse off
  • lone parent families will be £2380/year worse off
  • families with two children will be £1100/year worse off
  • families with three children will be £2540/year worse off
  • single working-age people without children will be £220/year worse off
  • pensioner couples will be £40/year worse off

The government has argued that work incentives have improved in universal credit because of the reduction in the taper rate. However, our new report finds that, even if we account for this, for many families the rewards from work have been reduced considerably, and for single parents the incentives to move into mini-jobs has been reduced by the work allowance cuts.

CPAG press contact: Jane Ahrends on 0207 812 5216 or 07816 909302