'Budget locks in poverty producing cuts' say child poverty campaigners

19 March 2014
  • Lower income families continue to shoulder burden of 'austerity'
  • Family living standards face continued crisis as ‘cost of a child’ rises faster than wages, inflation and family benefits

Responding to the UK Budget Statement today (19th March) John Dickie, the head of the Child Poverty Action Group (CPAG) in Scotland John Dickie said;

 “This Budget locks in misguided policies that are already set to push up to 100 000 more children into poverty in Scotland alone. The Chancellors so called 'cap on welfare' introduces a rationing of basic support for children, working families and disabled people. It ties the UK government’s hands on some of the most effective actions it can take to reduce child poverty, locking-in cuts for the poorest families in Scotland and across the UK. What children really need is the same protection that have been given to pensioners".

In response to increases in the personal tax allowance Mr Dickie pointed out;

“Raising the personal tax allowance does little good for many of the lowest paid workers. Many don’t pay tax anyway, while others keep just 15p in every extra pound because in-work benefits like housing benefit get withdrawn. Our call to increase housing benefit earnings disregards, so they get the same full gain as higher earners, have yet again fallen on deaf ears."

The Child Poverty Action Group's disappointment comes after analysis it published yesterday (18/03/14) highlighted the risks of the Chancellor’s new AME spending cap. The analysis, commissioned from the Institute for Social and Economic Research (ISER) at Essex University, the budget announcement on capping Annually Managed Expenditure (AME) could drive up UK child poverty rates.

The ‘AME cap’ sets an annual ceiling on overall spending for working age support through tax credits and benefits for low paid workers, carers, disabled people and single parents.

The analysis shows that:

  • Income transfers from this kind of support are an essential part of preventing high poverty rates in the EU countries with the lowest child poverty.
  • The UK leaves tax credits, social security and family benefits to do much more of the heavy lifting than in other EU countries where progressive taxation and structural factors of the economy play a larger role.

Mr Dickie added;

"All the EU countries with much lower child poverty rates than us use income transfers for poverty prevention. If they can do so much better for their children, then so can we. Instead George Osborne’s budget reveals how the poorest families are the worst affected by the government’s austerity measures. His fiscal strategy could be called ‘The Great Regression’ given how the poorest are so hard hit compared to most of the wealthier half of the population. The legacy this government is set to leave is of rising child poverty and budgets that have made the poor much poorer, whilst actually making many wealthy people even wealthier still.”