PM promises more pain for children and families

June 25, 2012

Responding to the Prime Minister’s speech today on welfare, Alison Garnham, Chief Executive of Child Poverty action Group, said:

“If this is the future direction of welfare policy it leaves in tatters the PM’s pledge to be the most family friendly government, to make progress on child poverty and to ensure the greatest burden of deficit reduction falls on the broadest shoulders.

“It makes no sense to try to drive a wedge between the working poor and families out of work, when the reality is that families with children move in and out of work due to insecure and temporary work - they are the same people just at different times in their life.“The numbers claiming unemployment benefit are still rising, It’s time this government rolled up its sleeves and got to work on the millions of jobs and the millions of affordable homes Britain is lacking.

“It beggars belief that British people were able to do this after the Second World War when our debt was far worse, but today we are told we must cut instead of build.”

ENDS

Notes to Editors

  • Pledge on families

One of David Cameron’s headline election pledges during the 2010 election campaign was to “make Britain the most family friendly country in Europe”. Yet the cuts to welfare announced by the Coalition so far, and the further cuts mooted in today’s speech, are mainly targeted largely on families with children, especially low income families. Meanwhile the highest earners, most of whom do not have children living with them, have been specially favoured with income tax cuts.

  • Pledge on poverty

The Coalition Agreement included a commitment to the targets in the Child Poverty Act; and in October 2007 David Cameron said in a speech to an audience at Chance UK in North London: “We can make British poverty history; and we will make British poverty history”. However, analysis by the IFS indicates that child poverty is set to rise by 400,000 by 2015, this is another pledge that looks set to be broken (http://www.ifs.org.uk/comms/comm121.pdf).

  • Pledge on fairness and deficit reduction

At the time of the Spending Review in October 2010, both David Cameron, and Chancellor, George Osborne, promised that “the broadest shoulders should contribute the most” to deficit reduction. However, the Treasury’s own analysis has shown that this is another pledge that has been broken. In 2013/2014 every household in the bottom half of the income distribution will lose a larger proportion of their income from tax, tax credit and benefit changes than 4 out of 5 households in the top half. See Chart B.2 in the Annexe B to the Budget: Impact on Households (http://cdn.hm-treasury.gov.uk/budget2012_annexb.pdf). The same unfair pattern can also be seen for 2012/13, as shown in chart 1.B from the Treasury’s assessment of the Impact on Households published at the Autumn Statement in 2011 (http://cdn.hm-treasury.gov.uk/as2011_distributional_analysis.pdf).

  • Incorrect and misleading example of families in Cameron’s speech

The comparison in David Cameron’s speech between a workless family with 4 children, and a couple earning £24,000 in total (after tax) and saving up to have children is inaccurate, misleading and potentially harmful (as it may lead to working families incorrectly believing that they can get no support through tax credits and for their housing costs). If the couple who are working had 4 children, lived in private rental and paid for childcare, then their low earnings would mean they are eligible for:

  • Child benefit
  • Child tax credit
  • Childcare credit component of tax credits
  • Working Tax credit
  • Housing Benefit
  • Council Tax benefit

With childcare costs of around £300 per week, and rental costs of around £300 per week (both typical amounts for many parts of the UK) then it is highly likely that even after the tapers are applied the in-work couple would still receive more in benefits in total than then benefit cap of £26,000. The kind of working couple used in David Cameron’s example is therefore likely to be eligible for more support than the family who are not working if they also have the same number of children. This is precisely the opposite of what David Cameron claimed.

  • The bogus ‘Poverty plus a pound’ argument

The ‘poverty plus a pound’ argument that David Cameron uses in his speech is a straw man that has been thoroughly refuted by analysis by the Institute for Fiscal Studies. The IFS found that if the relative low income poverty line (currently 60% median income) was set at anywhere from 43% to 100% of median income there would have been reductions in child poverty since 1999. This means that it was not just the 1.1 million children taken out of relative poverty that were helped, but that millions of other children were helped too in households whose poverty was made much less severe than previously, or who have been lifted even higher above the poverty line than they were previously. Furthermore, the last government also said it had a ‘work first’ approach to child poverty and had a broad strategy including initiatives such as Sure Start, free nursery places and investment in education – such as with the EMA. So it is another straw man to ascribe to any of the main parties, or any campaigners on child benefit the notion that they believe the only policy needed is income transfers. For further fact correction on the targets and requirements of the Child Poverty Act, see this briefing:

http://www.cpag.org.uk/sites/default/files/Child%20poverty%20-%20the%20facts%20%28June%202012%29.pdf

  • CPAG is the leading charity campaigning for the abolition of child poverty in the UK and for a better deal for low-income families and children.
  • CPAG is the host organisation for the Campaign to End Child Poverty, which has over 150 member organisations and is campaigning for public and political commitment to ensure the goal of ending child poverty by 2020 is met.

 

 

For further information please contact:

 

Tim Nichols

CPAG Press Officer

Tel. 020 7812 5216 or 07816 909302 

tnichols@cpag.org.uk

www.cpag.org.uk