8 Jul 2015

Responding to the Chancellor’s budget delivered to Parliament today, Matthew Reed, Chief Executive of The Children’s Society, said:
“Far from introducing a ‘one purpose, one policy, one nation’ as the Chancellor boasts, the Government today has split the nation. Today’s budget is a disaster for low-income working families. 

“The Chancellor has said this is a budget for working people, but he has hammered the hopes of millions of children living in poverty. Today’s budget was all about numbers — not people. It fails to provide a route out of poverty for families that are already struggling to make ends meet. The Chancellor may declare this a ‘budget for working people’, but the hard truth is, work still won’t pay for the poorest families.

“The Government’s announcement that it will slow welfare cuts will make little difference to the millions of children who are living in poverty. Their families will still lose the critical support that tax credits give to make ends meet and provide their children with the basics of life. By 2020, government plans show it will have cut £13 billion a year.”

On minimum wage rises and tax credits cuts “The rise in the national minimum wage is a good step in cutting the welfare bill but does nothing to help children in poverty.
“The Government’s aim to create a ‘high wage, low tax, low welfare society’ makes it impossible for parents to get the in-work support they need. This punishes the country’s poorest working families. Without this vital safety net of tax credits, work won’t pay and children will suffer. This is also true under Universal Credit, where families will be trapped in poverty unless the Government agrees to a rise in the work allowance. But, work allowances have suffered the biggest cuts today, with £3.4bn reduction in 2020 compared to current projections. This is going to make it much harder to make work pay for low income families.

“Increasing income only, means a family moving to a higher minimum wage from next year will lose almost all gains as a result of losing some of the benefits they need. The Government must guarantee that children’s benefits and tax credits have the same protection provided for the basic state pension, so they at least rise in line with inflation.”

“The announcement of to limit child tax credits to two children is effectively a two child policy for the poorest families.” 

On increasing income tax threshold

“Increasing tax allowances for families in poverty is simply the Government giving with one hand and taking away with the other. While raising the personal allowance may appear to help, hundreds of thousands of working families will lose most of any gain through reductions in their benefits cancelling any advantage that increased tax allowances would bring, further cuts announced today will come on top of this. This is simply not the best way to help low-income working families. It’s vital that benefits keep pace with the cost of living to protect the most vulnerable.”

On reducing the benefit cap

“We know that children are the most affected by capping benefits. So reducing it further will push even more children into poverty.  To make matters worse the Government will no-longer be accountable to these children – having announced last week they will abolish an income-related measure of child poverty.
“Far from ‘the broadest shoulders carrying the greatest burden’ as the Chancellor said, the truth is the weakest now bear the heaviest burden.”

Ends

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Notes to editors:

  • To see the Summer Budget in full, visit the Gov.uk website
  • 3.7 million children are living in poverty according to the latest Household Below Average Income figures with 200,000 more children living in severe poverty and more children living in low income working households (https://www.gov.uk/government/statistics/households-below-average-income-19941995-to-20132014 )
  • Children are said to be living in relative poverty if they are in a family living on less than 60% of median income.
  • Not only is the Government abolishing the relative poverty measure it is also abolishing measures around absolute and persistent poverty.

The Children’s Society has helped change children’s stories for over a century. We expose injustice and address hard truths, tackling child poverty and neglect head-on. We fight for change based on the experiences of every child we work with and the solid evidence we gather. Through our campaigning, commitment and care, we are determined to give every child in this country the greatest possible chance in life.