Benefit changes to hit poverty, report claims
More than a million children and adults will be pushed into poverty by 2013 according to a report from the Institute for Fiscal Studies.
The report, funded by the Joseph Rowntree Foundation, also claimed that the net effect of the government’s tax and benefit changes will have an adverse affect on the number of people in poverty in the long term.
Around 600,000 children and 800,000 working-age adults will fall into poverty over the next two years as median income is expected to fall by 7 per cent in real terms, creating the largest three-year drop for 35 years.
The report said that the introduction of universal credit as part of the government’s welfare reforms would ease poverty by 2021. However, this would be offset by other proposed changes to the tax and benefit system.
By 2021, almost one in four children in the UK is expected to be classed as living in poverty, according to the study. The Child Poverty Act targeted rates of 5 per cent absolute poverty and 10 per cent relative poverty when it was passed in 2010.
James Browne, one of the authors of the report, said: ‘The previous government significantly increased spending on benefits and tax credits for families with children, and child poverty fell by nearly a quarter between 1998 and 2009, but this was still not enough for the government to hit its child poverty targets.
‘The Child Poverty Act imposes even more stringent targets in a much more constrained fiscal environment. Even if there were an immense increase in the resources made available, it is hard to see how child poverty could fall by enough to hit this supposedly legally binding target in just nine years.
‘If the government disagrees, then it should set out concrete suggestions about how it will achieve the targets, ideally backed up by quantitative modelling similar to that in our report.’
The report comes as the coalition’s Welfare Reform Bill goes through the House of Lords this week.