Tuesday, 13 October 2015

Minister admits benefit cap will raise child poverty

A junior minister has admitted the government’s plan to cap rises in benefits will lead to 200,000 more children being in relative income poverty.

Conservative Esther McVey, parliamentary under-secretary at the Department for Work and Pensions, made the admission in response to a question in the House of Commons from MP Chris Skidmore on Tuesday.

Ms McVey said: ‘We estimate that the up-rating measures in 2013/14, 2014/15 and 2015/16 will result in around an extra 200,000 children being deemed by this measure to be in relative income poverty.’

The 200,000 figure refers to relative income, which changes over time.

Ms McVey said: ‘These impacts are not forecasts of the level of child poverty and do not indicate what will happen to trends over time. It is misleading to look at the impacts of uprating in isolation. The government is investing in tacking the root causes of child poverty through making work pay.

‘The government strongly believes looking at relative income in isolation is not a helpful measure to track progress towards our target of eradicating child poverty.’

However, campaigners Child Poverty Action Group said Ms McVey’s admission shows the government’s child poverty strategy is in ‘utter disarray.’

Alison Garnham chief executive of CPAG, said: ‘Ministers seem to be in denial that, under current policies, their legacy threatens to be the worst poverty record of any government for a generation, despite their duties under the Child Poverty Act to reduce child poverty across a basket of measures including absolute, relative and persistent poverty as well as for deprivation levels which show how well families are able to meet basic costs.’

The government’s Welfare Benefits Uprating Bill, currently going through parliament, will cap rises in a number of benefits to 1 per cent rather than the level of inflation as it is currently. Local housing allowance base rates, used to calculate housing benefit levels for private renters, will be capped at 1 per cent for two years from April 2014. Increases in most other working age benefits will also be capped at 1 per cent for three years.

Labour opposes the bill while a group of Liberal Democrat backbenchers is seeking to amend the legislation so benefits are instead increased in line with wage inflation.

Labour has tabled a series of amendments, including one saying the act should not come into force if the government’s reduction to the higher rate of income tax from April goes ahead as planned. The party is also calling for a job guarantee for anyone who has been in receipt of jobseeker’s allowance for two years.

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