Government policy

by Stephen Crossley and John Veit-Wilson

On Monday 21st of January, in response to a question about the government’s commitment to reducing child poverty, the Secretary of State for Work and Pension talked of a:

‘full public consultation about a better way to measure real child poverty that the coalition Government will set and measure ourselves against. Income will be part of it, but not the dominant part ...’ (Hansard, vol. 557, no. 100, p73)

MPs have voted to approve the controversial capping of benefit increases over the next three years. The Welfare Benefits Up-Rating Bill, which has been given a second reading in Parliament, provides for an increase of just 1 per cent for most working-age benefits, child benefit and certain tax credit elements in 2014-15 and 2015-16, rather than being uprated in line with inflation (in addition to similar arrangements already announced for 2013-14). Carers' benefits and certain disability-related benefits will be exempt, along with pensions.

Most benefits and tax credits for working-age people will be cut in real terms for three years in a row from 2013-14, under plans announced by the Chancellor in his 2012 Autumn Statement on the public finances.

The Chancellor admitted he would fail to meet his pledges on public borrowing as a result of worsening prospects for economic growth. Forecasts of growth from the independent Office for Budget Responsibility were revised down significantly for every year between 2012 and 2016. As a result, the Chancellor said, the government's 'austerity measures' would have to be extended until at least 2017-18 – three years longer than originally promised.

In overall terms, however, the measures outlined in the Autumn Statement were neutral in their effect on the public finances. Instead the Chancellor chose to make significant changes in the way spending cuts will fall on different groups and areas of spending.

A former coalition minister has condemned the government's plan for a benefits cap as 'immoral'. Liberal Democrat Sarah Teather MP accuses the government of seeking to 'gain popularity at the expense of children's lives' and of demonising claimants.

Teather, who was a children's minister until sacked in September 2012, made the remarks in an interview with the Observer newspaper. From April 2013 the government will cap total household benefits at £500 a week for a family and £350 a week for a single person with no children.