Government policy

The government's decision to change the way benefits and tax credits keep up with rising prices will cost the typical family with children £614 a year, says a think-tank analysis.

In the 2010 Budget the Chancellor announced that from April 2011 the uprating of benefits, tax credits and public service pensions would be based on the consumer prices index (CPI) rather than the retail prices index (RPI) - typically producing a lower figure. The think-tank report looks at what this change will mean for family budgets in the five years after the introduction of the new universal credit.

The UK’s wealthiest people could be asked to pay more tax for a limited period, under a suggestion from the Deputy Prime Minister. He said people of ‘very considerable’ wealth should contribute more in order to preserve social cohesion.

Nick Clegg was being interviewed by the Guardian newspaper ahead of the Liberal Democrats’ annual conference. He suggested new taxes should be drawn up going beyond his party’s existing proposal to impose a ‘mansion tax’ on properties worth more than £2 million. The new tax would also fall on wealth, rather than income. He said:

‘If we are going to ask people for more sacrifices over a longer period of time, a longer period of belt tightening as a country, then we just have to make sure that people see it is being done as fairly and as progressively as possible... The action is making sure that very high asset wealth is reflected in the tax system in the way that it isn’t now.’

The Europe 2020 project has so far failed to promote coherent anti-poverty strategies, campaigners say. And the UK is ranked below the average on its approach to most poverty and social exclusion issues.

The European Anti-Poverty Network has looked at all the available reports submitted by member countries on progress towards the Europe 2020 goals (to reduce poverty and/or social exclusion by at least 20 million by 2020). They then rank countries on issues such as the effectiveness of policies to tackle child poverty, and measures to ensure an adequate minimum income and social protection.

Improved parenting is currently often advocated as the best route to improve outcomes for children and, explicitly, as a better alternative than reducing poverty. Past academic research has found strong links between poverty and children’s achievement and, operating both separately and relatedly, links between parenting and outcomes. By including elements of parenting and family relationships in the Poverty and Social Exclusion Survey, the PSE: UK team aims to provide evidence about the relationship between poverty and aspects of parenting that have received significant recent political attention but which, as yet, have been the subject of limited empirical research.