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Government policy
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21/03/2012
The impact of the Budget on low income households
The Chancellor’s annual budget statement contained a number of measures, many of which would affect the living standards of those on the lowest incomes. The key announcements contained in the Budget Report 2012 are as follows:
Tax changes
The personal allowance for Income Tax will increase by £1,100 in 2013/14, with some of this increase passed on to higher rate tax payers. The higher personal allowances for those over 65 are to be frozen and then phased out. The top rate of income tax is to be cut to 45p from 2013/14 and some tax loopholes closed. Analysis of the budget (by the IFS and Resolution Foundation – see below) shows that maintaining tax credit levels is more effective at helping those on lowest incomes than raising the tax threshold.
Child Benefit
Category: News stories -
17/03/2012
Will raising the tax threshold reduce UK poverty?
The Coalition government risks repeating the mistakes of the previous Labour government by focusing too much on tax and benefit incentives as the only solution to poverty, argues a budget briefing from the Joseph Rowntree Foundation, What will Budget 2012 Mean for UK Poverty? The briefing also argues that while, taken in isolation, the impact of the Coalition government’s aim to raise the tax threshold to £10,000 could help those on low incomes, it must be seen in the context of overall tax and benefit changes.
The briefing notes that for families with children the raising of the income tax threshold by £1,000 in April 2011 more than outweighed the gains created by freezing child benefit, reducing tax credits and reducing child care reimbursement.
The briefing draws on evidence from the organisation’s previous research to show how potential policy decisions in the Budget would affect poor places and people in the UK.
Category: Reports -
15/03/2012
Government says disability benefit reforms are justified
More than one third of the 141,100 people going through incapacity benefits reassessment have been found to be fit for work, according to the Department for Work and Pensions (DWP). The remaining 63 per cent of claimants were entitled to Employment and Support Allowance (ESA):
Thirty-four per cent were placed in the Work Related Activity Group, where they will receive personalised help and support to help them prepare for a move into suitable work in the future. Twenty-nine per cent were placed in the Support Group and will receive unconditional financial support and will not be expected to work.‘These first figures completely justify our decision to reassess all the people on incapacity benefits’, said Employment Minister Chris Grayling. ‘To have such a high percentage who are fit for work just emphasises what a complete waste of human lives the current system has been.’
Category: News stories -
13/03/2012
Welfare reforms could push 250,000 children deeper into poverty
The government’s new Universal Credit will hit poorer working mums the hardest, according to a report by the charity Save the Children. The report, Ending Child Poverty: Ensuring Universal Credit Supports Working Mums, argues that the potential impact of the new welfare system, which is due to replace tax credits and most benefits from 2013, risks making life harder for some families.
It identifies three main areas of concern:
insufficient earnings disregards for working mothers lack of support for childcare costs Universal Credit payments will be withdrawn too quickly.Without changes in these areas, it argues, the scheme’s aims of making work pay by supporting parents into work and of reducing child poverty could be undermined.
Category: News stories -
11/03/2012
Central London primary school to lose half its pupils
A primary school in London’s most affluent borough is set to lose half its pupils as a result of the government’s benefits cap, according to a report in the Observer.
The school, St Cuthbert with St Matthias Church of England school in Kensington and Chelsea, the country’s richest borough, is making plans for the loss of up to 100 pupils in the wake of the government’s benefits cap.
The school’s headteacher, Stephen Boatright, said that children from six families had already moved to live as far away as Nottingham and Hull. He said schools in Enfield, north London, where the costs of private accommodation were lower, were already taking in huge numbers of children.
The £500-a-week benefits cap, which is due to be implemented in 2013, is expected to leave around 130,000 families across the capital unable to pay their rent.
Category: News stories -
08/03/2012
Coalition ministers clash over child poverty
In a speech to the think-tank ResPublica, the Children’s Minister Lib Dem MP Sarah Teather argued that ‘those who suggest that income plays no part in poverty are wrong’.
This appeared directly to contradict an earlier statement by the Secretary of State for Work and Pensions, Iain Duncan Smith (see Iain Duncan Smith rejects benefits as way to tackle poverty) that ‘tackling child poverty by boosting family income through benefits is a narrow approach’.
Category: News stories -
01/03/2012
ESRC research projects on child poverty identify barriers to mobility
Current policies are unlikely to meet child poverty targets, according to a summary of research projects by the Economic and Social Research Council, Child Poverty Casts A Long Shadow Over Social Mobility. This ESRC Evidence Briefing, one of a series on social mobility, provides a detailed summary of the findings of a number of current research projects on child poverty. The research consistently identifies significant detrimental outcomes for children living in poverty and key barriers to moving out of poverty.
Category: Reports -
01/03/2012
PSE: UK response to the Field Review consultation
In Tackling Child Poverty and Improving Life Chances: Consulting on a New Approach, the PSE: UK research team has responded to the consultation on the Field Review’s report, The Foundation Years: Preventing Poor Children Becoming Poor Adults. The response welcomes the emphasis on early years in the Field report but is critical of key aspects of the report, arguing that key elements of the proposed strategy are ‘narrow, partial and highly likely to be ineffective’.
Category: Reports -
29/02/2012
Welfare Reform Bill passed
The government’s highly controversial Welfare Reform Bill was finally passed by the House of Lords on 27 February 2012 after peers dropped their final resistance to the controversial measures. The Bill, hailed as ‘historic’ by the Prime Minister, aims to save £18 billion from the annual welfare bill and overhauls most of the benefit system.
Key measures include:
Category: News stories -
23/01/2012
Housing benefit cap will hit more households
Estimates of the numbers expected to be affected by the government’s Housing Benefit Cap have risen in an updated impact assessment by the Department for Work and Pensions, Impact Assessment for the Household Benefit Cap. The latest estimate is that the £26,000 benefit cap will reduce the incomes of 67,000 households, covering 90,000 adults and 220,000 children, in the year 2013/14. This is an increase on the government’s previous estimates of 50,000 households. Benefits for these households are expected to reduce on average by around £83 per week. Nearly 20 per cent of those households losing benefit will lose more than £150 per week.
The modelling suggests that, in the absence of any behavioural response to the policy, the numbers of households affected will rise to 75,000 in 2014/15.
Category: Reports
