Unintended consequences or not, Budget cuts for the very poorest will boost fuel poverty and undermine efforts to tackle climate change. Households in fuel poverty are already concentrated among exactly those families where the cuts will hit hardest. Worse, DWP Minister Steve Webb has not ruled out cuts in weekly Cold Weather payments this autumn. Media reports put Winter Fuel Allowance in the frame. Yet regressive Budgets sustain the high energy use of the most well off, widening the fuel divide between the poor and well-off.

The more unequal our society, the more remote are our CO2 reduction targets. Yet yesterday’s IFS report shows that the very poorest families with children lose more from the June Budget than any other group – facing a 5% cut in their total income. Yet the lowest third of households by income account for over 90% of those in fuel poverty in England.  Read more »

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Today’s FT features an opinion piece from Nick Clegg, where he sets out his refutation of the IFS’s analysis. The Government line seems to have changed from yesterday (when the Financial Secretary to the Treasury equated fairness with growth), as the Deputy Prime Minister is now arguing that fairness is about more than a ‘purely numerical’ view, and that distributional analysis only tells part of the fairness story.

But, as with previous attempts, this argument does not stack up – as I set out below. Read more »

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The Deputy Prime Minister has joined his Treasury colleague in maintaining that the IFS analysis of the distributional impact of the Budget is selective and partial. This is simply wrong. The Budget documents clearly state that only ‘two-thirds‘ of the benefit and tax credit changes are modelled in their analysis of the Budget’s impacts.

In contrast, IFS models all of them (using government data). This includes cuts to Housing Benefit, falls in the relative value of benefits after 2012/13 (as a result of CPI uprating), cuts in DLA and various cuts in Tax Credits. This is why their analysis shows the poorest losing most – all of the cuts the Treasury chose to leave out are highly regressive.

Unsurprisingly, IFS have told Channel 4 News they are ‘surprised by criticism from govt, we’re essentially doing exactly same as they did in Budget annexe, but incl more measures not less’.

   Filed under: Budget, Child poverty | 2 Comments »

This morning’s Today interview with Financial Secretary Mark Hoban provided a revealing insight into the Government’s definition of fairness. In response to an IFS analysis (that is based on DWP figures of the impact of Housing Benefit cuts, and HMT’s figures for how social security changes – specifically indexing benefits with CPI – will affect poor households in 2013/14) he informed us that the IFS’s work, which in fact takes account of the majority of the third of social security changes that the Budget’s distributional analysis chose to exclude, is ‘selective’ as it ‘ignores the impacts of economic growth’.

If fairness and economic growth are the same thing, then Britain has been an increasingly fair society for the vast majority of the post-war period and the post-recession decade in 1980s  (when unemployment hit three million, and the number of children living in poverty rose from one and a half million to three million) saw a positive fairness rise. By this definition the Government need not even bother with policies on social mobility and and the child poverty targets might as well be scrapped – all that fairness will require is a non-recessionary economy. Read more »

   Filed under: Budget, Child poverty | 5 Comments »

Today End Child Poverty reports on new research, commissioned from the IFS, that shows definitively what many others have highlighted – the cuts announced in the Budget will hit families and the poorest the hardest.

As we showed immediately after the Budget, the Chancellor’s claim that the spending changes he announced were ‘progressive’ has always been contentious – significantly the Treasury’s modelling did not include a third of social security changes, including cuts to Housing Benefit and Disability Living Allowance, and only changes up until 2012/13 were considered.

This IFS research puts the Budget’s regressive impact beyond doubt: the poorest will be hit more than many of the richest in cash terms let alone as a percentage; poor and middle income families with children lose out more than any other household types and the very poorest families with children lose more than any other groups – with 5% of their total income being cut. Read more »

   Filed under: Budget, Child poverty, Welfare | 3 Comments »

Hidden amongst the barrage of cuts announced in the June Budget was a further extension in the work requirements applied to single parents. The last Government had already compelled those with children aged seven and over to seek work from this October. The Coalition announced that it will bring down the age to 5, reckoning that this will save £380 million, and see 100,000 more parents in work.

The Coalition seems to follow the last Government in believing that single parents are not in work because benefit conditions are not tight enough. But we know that nine out of ten single parents want a paid job; the problem is that the jobs they could fit with their family life aren’t out there. Read more »

   Filed under: Labour market, Work-life balance | No Comments »

The Guardian tells us today that Matthew Elliot of the TaxPayer’s Alliance is to head up the campaign for a no vote in next May’s referendum on the Alternative Vote.

The TUC has no policy either way on AV as yet, though we were asked to stimulate a debate on electoral reform at our last Congress. I suspect that this announcement is unlikely to aid the no campaign in unions.

But what struck me in the article was this enconium from Conservative peer, Rodney Leach – who as Wikipedia tells us is “chairman of the eurosceptic think-tank Open Europe and a noted climate change sceptic.^{” Read more »}

   Filed under: Electoral reform, Public services | No Comments »