The coalition's cap on benefit increases will mean a surge in child poverty

Raising benefits by less than the rate of inflation is a poverty-producing policy.

Internal Treasury documents do not make for a thrilling bedtime read but a flick last night through the government’s Impact Assessment (IA) toolkit proved quite instructive. It tells us, for example, that an IA should be prepared when a proposal "involves some kind of redistribution affecting the public, private or third sector", and that an IA "must be published when a Government Bill… is introduced into either House of Parliament".

Yet on the day the Welfare Benefits Uprating Bill 2012 receives its second reading in Parliament, we still have not seen a formal assessment of the government’s decision to cut an estimated 4 per cent from the real value of key benefits over the next three years.  So, in the absence of any official statement as to how this policy will affect child poverty, we decided to work it out for ourselves.

Our starting point is the study produced by the Institute for Fiscal Studies (IFS) in October 2011 projecting child poverty rates for the UK over the next five to ten years. The picture, according to this report, looked bleak: an estimated 400,000 more children would be living in relative poverty by the end of the current parliament, while the number living in absolute poverty looked set to increase by 500,000 over the same period.  

Critically, the IFS singled out the decision to index most working-age benefits to the consumer price index (CPI) as opposed to the more generous retail price index (RPI) from 2011 onwards as the most significant policy driving child poverty upwards in the next five to ten years. But these projections do not now tell the full story. Since they were produced, the government has made other adjustments to the way it indexes benefits and tax credits, and now plans to add into this already potent brew the decision to uprate most in- and out-of work benefits, and going forward key elements of Universal Credit (UC), at a sub-inflation 1 per cent for three years.

As our new report published yesterday shows, the simple truth is that a sub-inflation uprating will be a poverty-producing policy. Delinking benefits from prices will result in a fall in the real standard of living for anyone who is reliant on the state for all or part of their income over the next three years. As a consequence, in the absence of any compensatory changes, the number of children living in absolute poverty will rise, while those children in families reliant on out-of-work benefits who already live below this threshold will see their poverty deepen further.

And alongside worsening absolute poverty rates, the relative fortunes of low income families can only deteriorate too. The government is presenting the 1 per cent uprating as ‘fair’ in light of the average earnings levels observed during the recession, as well as future public sector pay agreements. But what is conveniently obscured in this debate is that for many years prior to 2008, benefits rose at a significantly lower level than wages. In fact, the above-average earnings upratings of the last five years have had limited effect on the relative value of benefits eroded over a long period of time, showing how difficult it is to correct the damage done by year after year of under-indexation.

Nor is it clear where the equity is in pegging benefits to public sector pay rises going forward. With the Office for Budget Responsibility anticipating average earnings growth for the whole economy of between 2.2 per cent and 3.9 per cent over the next three years, the Uprating Bill will open up a gap between the poorest and the rest of the population. As a result, the minority will become further disconnected from the majority, and under these conditions, relative child poverty can but rise.

Looking at the historical picture should make us all pause for thought. Decoupling benefit levels from wages is widely recognised as the most significant policy that drove the dramatic increases in child poverty through the 1980s and 1990s, and the decision now to delink benefits from prices looks set to propel child poverty back up to levels we haven’t observed since the Thatcher years.

Given this, the Uprating Bill risks history repeating itself, with one significant difference: this time round we are likely to witness significant rises in child poverty against the backdrop of the Child Poverty Act (CPA) 2010, a law which requires the government take action to improve both the absolute and the comparative fortunes of children growing up in the UK today.

Yet three years of benefit uprating that is linked to neither prices nor average earnings will deliberately lock in both real and relative losses for low-income families, at the same time as locking them out of the mainstream.

Small wonder, then, that the required impact assessment has yet to materialise, but when it does, it will be interesting to see how the government squares the child poverty circle.

A young girl spends the half term school holiday playing in an an alleyway in the Gorton area of Manchester. Photograph: Getty Images.

Alison Garnham is chief executive of the Child Poverty Action Group

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How Donald Trump is slouching towards the Republican nomination

There was supposed to be a ceiling above which Trump’s popular support could not climb.

In America, you can judge a crowd by its merchandise. Outside the Connecticut Convention Centre in Hartford, frail old men and brawny moms are selling “your Trump 45 football jerseys”, “your hats”, “your campaign buttons”. But the hottest item is a T-shirt bearing the slogan “Hillary sucks . . . but not like Monica!” and, on the back: “Trump that bitch!” Inside, beyond the checkpoint manned by the Transportation Security Administration and the secret service (“Good!” the man next to me says, when he sees the agents), is a family whose three kids, two of them girls, are wearing the Monica shirt.

Other people are content with the shirts they arrived in (“Waterboarding – baptising terrorists with freedom” and “If you don’t BLEED red, white and blue, take your bitch ass home!”). There are 80 chairs penned off for the elderly but everyone else is standing: guys in motorcycle and military gear, their arms folded; aspiring deal-makers, suited, on cellphones; giggling high-school fatsos, dressed fresh from the couch, grabbing M&M’s and Doritos from the movie-theatre-style concession stands. So many baseball hats; deep, bellicose chants of “Build the wall!” and “USA!”. (And, to the same rhythm, “Don-ald J!”)

A grizzled man in camouflage pants and combat boots, whose T-shirt – “Connecticut Militia III%” – confirms him as a member of the “patriot” movement, is talking to a zealous young girl in a short skirt, who came in dancing to “Uptown Girl”.

“Yeah, we were there for Operation American Spring,” he says. “Louis Farrakhan’s rally of hate . . .”

“And you’re a veteran?” she asks. “Thank you so much!”

Three hours will pass. A retired US marine will take the rostrum to growl, “God bless America – hoo-rah!”; “Uptown Girl” will play many more times (much like his speeches, Donald J’s playlist consists of a few items, repeated endlessly), before Trump finally looms in and asks the crowd: “Is this the greatest place on Earth?”

There was supposed to be a ceiling above which Trump’s popular support could not climb. Only a minority within a minority of Americans, it was assumed, could possibly be stupid enough to think a Trump presidency was a good idea. He won New Hampshire and South Carolina with over 30 per cent of the Republican vote, then took almost 46 per cent in Nevada. When he cleaned up on Super Tuesday in March, he was just shy of 50 per cent in Massachusetts; a week later, he took 47 per cent of the votes in Mississippi.

His rivals, who are useless individually, were meant to co-operate with each other and the national party to deny him the nomination. But Trump won four out of the five key states being contested on “Super-Duper Tuesday” on 15 March. Then, as talk turned to persuading and co-opting his delegates behind the scenes, Trump won New York with 60 per cent.

Now, the campaign is trying to present Trump as more “presidential”. According to his new manager, Paul Manafort, this requires him to appear in “more formal settings” – without, of course, diluting “the unique magic of Trump”. But whether or not he can resist denouncing the GOP and the “corrupt” primary system, and alluding to violence if he is baulked at at the convention, the new Trump will be much the same as the old.

Back in Hartford: “The Republicans wanna play cute with us, right? If I don’t make it, you’re gonna have millions of people that don’t vote for a Republican. They’re not gonna vote at all,” says Trump. “Hopefully that’s all, OK? Hopefully that’s all, but they’re very, very angry.”

This anger, which can supposedly be turned on anyone who gets in the way, has mainly been vented, so far, on the protesters who disrupt Trump’s rallies. “We’re not gonna be the dummies that lose all of our jobs now. We’re gonna be the smart ones. Oh, do you have one over there? There’s one of the dummies . . .”

There is a frenzied fluttering of Trump placards, off to his right. “Get ’em out! . . . Don’t hurt ’em – see how nice I am? . . . They really impede freedom of speech and it’s a disgrace. But the good news is, folks, it won’t be long. We’re just not taking it and it won’t be long.”

It is their removal by police, at Trump’s ostentatious behest, that causes the disruption, rather than the scarcely audible protesters. He seems to realise this, suddenly: “We should just let ’em . . . I’ll talk right over them, there’s no problem!” But it’s impossible to leave the protesters where they are, because it would not be safe. His crowd is too vicious.

Exit Trump, after exactly half an hour, inclusive of the many interruptions. His people seem uplifted but, out on the street, they are ambushed by a large counter-demonstration, with a booming drum and warlike banners and standards (“Black Lives Matter”; an image of the Virgin of Guadalupe, holding aloft Trump’s severed head). Here is the rest of the world, the real American world: young people, beautiful people, more female than male, every shade of skin colour. “F*** Donald Trump!” they chant.

After a horrified split-second, the Trump crowd, massively more numerous, rallies with “USA!” and – perplexingly, since one of the main themes of the speech it has just heard was the lack of jobs in Connecticut – “Get a job!” The two sides then mingle, unobstructed by police. Slanging matches break out that seem in every instance to humiliate the Trump supporter. “Go to college!” one demands. “Man, I am in college, I’m doin’ lovely!”

There is no violence, only this: some black boys are dancing, with liquid moves, to the sound of the drum. Four young Trump guys counter by stripping to their waists and jouncing around madly, their skin greenish-yellow under the street lights, screaming about the building of the wall. There was no alcohol inside; they’re drunk on whatever it is – the elixir of fascism, the unique magic of Trump. It’s a hyper but not at all happy drunk.

As with every other moment of the Trump campaign so far, it would have been merely some grade of the cringeworthy – the embarrassing, the revolting, the pitiful – were Trump not slouching closer and closer, with each of these moments, to his nomination. 

This article first appeared in the 28 April 2016 issue of the New Statesman, The new fascism