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What was missing from the 2015 Budget? Anything to do with child poverty

This was a "see no poverty, hear no poverty" budget from a government in denial.

The Chancellor made claim to a truly national recovery throughout his speech but this is a ‘See no poverty, Hear no poverty’ Budget which continues to leave children and the low paid behind. 

Three statements made by the Chancellor in in his Budget speech yesterday caught my eye.

First, “Child poverty is down”.

This is notable for a couple of reasons. It’s the first time the Chancellor has mentioned poverty in a Budget or Autumn Statement speech in over three years. For a Chancellor who vowed to ensure we were all ‘in it together’ in his first Budget that’s a surprising omission. However, more strikingly, anyone who’s been paying attention knows perfectly well the outlook for child poverty is pretty bleak.

The claim that child poverty is down is true only if you ignore the impact of the Chancellor’s own policies, especially his big benefit cuts. Official child poverty statistics for the years in which benefit levels and tax credits suffered large cuts and the benefit cap and ‘bedroom tax’ were introduced (since April 2013) will be published only after May’s general election. 

The Institute for Fiscal Studies forecasts that the Chancellor’s tax and benefit decisions will lead to child poverty rising by 400,000 over this parliament and by 700,000 overall by 2020. In his first Budget, the Chancellor gave an assurance that that the policies he announced, overall, would not increase child poverty over the next two years. He’s unable to give a similar assurance for the impact of his policies over the course of this Parliament and beyond.

Second, “It’s the oldest rule of economic policy. It’s the lowest paid who suffer most when the economy fails and it’s the lowest paid who benefit when you turn that economy around.”

Rules get broken. At the moment, I imagine few people in low paid jobs feel they they’re benefiting from the recovery. Parents, especially.  They know perfectly well that the cost of a child is outstripping headline inflation, average wages, the minimum wage and benefit levels. 

The low paid who were hit by cuts to tax credits in the tough economic times are finding, in better times, that in-work benefits are still being cut. Indeed, the Chancellor’s cuts to Universal Credit, most recently at the Autumn Statement, are leading many to question whether, after all the upheaval and cost, universal credit will be capable of delivering its policy objectives of improving work incentives and reducing poverty.

Third, “we will use the resources from the bank sales and the lower interest payments and the lower welfare bills to pay down the national debt.”

This week the head of the National Audit Office bemoaned Whitehall’s failure to think through the impact of cuts. Today’s statement is a good example of that kind of myopic policy-making. All the main political parties accept that one reason why we need to end child poverty is because it damages our economy, adding pressures to public spending and wasting economic potential. So, spending cuts that create poverty aren’t cuts that the Treasury can bank – we also need to look to the other side of the ledger and factor-in the cost of poverty. Independent analysis CPAG commissioned from Donald Hirsch of Loughborough University shows the current annual cost of child poverty to be £29bn a year. This will rise sharply if poverty rises as the IFS projects.

We’re expecting the biggest rise in child poverty in a generation – a child poverty crisis – so you’d expect an urgent response, yet none appears to be forthcoming. Two-thirds of poor children live with  working parents, yet spending billions on a further rise in the personal tax allowance does little to help them as most of it is taxed away as in-work benefits are reduced. The same money channelled through children’s benefits, tax credits and universal credit would do much more for the low paid.

This is the last Budget before the general election. We’re hoping that the first Budget of the next Government, whoever is in power, sees, hears and responds to the poverty facing millions of our children.

  

 

Alison Garnham is chief executive of the Child Poverty Action Group

Photo: André Spicer
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“It’s scary to do it again”: the five-year-old fined £150 for running a lemonade stand

Enforcement officers penalised a child selling home-made lemonade in the street. Her father tells the full story. 

It was a lively Saturday afternoon in east London’s Mile End. Groups of people streamed through residential streets on their way to a music festival in the local park; booming bass could be heard from the surrounding houses.

One five-year-old girl who lived in the area had an idea. She had been to her school’s summer fête recently and looked longingly at the stalls. She loved the idea of setting up her own stall, and today was a good day for it.

“She eventually came round to the idea of selling lemonade,” her father André Spicer tells me. So he and his daughter went to their local shop to buy some lemons. They mixed a few jugs of lemonade, the girl made a fetching A4 sign with some lemons drawn on it – 50p for a small cup, £1 for a large – and they carried a table from home to the end of their road. 

“People suddenly started coming up and buying stuff, pretty quickly, and they were very happy,” Spicer recalls. “People looked overjoyed at this cute little girl on the side of the road – community feel and all that sort of stuff.”

But the heart-warming scene was soon interrupted. After about half an hour of what Spicer describes as “brisk” trade – his daughter’s recipe secret was some mint and a little bit of cucumber, for a “bit of a British touch” – four enforcement officers came striding up to the stand.

Three were in uniform, and one was in plain clothes. One uniformed officer turned the camera on his vest on, and began reciting a legal script at the weeping five-year-old.

“You’re trading without a licence, pursuant to x, y, z act and blah dah dah dah, really going through a script,” Spicer tells me, saying they showed no compassion for his daughter. “This is my job, I’m doing it and that’s it, basically.”

The girl burst into tears the moment they arrived.

“Officials have some degree of intimidation. I’m a grown adult, so I wasn’t super intimidated, but I was a bit shocked,” says Spicer. “But my daughter was intimidated. She started crying straight away.”

As they continued to recite their legalese, her father picked her up to try to comfort her – but that didn’t stop the officers giving her stall a £150 fine and handing them a penalty notice. “TRADING WITHOUT LICENCE,” it screamed.


Picture: André Spicer

“She was crying and repeating, ‘I’ve done a bad thing’,” says Spicer. “As we walked home, I had to try and convince her that it wasn’t her, it wasn’t her fault. It wasn’t her who had done something bad.”

She cried all the way home, and it wasn’t until she watched her favourite film, Brave, that she calmed down. It was then that Spicer suggested next time they would “do it all correctly”, get a permit, and set up another stand.

“No, I don’t want to, it’s a bit scary to do it again,” she replied. Her father hopes that “she’ll be able to get over it”, and that her enterprising spirit will return.

The Council has since apologised and cancelled the fine, and called on its officials to “show common sense and to use their powers sensibly”.

But Spicer felt “there’s a bigger principle here”, and wrote a piece for the Telegraph arguing that children in modern Britain are too restricted.

He would “absolutely” encourage his daughter to set up another stall, and “I’d encourage other people to go and do it as well. It’s a great way to spend a bit of time with the kids in the holidays, and they might learn something.”

A fitting reminder of the great life lesson: when life gives you a fixed penalty notice, make lemonade.

Anoosh Chakelian is senior writer at the New Statesman.