Forgotten fields. (Photo: Getty)
Show Hide image

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

Getty
Show Hide image

Will Jeremy Corbyn stand down if Labour loses the general election?

Defeat at the polls might not be the end of Corbyn’s leadership.

The latest polls suggest that Labour is headed for heavy defeat in the June general election. Usually a general election loss would be the trigger for a leader to quit: Michael Foot, Gordon Brown and Ed Miliband all stood down after their first defeat, although Neil Kinnock saw out two losses before resigning in 1992.

It’s possible, if unlikely, that Corbyn could become prime minister. If that prospect doesn’t materialise, however, the question is: will Corbyn follow the majority of his predecessors and resign, or will he hang on in office?

Will Corbyn stand down? The rules

There is no formal process for the parliamentary Labour party to oust its leader, as it discovered in the 2016 leadership challenge. Even after a majority of his MPs had voted no confidence in him, Corbyn stayed on, ultimately winning his second leadership contest after it was decided that the current leader should be automatically included on the ballot.

This year’s conference will vote on to reform the leadership selection process that would make it easier for a left-wing candidate to get on the ballot (nicknamed the “McDonnell amendment” by centrists): Corbyn could be waiting for this motion to pass before he resigns.

Will Corbyn stand down? The membership

Corbyn’s support in the membership is still strong. Without an equally compelling candidate to put before the party, Corbyn’s opponents in the PLP are unlikely to initiate another leadership battle they’re likely to lose.

That said, a general election loss could change that. Polling from March suggests that half of Labour members wanted Corbyn to stand down either immediately or before the general election.

Will Corbyn stand down? The rumours

Sources close to Corbyn have said that he might not stand down, even if he leads Labour to a crushing defeat this June. They mention Kinnock’s survival after the 1987 general election as a precedent (although at the 1987 election, Labour did gain seats).

Will Corbyn stand down? The verdict

Given his struggles to manage his own MPs and the example of other leaders, it would be remarkable if Corbyn did not stand down should Labour lose the general election. However, staying on after a vote of no-confidence in 2016 was also remarkable, and the mooted changes to the leadership election process give him a reason to hold on until September in order to secure a left-wing succession.

0800 7318496