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11 July 2014

Labour calls for OBR to monitor child poverty rates

The party says the watchdog should track the government's record after progress goes into reverse. 

By George Eaton

One of Labour’s proudest achievements in government was the reduction of 800,000 in child poverty from 3.4m to 2.6m, the lowest level since the mid-1980s. But the coalition’s unbalanced austerity programme means that this trend has gone into reverse. In 2012-13, relative child poverty before housing costs did not change, while measured after housing costs it rose by 100,000. The forecast increase of 600,000 by 2015-16 will reverse all of the reductions that took place under Labour between 2000-01 and 2010-11. 

In response, the party is calling for the OBR, the budgetary watchdog founded by George Osborne in 2010, to be given responsibility for monitoring and reporting on the government’s progress in tackling child poverty. 

Here’s the statement from shadow economic secretary to the Treasury Catherine McKinnell:

David Cameron promised to lead the most family friendly government ever. But these figures show his choices have hit families with children hardest of all, while millionaires have been given a huge tax cut.

The progress Labour made in reducing child poverty has ground to a halt under the Tories and independent forecasts say it is set to rise.

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This isn’t good enough. The Office for Budget Responsibility should be required to monitor and report on the government’s progress on reducing child poverty. This should include analysing the impact of Budget decisions on the level of child poverty.

George Osborne hasn’t made a single mention of child poverty in his last three Budget speeches. Boosting the role of the OBR to monitor child poverty would make it more difficult for governments and Chancellors to ignore the problem and the impact of their choices.

Labour’s plan to deal with the cost-of-living crisis will tackle child poverty and make work pay as we balance the books in a fairer way. We will expand free childcare, freeze energy bills, increase the minimum wage, incentivise the living wage, scrap the bedroom tax and get more homes built.

Given how crucial the reduction of child poverty is to spreading opportunity, and the coalition’s well-noted tendency to manipulate statistics, it’s a welcome proposal. But with all the forecasts pointing in the wrong direction for the government, it’s unlikely that Osborne will accept this extension of the OBR’s remit. Labour has previously sought to turn the Chancellor’s creation to its advantage by inviting it to audit its tax and spending commitments: a proposal he rejected. 

In the meantime, the party has carried out a new analysis of the Households Below Average Income (HBAI) statistics, which show that families with children have suffered larger falls in their living standards than those without. A couple with two children aged 5 and 14 are on average £2,132 a year worse off in real terms since 2009-10, while a couple with no children are £1,404 a year worse off. A single person with two children aged 5 and 14 is on average £1,664 a year worse off in real terms since 2009-10, while a single person with no children is £936 a year worse off.

Further analysis found that material deprivation measures of child poverty are on the rise. There are now 300,000 more children living in families that can’t afford to keep their house warm – a total of 1.7m  – 400,000 more living in families that can’t afford to make savings of £10 a month – now a total of 6m – and half a million more living in families that can’t afford to replace broken electrical goods – now a total of 3.6m.