Tax and benefit changes will increase child poverty by 9 per cent

Through using IPPR's tax/benefit model, IPPR finds that by 2018, around 16 per of the British people - that's 10.3 million people - will be living below 60 per cent of median income, before housing costs - the standard measure of poverty

The model allows IPPR to project forward the level of tax and benefits outlined in the Autumn statement. It can also model household earnings using (OBR) projections of average earnings growth. The analysis shows that the combined impact of the tax and benefit reforms is likely to hit those on lowest incomes, especially families with children and lone parents, the hardest. As a result, the real-terms cuts to the value of tax credits and other benefits will lead to a sharp increase in poverty levels.

IPPR's analysis shows that after the changes:

4.8 million households and 7.8 million adults will be in poverty
2.8 million households and 4.6 million adults will be in 'severe' poverty.

IPPR's Economic Analyst, Spencer Thompson, said:

"These are shockingly high poverty figures and they raise serious questions about how the government is choosing to target its deficit reduction strategy.

Although the pressure on public spending is tight, our analysis shows that the poorest and most vulnerable are being asked to bear a disproportionate amount of the pain as a result of the government's austerity programme".

There's already been an outcry from campaigners after the government admitted that an extra 200,000 children will fall into poverty because of their 1 per cent up-rating of benefits and other changes. Our analysis shows just what that will mean for overall child poverty figures.

In total, 2.5 million children will be living in poverty by 2018
With 1.3 million of them below the 'severe' poverty line.
The increase over the next five years in child poverty will be nearly 9 per cent.

Spencer Thompson added:

"We have to question whether in its attempts to restore the public finances the government should be introducing tax and benefit reforms which have the effect of increasing the number of children in poverty to such an extent."

Notes to editors:

IPPR's new report Analysis of Tax and Benefit Changes in the Autumn Statement can be found here.

Contacts:

Tim Finch, 0207 470 6110, t.finch@ippr.org

Tessa Evans, 0207 470 6154, t.evans@ippr.org