Child Benefit cuts

via ToUChstone blog: A public policy blog from the TUC by Richard Exell

Today’s [30 December 2012] new TUC report – Child Benefit: a bad case of neglect? – spells out the effect on families of the government’s Child Benefit freeze followed by the 1 per cent cap in increases. By the end of 2015, a family with two children will have lost a cumulative total of over £1,000, compared with the policies on cost-of-living increases the government inherited from its predecessor.

In 2013-14 alone they will lose £234 – a time when the Office for Budget Responsibility expects average earnings to rise 2.2 per cent, while CPI inflation will be higher, at 2.5 per cent. Child Benefit provides another example of the Coalition inheriting the mantle of Mrs Thatcher. She was every bit as hostile to CB, but the freeze from 1987 was ended as soon as she ceased to be Prime Minister, with John Major increasing the benefit by more than inflation in 1991.

The impact on the poorest people of real-terms cuts in benefit after benefit is beginning to sink in.

In terms of child poverty, the current government is actually going further than Mrs T: low-income families will also be hit by the real-terms cuts in tax credits. We estimate that some families will be as much as £3,000 worse off.

Today’s report reminds us that changes to uprating may be less dramatic than other welfare reforms but their potential impact can be even more significant. Today we have focused on a key benefit for parents, but the 1 per cent uprating cap is also going to hit low-paid workers, disabled people, carers, pregnant women and new mothers.

The Welfare Uprating Bill must be a key target for campaigning in 2013.

Full text (PDF 5pp)

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