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Cuts to Universal Credit will put one million more children into poverty, according to a new analysis by Child Poverty Action Group (CPAG) and the Institute for Public Policy Research (IPPR).
‘The Austerity Generation’ finds that families already at greater risk of poverty – including lone parents, families with very young children, larger families and those with a disability – will be most affected by the cuts.
It calls for the restoration of work allowances (the income level at which UC starts to be withdrawn) and says the government should triple-lock child benefit and the child element of UC.
The report finds that working families stand to lose £930 a year on average from cuts in the tax credit system and £420 a year from cuts to Universal Credit. These are losses across the population, so the losses for tax credit and UC recipients would be much higher, says the report. It calculates that freezes and cuts to Universal Credit work allowances will leave lone parents worse off by, on average, £710 a year, couples £250 a year.
Alison Garnham, Chief Executive, Child Poverty Action Group, said: “This report is the closest anyone has come to producing a cumulative impact assessment of a decade of social security cuts on families with children. It’s an incredibly detailed piece of work, but its basic story is straightforward and shaming: since 2010, rather than investing in our children, government policy has been creating an Austerity Generation whose childhoods and life chances will be scarred by a decade of political decisions to stop protecting their living standards. This is the choice that’s being made in our names.
“The promise of increased rewards from work made to families with children under the new Universal Credit benefit has been broken. The Universal Credit we see today is not the Universal Credit that was sold to everyone a few years ago. Even after taking into account increases in the minimum wage, rising tax allowances and extra childcare help, working families will be the biggest losers from cuts made to the benefit system. Cuts to Universal Credit have substantially reduced the rewards from work for many families. Cuts and freezes to the work allowances will leave lone parents worse off by £710 a year on average, and couples £250 a year on average, across the population.
“If the government’s flagship anti-poverty measure ends up rolling out poverty then it’s hard not to see that as a colossal failure of public policy.”