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A leading charity has urged Chancellor George Osborne to ‘halt the erosion of family benefits’, ahead of tomorrows Autumn Statement.

Analysis of Autumn Statements this Parliament by the Child Poverty Action Group (CPAG) reveals the extent to which low-income families have lost out.

  • The value of child benefit and child tax credit have fallen by 13% and 8.5% respectively simply as a result of uprating decisions over this Parliament (see figures below); any further erosion would turn the screw on many working and non-working parents.
  • Child Benefit has lost 13% of its value over the course of this parliament because of uprating decisions.  This is equivalent to a loss of £543 of support over the five years for a one child family, £900 for a two-child.
  • The children’s element of Child Tax Credit has lost 8.5% of its value compared to what it would be worth if the government had uprated it by CPI and over-indexed as promised in the 2010 budget. This is equivalent to a loss of £1,140 over the course of the parliament for a one-child family, and £2104 for a two child family.
Annual value of child benefit (actual and if uprated by RPI). Source: CPAG.
Annual value of child benefit (actual and if uprated by RPI). Source: CPAG.
Annual value of the children’s element of child tax credit (actual & if uprated by RPI & CPI). Source: CPAG.
Annual value of the children’s element of child tax credit (actual and if uprated by RPI and
CPI). Source: CPAG.

CPAG say they will also look to the Chancellor’s Statement for evidence that the Universal Credit budget will not suffer further Treasury raids.

Iain Duncan Smith’s flagship new benefit, which in time will support half of UK children, has already lost much of its poverty-fighting potential through cuts to its value.

And, as the NAO reported last month, there is still no clear plan for how the credit will work and what it will cost.

Universal Credit merges six existing benefits, including Housing Benefit and Tax Credits, into one single monthly payment.

Child poverty is set to rise, not fall, says CPAG. Largely as a result of real term cuts to tax credits and benefits.

The charity is urging the Chancellor to protect family support and prevent plunging another million children into poverty by 2020.

Official child poverty data lags by two years. However, analysis by the Institute for Fiscal Studies projects both current and 2020 child poverty rates as follows:

  • Relative child poverty rate 20.1% 22.5%
  • Absolute child poverty rate 25.2% 27.5%

CPAG is a leading charity campaigning for the abolition of child poverty in the UK and for a better deal for low-income families and children.

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