The Tories’ relief that the child poverty figures just published in the official Households Below Average Income (HBAI) statistics didn’t show an increase was palpable. But that conceals the real story. The Tories have form on this issue. Child poverty tripled under Thatcher from 1 in 9 children to 1 in 3, but then fell by 800,000 under Labour after 1997. Unexpectedly this trend continued initially under Cameron with a fall to 2.3 million in 2010-11 because middle class earnings declined (so that the threshold of 60% of average earnings dipped a bit) while benefits protected the poorest. However that easing of the child poverty stigma has now come firmly to an end as a result of the housing benefit cap, the bedroom tax and the 1% cap on benefit increases. Indeed it is now forecast, particularly if the new round of £12bn cuts is launched in the budget, that child poverty will have increased by one-third to 1 in 4 children by 2020.
Even that is not the full story. In Opposition Cameron pledged to end the ‘moral disgrace’ of poverty. He went further in 2006: “the Conservative party recognises, will measure and will act on relative poverty……Even if we are not destitute, we still experience poverty if we cannot afford things that society regards as essential”. Contrast that with the Tory reaction when they believed just before the HBAI statistics were published that the child poverty figures had increased. Were they going to ‘act on relative poverty’ to deal with a worsening situation? No, they were going to move the goal-posts so that nothing need be done. They were going to change the definition of poverty to take account of entrenched worklessness, family breakdown, problem debt, and alcohol and drug dependency – anything except a lack of money.
Then there is still this unidentified £12bn welfare cuts promised in the budget. After £21bn cuts in the last Parliament, this is now much harder to make without causing real pain and destitution. The cuts already announced – removing housing benefit from 18-21 year olds, a 2-year freeze on working-age benefits, and the reduction of the benefit cap from £26,000 to £23,000 – will only raise about £1.5bn. So where will the remaining £10.5bn come from?
The other obvious trigger point for a big political kickback is that the budget is likely to include such provocative hand-outs to the rich as the reduction in the top rate of income tax from 45% to 40% (which is mainly a gift to millionaires) and the raising of the nil rate band for inheritance tax from £325,000 to £1 million, which will benefit exclusively the richest 6% of families in the UK and given that the surviving spouse inherits the same tax break, it’s worth £2 million in tax saving for Britain’s very richest families.