THE BLOG

Budget 2013: Children Left in the Firing Line

21/03/2013 11:49 GMT | Updated 21/05/2013 10:12 BST

The Chancellor said he wanted to help people looking to work hard and aspiring to get on, but even the hardest working families will have very few reasons to cheer and plenty to fear from yesterday's budget statement.

The focus on cost of living issues was both expected and right. Families are groaning under the strain of trying to make ends meet while wages stagnate and government support is cut for low earners as well as those not working. But the measures proposed- on fuel duty, child care and income tax personal allowances- at best, will provide limited relief to some families.

Take the increase to £10,000 of the personal allowance in April 2014. This increase of £560 in the allowance means income tax bills should fall by £112 a year. Good news in these tough times.

But it's not as simple as that if, like many people, you are on a low wage and rely on benefits to top up your income and help pay the rent. People in work and who are claiming Housing Benefit will find that benefit rules mean they only get to keep 35%- £39.20 a year- of this income boost. Those claiming both Housing Benefit and Council Tax Benefit only get £16.80 a year (32p a week) from this change. For many of the lowest paid, the increase in the personal tax allowance is a classic example of the government giving with one hand and taking away with the other.

While the help for families is limited and poorly targeted, the pain has been intense and localised largely on low income families with children. So while the personal allowance change next year will cost just over £1 billion a year and benefit many people higher up the income distribution, the cuts being implemented just this April will take £2billion away from low income families.

And there's the prospect of more pain and hurt to come. The main budget document (see page 26) show that the government wants to introduce a "firm limit" on "a significant proportion" of Annually Managed Expenditure, which includes social security expenditure. This sounds technical but could mean that - despite all the cuts, all the changes in eligibility and levels of benefits made so far- if the economy worsens then the poorest in society will be asked once again to take the hit.

The Chancellor's call for an "aspiration nation" yesterday sat awkwardly with a budget that did nothing to raise hopes for families and ignored the inconvenient but basic truth that rising child poverty kills aspiration and opportunity.

Child poverty doesn't come cheap either. Spending cuts that create child poverty are not spending cuts; we know that child poverty burns a huge hole in the public purse and undermines our economy by wasting economic potential- the Joseph Rowntree Foundation in 2008 puts these costs at £25billion a year.

Austerity was supposed to be about not saddling our children with our debts but actually austerity is turning out to be about loading the pain of deficit reduction onto our children, which is why child poverty is expected to soar by one million by 2020.

The budget is disappointingly limited in the way it seeks to help families with the cost of living but its main flaw is that it leaves children in low income families stranded at the front-line of austerity and in the firing line if the Chancellor again misses his economic targets.