Welfare plans 'will raise poverty'


The IFS said tax and benefit reforms will see hundreds of thousands of people dragged into poverty

Hundreds of thousands of people will be dragged into poverty by the Government’s tax and benefit reforms, according to research.

The respected Institute for Fiscal Studies (IFS) forecasts an overall rise in poverty among both children and working-age adults over the next three years.

Its findings contradict Chancellor George Osborne’s claims that the spending review will not increase child poverty over the next two years.

His claims were “totally unacceptable” and “disastrous”, according to campaign groups, who demanded a re-think of the coalition’s cuts programme.

The IFS predicted a rise in absolute poverty, defined as households with a real-terms income of less than 60% of the median in 2010-11, of 900,000 people by the end of 2014.

Relative poverty, measured against the median in any given year, will increase by 800,000, it said.

The figures show the first rise in absolute child poverty for 15 years and would have been higher still except for a general decline in living standards as average earnings fail to keep up with inflation.

The research shows that the Government’s tax and benefit changes, compared with the policies inherited from Labour in May, will increase absolute poverty by 200,000 children and 200,000 working-age adults in 2012-13.

“This finding is at odds with the Government’s claim in the 2010 spending review that its reforms will have no measurable impact on child poverty in 2012-13,” the IFS said.

But the Treasury insisted there is “considerable uncertainty” in the IFS results which means they “may not be meaningful”.

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