LONDON (Reuters) - British government plans to squeeze welfare benefits are likely to push more children into absolute poverty over the next five years, reversing recent improvements, the Institute for Fiscal Studies said on Thursday.
The forecast from the IFS risks embarrassing finance minister Philip Hammond, who is due to present his first annual budget on March 8 and has shown no sign of abandoning existing policy to freeze most benefits for four years.
With inflation picking up after last year’s vote to leave the European Union, the value of most working-age benefits is set to fall by 6 percent in real terms over the next four years, the IFS said.
The proportion of children in absolute poverty was likely to rise to around 30 percent from 27.5 percent in the 2014/15 tax year, the IFS said, reversing gains in tackling poverty made since the 2007-08 financial crisis.
“Tax and benefit changes planned for this parliament explain all of the projected increase in absolute child poverty between 2014–15 and 2021–22,” IFS researcher Andrew Hood said.
Britons of working age were likely to feel squeezed by a continuation of the weakest wage growth in 60 years, the IFS added.
The IFS based its definition of absolute poverty on research by the Joseph Rowntree Foundation think tank, which estimated that a couple with one child needed 288 pounds a week after housing costs.
Britain’s finance ministry said that the IFS did not take into account the value of public services provided to low-income households, or the benefits of a higher minimum wage.
“We are taking action to support families with the costs of living by cutting taxes ... doubling free childcare for nearly 400,000 working parents and introducing the National Living Wage,” a government spokesman said.
Reporting by David Milliken, editing by Andy Bruce