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Poor families with young children 'hit hardest' by government reforms

Research by the London School of Economics (LSE), Manchester University and York University found that poverty has increased since the coalition government came to power in 2010, and predicted it will get worse in the next five years.

The report said tax and benefit changes have hit families with young children harder than any other household type and that tax and benefit decisions made by the coalition meant that cuts to benefits and tax credits that hit low-income families hardest made no impact on the public finance deficit because they were offset by tax reductions for better-off households. 

Up to 2014/15, the poorest 5% of the population lost nearly 3% of their income on average from the changes. 

People in the next 25% of income distribution lost almost 2% and those in the top 50% were net gainers from the changes.

Meanwhile, spending on children aged under-five fell 21% between 2009/10 and 2012/13, with an 11% fall for early education and 3% for Sure Start children’s centres. 

These reductions coincided with a six per cent increase in the number of under-fives.

Professor Ruth Lupton, of the University of Manchester, said: “There is more to the coalition than cuts. Its major legacy may turn out to be its rapid reforms of the schools system, the NHS, and welfare benefits. But its decisions on where to cut and where to spend have limited its scope either to reduce the debt or protect the poor.”

Treasury spokesman said analysis by the Institute for Fiscal Studies found that the richest have lost the most from the government’s changes to taxes and welfare and that the research by the LSE and Manchester and York University does not take into account “the effects of changes to public services. That means that it can’t consider the full range of ways the government provides support to the poorest and most vulnerable families across the country: those on lower incomes have been helped by a range of government policies across this parliament in all areas of government spending, from protections to NHS and schools spending to the decision to increase the tax-free personal allowance,” he said.