Sale Of Small Council Homes Condemning Thousands To The Bedroom Tax – The VOAG Investigates

Thousands of one and two-bedroom council homes have been sold off since 2010, preventing tenants affected by the “bedroom tax” from downsizing to avoid the penalty, research by The Independent shows.

The controversial policy is meant to free up social housing space by encouraging hundreds of thousands of tenants to move to smaller properties, by cutting their benefits if they have a spare bedroom.

But figures obtained by The Independent show that a severe shortage of smaller council homes across the country is being exacerbated by the right-to-buy scheme – leaving many victims of the bedroom tax with no choice but to accept reduced benefits.

In the areas hardest hit by the housing crisis, more than two-thirds of council homes sold off under right-to-buy since the Coalition came to power had one or two bedrooms, figures obtained under Freedom of Information show.

Central London is suffering from the biggest sell-off of small homes. In Camden, 81 per cent of properties sold since 2010 had two bedrooms or fewer, and 49 per cent had one bedroom. Figures for Hammersmith and Fulham show that 77 per cent of sales were of small properties.

In Southwark, 74 per cent of those sold were small, with 32 per cent one-bedroom properties, and in Lambeth, 74 per cent of its right-to-buy sales were of the smallest homes.

Brighton and Hove council has sold 111 properties since 2010, of which 74 per cent had one or two bedrooms. Although Bournemouth council sold just 20 homes, all of them were small.

The analysis of 125 council areas found that of 14,616 properties sold across England, 45 per cent had one or two bedrooms. About 61 per cent of England’s total social housing stock is made up of one- or two-bedroom properties, suggesting that some councils appear to be selling off a disproportionate number of smaller homes.

Alison Garnham, the chief executive of the Child Poverty Action Group, said the figures exposed the bedroom tax as “a hasty shambles” which had forced some of the most vulnerable children into unfit housing. “It’s often pushing them into the worst quality housing in the private sector – places that aren’t fit for habitation because of problems like damp and mould.”

Labour’s shadow housing minister, Emma Reynolds, said: “The truth about David Cameron’s bedroom tax is that there are simply not enough smaller homes for people to move to. With the Government failing to keep its promise on replacing every home sold through right-to-buy with a new home built, the shortage is getting worse.” Labour plans to scrap the policy if it wins a majority in next year’s general election.

Government efforts to reform the welfare system have resulted in tenants being moved out of expensive areas. But even those cities receiving families who are priced out are losing smaller properties through right-to-buy. In Hull, for example, 44 per cent of houses sold since 2010 had one or two bedrooms.

The housing charity Shelter urged the Government to review the bedroom tax in the light of the findings. “This research points to a serious contradiction at the heart of government policy,” said Roger Harding, Shelter’s director of communications, policy and campaigns. “Unless sufficient one- and two-bed homes are made available the bedroom tax is an unfair penalty on people who have no choice but to stay where they are.”

Westminster Tories bring in a bylaw making it an offence to “give out food for free”!

From Daily Mirror
Westminster Tories have ­revealed their true colours by  banning charities from running soup kitchens for the ­homeless.Conservative Westminster council in Central London also wants to make it an  offence to sleep rough – while slashing £5million of funding to hostels. Astonishingly, town hall chiefs claimed soup kitchens only “encourage” people  to sleep on the streets.

Westminster council, one of the richest in the land, wants to bring in a  bylaw making it an offence to “give out food for free”, punishable by fines. The  twisted move blows apart David Cameron’s Big Society boast that an army of ­volunteers will flock to help those worse off.

And it sparked a storm of ­criticism. Reverend Alison Tomlin of the  Methodist church in ­Westminster said: “The proposals are nothing short of  disgusting. This bylaw punishes people solely for their misfortune and belongs  in a ­Victorian statute book, not the 21st century.”

Labour’s London mayoral ­candidate Ken Livingstone added: “Only the  Conservatives would try to make it illegal to give food to the homeless. “With Tory mayor Boris Johnson cutting affordable housing to a trickle, the  number of people sleeping on the streets is rising and cuts to housing benefit  threaten ­thousands more with eviction and homelessness.”

Councillor Paul Dimoldenberg, leader of the Labour Group, said: “Nothing  illustrates the cold-hearted and callous approach of the Conservatives than this  attempt to criminalise those offering help to ­homeless people. “I thought this was what the Big Society was supposed to be all about,  generous-hearted people giving their time to those less fortunate, at no cost to  the public purse. This is a nasty, mean move from a nasty, mean party.”

A consultation paper says rough sleeping and soup runs would be banned in the  Westminster Cathedral Piazza and surrounding area. Labour said the cruel move  comes as the council ­withdraws funding for three hostels in the borough and  housing trust.

Westminster’s Daniel Astaire provoked fury by declaring  free food “keeps people on the street longer”. He added: “Soup runs have no  place in the 21st century. It is undignified that people are being fed on the  streets. They actually encourage people to sleep rough with all the dangers that  entails. Our priority is to get people off the streets altogether. We have a  range of services that can help do that.”

Focus On Benefit Cuts and Sanctions

Benefit claimants Assessed as ‘fit for work’ are dying within six weeks of assessment
Thousands of sick benefit claimants are dying within six weeks of being wrongly assessed as “fit to work”, a North-East MP claimed yesterday, during a commons debate  in which he called for an independent assessment of the Coalition’s welfare policy.

Ian Mearns, Labour MP for Gateshead, blamed the Government for the misdiagnosis at least 10,600 sick and disabled people in just ten months, who then quickly died. He said: “Four people a day are dying within six weeks of being declared fit for work under the work capability assessments. It is scandalous.

Mr Mearns said the figure of 10,600 deaths, after unsuccessful claims for Employment and Support Allowance (ESA), covered the period January to November 2011. And he added: “This Government has repeatedly refused to release updated 2013 figures for deaths within six weeks of an end of an ESA claim.”Stop the benefits cuts and sanctions says Citizens Advice Bureau Punishing Poverty is a report published last week by Citizens Advice and which is based on a national survey of those who have had benefits stopped or sanctioned for not meeting the endless ‘work related activity’ conditions imposed by Jobcentres.  Hundreds of thousands of claimants have faced sanctions varying in length between four weeks and up to three years.  These sanctions are often imposed for the most trivial of reasons and as this report exposes, quite often for circumstances that are entirely beyond the claimant’s control.  It is not just unemployed claimants who face sanctions, but increasingly sick and disabled people and single parents with children over the age of five.

The results of the survey portray a truly horrific account of the destitution and human misery that this regime has inflicted on people.  Stories of families ripped apart, pregnant women left without food, those with dietary needs due to health conditions becoming sick, mental health deteriorating, suicide attempts and people forced to beg or go through bins to find food.

These stories are not the inevitable consequence of economic crisis, the UK is still one of the richest countries in the world. Benefit sanctions barely save the tax payer a penny such is the cost of policing and administering the system. 

As the Citizens Advice report reveals there are countless tales of benefits being stopped due to a mistake by the Jobcentre, or because a claimant faced unavoidable circumstances such as travel delays, hospital appointments and even job interviews which caused them to be late to an appointment with their advisor.  It is the widespread, seemingly haphazard nature of the regime which forces all claimants into a state of perpetual fear.  The threat of the dreaded brown envelope through the door from the DWP is a feature of life on all benefits, a daily reminder that you are only ever a heartbeat away from complete destitution.

The welfare state is not a political weapon to stigmatise  or scapegoat people, force down wages and pursue a work makes you free ideology. It should exist as the opposite, to empower, provide dignity and even act as a force against poverty pay – saying to grasping employers that there is an alternative for people if all you’ve got to offer is shit wages. Benefit sanctions must be brought to an immediate end with no exceptions. The full report can be downloaded at: http://sdrv.ms/1c48ECq10 Facts About Benefits Britain
1) A TUC survey showed that people think around 41% of benefits go to the unemployed, the real figure is 2.6%. (1)

2) 42% of the Welfare Bill goes to pensioners, 21% goes to people in low paid work. (2)

3) Nearly 80% of JSA claimants stop claiming within 6 months. (3)

4) Of the 7.8 million families receiving child benefit, 1.2 million have more than two children. (4)

5) A TUC survey found that people think around 27% of welfare is lost to fraud – the real figure is only 0.7%, around £1.2 billion. (5)

6) Around £17 billion of benefits that people are entitled to goes unclaimed every year. (6)

7) Immigrants are 60% less likely to claim benefits than a British-born person. (7)

8) 64% of families receive benefits – that’s 20.3 million families. (8)

9) The UK spends 12% less on benefits per head than France does, and 19% less compared to Germany. (9)

10) 93% of new Housing Benefit claimants in 2010 and 2011 came from working people, as UK housing costs are the 3^rd highest in Europe. (10)

Guildford Against Fees And Cuts – It’s not cheap being poor!

The Poverty Premium –
It’s not cheap being poor

It is a shocking fact that families on a low income are still paying more for their basic goods and services than better-off families says a Save the Children report published this week. Save the Children has calculated that this annual ‘poverty premium’ can amount to more than £1,280 for a typical low-income family. Moreover, the poverty premium has risen by over £280 since Save the Children’s original research was conducted in 2007.

The poverty premium
The poverty premium is a notional extra cost that people on lower incomes can pay for goods and services, compared with the cost that is paid for the same goods and services by higher-income families.

Their report sets out the scale of the poverty premium and focuses particularly on the extra cost of gas and electricity bills, which account for 20% of the premium. Of all the elements of the poverty premium, the cost of gas and electricity to keep a home warm is an expense that no family can avoid. There is a clear link between living in cold, damp conditions for long periods and significant health risks. Families who cannot afford to pay the cost of heating their home adequately are putting their children’s health at risk says the report.

All children have the right to the best health possible, yet the evidence in Save the Children’s report shows how families on a low income struggle to pay for their gas and electricity and frequently compromise the warmth of their homes to reduce their bills. Of those who are fuel poor, 16.1% are families with children aged under 16, up from 11.8% in 2003. Many of these families will not be eligible for the government’s proposed Warm Home Discount.

The highest charges for gas and electricity are paid by those families who have a prepayment meter or who pay by standard credit. Prepayment meters are often installed for families on a low income who want to budget weekly or have been in debt. If families on a low income who pay the highest tariffs for gas and electricity- because they use payment meters- were charged the same amount as families who pay by direct debit, they would save, on average, over £250 a year. Save the Children is calling for all industries to ensure that the poorest do not pay more.

Low-income families shouldn’t be penalised for being poor. To ensure a fairer system for all vulnerable families, the report calls for all energy companies to provide a fixed rebate under the Warm Home Discount for families on a low income with children, using receipt of Child Tax Credit and income below £16,190 as a proxy for fuel poverty. (£16,190 is the first income threshold for entitlement to Child Tax Credit only.)

Save the Children is calling for The Department for Work and Pensions and the energy suppliers to run a pilot program to assess the feasibility of data-sharing, to allow direct payment of rebates to low-income families; to raise awareness of their rebates by promoting it to all customers; and to provide adequate notification of price increases to prepayment meter customers.The cost of living for low income families
Rising costs for low-income families comes at a time when the government is committed to cutting the welfare budget and public services. Families on low incomes are disproportionately reliant on welfare and public services, and consequently cuts in both areas of government spending will have serious impacts on the poorest. This new financial austerity comes on top of existing difficulties that low-income families have to overcome to make ends meet. It is mainly those on low incomes who tend to be unable to access favourable payment terms, whether for household or personal items they need to buy, fuel they need to purchase or loans they need to secure.

For many families on low incomes, the amount they either earn (from low-paid work) or receive in benefits is not enough to cover their basic living costs. A couple working full-time with two children needs £29,731 a year, or £402.83 per week (excluding money for rent and childcare), to afford a basic but acceptable standard of living. The same family on benefits will only receive £235.29 per week, which is 62% of the amount they need. Church Action on Poverty’s recent research report has provided further evidence of the difficulties families are having in meeting basic living costs. The report concludes that families on a low income need to borrow to survive.

Many low-income households choose to manage their budget in cash to ensure they have control over their total spending, which is a rational, safe approach that limits risk and minimises exposure to unexpected costs and outgoings. Many households (690,000 in 2007/8) do not have access to a bank account or other banking facilities that would allow them to pay a range of bills by direct debit, which is often the cheapest payment option for products and services. Some low-income families have a poor credit history, which means they have no access to affordable, low or no interest credit. The credit that they can access is therefore charged at the highest interest rates in the market.

The cost of credit
Households with a low or variable income often have a poor or non-existent credit history and are therefore unable to access reasonably priced credit from mainstream lenders (banks and building societies). Often the only option available is from commercial lenders (rent-to-buy, catalogues, doorstep lenders) who charge high interest rates on goods with a mark-up on retail prices. The annual percentage rate (APR) charged by commercial lenders can vary from 50–1,000%, compared with less than 30% APR charged by a mainstream lender. A basic household cooker can cost a family without access to low-interest credit a total of £669, more than two and a half times the cost of the same cooker bought outright.

The cost of borrowing
Low-income families with a poor credit history who need to borrow cash do not have the option of using a 0% bank overdraft facility or securing a low-interest bank or credit card loan. The only options available are high cost, such as doorstep lenders. A £500 cash loan from a doorstep lender could cost the borrower £750.

The cost of quick money: pawnbrokers, payday lenders and cheque cashing
A household may need to be able to access cash at short notice, but for those without a bank account this could mean using pawnbrokers, payday lenders or buy-back stores. A loan from a pawnbroker of £100 over six months will cost between 5% and 12% per month (equivalent to an APR of 70% to 100%), making the total cost of the loan between £170 and £200. Households without a bank account who need to cash a £200 cheque from a third party quickly will be charged a fixed fee and interest. For example, a £200 cheque would cost £12 to cash at Cash Converters.

The cost of insurance
Those on lower incomes often pay more for insurance. Insurance premiums are calculated in accordance with the risk of an event, and those on low incomes tend to live in areas where there is a higher risk of car crime and property theft. Families on a low income who live in more deprived areas can pay on average 48% more for car insurance and 93% more for home contents insurance.

The cost of gas and electricity
The extra cost of gas and electricity for low-income families accounts for 20% of the poverty premium. This significant additional cost arises because many low-income families pay for their gas and electricity using prepayment meters, which attract one of the highest tariffs. The lowest tariffs are offered by energy suppliers to customers who can either pay by direct debit, online, or who are eligible for the supplier’s social tariff. Low-income families who do not have a bank account cannot make direct debit payments. In addition, the eligibility criteria for the social tariffs of five of the ‘big six’ energy suppliers do not include families with children. In the last six years gas and electricity bills have more than doubled, and it is predicted that these increases will continue. Any across the board percentage increases in the cost of gas or electricity tariffs will have the greatest impact on those paying the highest tariffs – in other words, those using prepayment meters, including many low-income families. It is therefore likely that the poorest will be hardest hit by increases in energy costs.

Families on a low income with children can be affected by a number of difficulties when it comes to paying their energy bills. In addition to having to use payment methods that incur an expensive tariff and not being eligible for the current option for cheaper fuel under the social tariff, they often:
• Accumulate debt because they cannot afford their energy bills
• Are less aware of their energy use and how it is charged
• Lack access to information that would allow them to identify and secure cheaper energy deals.

Fuel poverty
The consequence of high fuel costs for those on a low income is fuel poverty – defined as being where households have to spend more than 10% of their income on fuel. Ofgem estimates that there are 5 million people in fuel poverty in the UK, representing about 18% of all households. In the UK, 7% of lone-parent households and 9.9% of couples with children live in fuel poverty. No parent wants to put their children’s health at risk, but figures for the UK showed that 5% of children were living in accommodation with inadequate heating. Cold living conditions increase children’s susceptibility to illness, compromise healthy weight gain and are detrimental to children’s respiratory health. A recent study has shown that respiratory problems were more than twice as prevalent in children who lived for three years or longer in homes that lack affordable warmth (15%), compared with children who had never lived in homes that were hard to heat during the previous five years (7%). In addition, it has shown that the mental health of adolescents can also suffer if homes are poorly heated. Families who can only afford to heat one room risk reducing their children’s education attainment if there is no warm, peaceful space to do homework. When inadequate heating is improved, research has recorded a marked reduction in the number of days pupils have off school. The government recognised the link between fuel poverty, inadequately heated homes and poor health and introduced the Fuel Poverty Strategy 2001.

The Strategy aims to eradicate fuel poverty by 2016 and “to ensure that by 2010 no older householder, no family with children, and no householder who is disabled or has a long-term illness need risk ill health due to a cold home” (p.10). It is unlikely that the government will hit its targets, largely because of the unprecedented increases in gas and electricity bills between 2003 and 2009. In response to these developments, the government has announced an independent review of the fuel poverty target and definitions. The introduction of a social tariff was one scheme to tackle fuel poverty. It has been partially successful in reducing the cost of gas and electricity for vulnerable groups but its impact has been focused on pensioner households, leaving other vulnerable groups, including low-income families with children, still paying relatively high fuel costs. As stated above, only one of the major six energy suppliers includes families on a low income with children in their eligibility criteria. So, in effect, a family on a low income that is eligible for a social tariff from one energy supplier could be denied the social tariff of another. Save the Children has conducted a qualitative research study that asked a group of families who are affected by the poverty premium about their experiences of paying for their gas and electricity. The research shows that families interviewed were not aware of the existence of social tariffs; had only a limited knowledge of their own tariff and energy costs, and had no appreciation of the information available to help them secure cheaper energy bills. Without the information, or access to the best deal, they are left paying more than they need to and are yet more vulnerable to fuel poverty.
Warm Home Discount
The government’s consultation paper, Warm Home Discount proposes that in England, Scotland and Wales, the social tariff is replaced by a fixed rebate on electricity bills that will be sent directly to a core group of pensioners on pension credit (with the scope of eligibility increasing between 2011 and 2015) using a data-matching system between the energy companies and the Department for Work and Pensions (DWP). The value of the rebate will increase from £130 to £140 by 2015. The consultation paper also proposes that the same fixed rebate should be given to a broad group of consumers who are vulnerable to fuel poverty. Energy companies will be given discretion to decide which of their customers should be included within the broader group.

Under the previous voluntary system, energy companies were given discretion to decide which of their customers would benefit from the social tariff. As already discussed, the outcome was that only one of the largest six energy companies ensured low-income families with children were eligible for their social tariff. The current proposals for Warm Home Discount risk repeating the same inequity. Energy companies could still decide not to include low-income families with children within their broader discretionary group. The result would be that families who struggle to pay their fuel bills will again miss out on financial support. Save the Children’s report calls for the government to ensure that low-income families with children are included within the group that receives the fixed rebate. This would lower the cost of fuel for these families and thereby reduce their poverty premium. Families with lower fuel bills would be able to heat their homes adequately without fear of going into debt. We propose that families with an annual income below £16,190 and in receipt of Child Tax Credit should be eligible for the rebate so that the mistake of leaving children out, made under the social tariff system, is not repeated. A pilot data-sharing project could be undertaken for families in receipt of Child Tax Credit, in the same way that a pilot project was run to establish the feasibility of data-sharing for pensioners on Pension Credit between the DWP and the energy companies.

Prepayment meters
A prepayment meter is a system that requires cash to be paid before energy can be consumed. Some meters take cards or tokens on to which cash can be credited. The tariffs charged for prepayment meters are more expensive than direct debit or online tariffs. Yet despite the relatively high cost, the majority of families on prepayment meters have an annual income less than £17,500. In Britain, 13% of households pay for their gas and/or electricity using prepayment meters, with almost two-thirds of these households using prepayment meters to pay for both gas and electricity. More than half of households on prepayment meters receive a means-tested benefit or benefits for disability. Ofgem’s own investigation found that prepayment meter customers were paying a premium that was greater than the extra costs involved in supplying the energy via the meter.

To ensure that the tariff for prepayment meters was cost-reflective, Ofgem introduced new licensing conditions for energy suppliers. Since September 2009 the new conditions have required energy suppliers to ensure that the price paid by prepayment meter customers reflects the cost of this form of supply, when compared with direct debit and standard credit tariffs. Ofgem have concluded that the new conditions have led to the average premium for prepayment meters compared with direct debit falling to £69 from £111 since October 2007. Nevertheless, Save the Children’s investigation into the cost of the poverty premium based on a real-life example revealed a differential of £253.

The prepayment meter can be an effective debt management system for the energy company because it allows the amount owing (or a portion of it) to be taken from future cash deposits into the meter, before calculating the remaining credit available. In 2007, more than 350,000 pre-payment meters were installed; 63% of these were put in place to recover debt. Some families who have tried to change from a prepayment meter to an alternative cheaper payment method have found their plan effectively blocked because the energy companies charge them a deposit of £250. This additional cost would prohibit many low income families from switching. The high tariffs associated with prepayment meters result in high fuel bills for low-income families and these in turn can lead to debt. Despite trying to budget for fuel costs, many families find themselves in debt, particularly during the winter.

A number of families featured in Save the Children’s report say they put double the amount into the prepayment meter in the winter compared with the summer. Families who try to avoid debt describe a range of approaches to minimise their energy use, many of which amount to self disconnection or self-rationing. These can have a significant negative impact on the health and wellbeing of families.

Some families have to bear the cost of using the ‘emergency‘ facility. In a worst-case scenario, a household may find that it is on a prepayment meter but is not eligible for the social tariff offered by local energy suppliers. The household may then find itself also paying off arrears from a (previously unknown) price increase, as well as paying back debt accrued from previous bills. In addition, it may be paying the charge to use the ‘emergency’ facility. The scale of these costs for families on a low income is significant.

In 2009 there were 502,631 customers repaying electricity debt through prepayment meters and 365,036 customers repaying gas debt through prepayment. Once an energy company has installed a prepayment meter to recoup debt from a family, it can be very difficult for the family to change to another payment method as a way of reducing their energy bills. Paula, mother of one, explained that she had got into arrears of approximately £800 when she was paying quarterly bills and the energy company had installed a prepayment meter to collect the arrears at a rate of £3.50 per week. Lana, her partner and three children had had a prepayment meter installed and reported that, “of every £10 which went on, £3 went towards paying arrears”. Matt explained that he had topped their gas up by £10 the previous day; after their arrears were taken off they were left with £3. This allowed “the four children to have a bath, and us to have the heating on for one and a half hours at tea time to warm the house up”.

Awareness and consumer choice
The current energy market works best for customers who are aware of their energy use and charges and who can navigate the information energy companies provide to minimise their costs. Informed consumers are able to switch between suppliers to get the cheapest deal, and price comparison websites can make this process more straightforward. However, research reveals that lack of awareness stops many families from accessing the best prices.

This lack of awareness is compounded by a lack of access to information, which is primarily through the Internet. Many low-income families do not have Internet access. Although 70% of households in the UK had access to the Internet by the end of March 2009, 50% of households with an income below £11,500 did not have Internet access, compared with 5% of households with an income of over £30,000. A lack of awareness and lack of access to information restricts consumer choice. Price comparison websites show that customers who are able to pay by direct debit from a bank account can secure the lowest cost for their energy. This price difference for families who cannot pay by direct debit amounts to an extra £250 a year.

UK austerity measures to throw 1 million into poverty

“The share of the national output going to wage earners fell from 65 percent in 1975 to 53 percent in 2007.” (New Political Economy Network)

The British Conservative-Liberal Democrat coalition government’s austerity measures will throw almost 1 million more people into poverty over the next three years, including hundreds of thousands of children.

These are the findings of a study by the Institute for Fiscal Studies (IFS) think tank, produced in collaboration with the Joseph Rowntree Foundation.

In October, the coalition government announced public spending cuts of £83 billion, including significant cuts in welfare benefits and a wage freeze across the public sector. The measures are not only a deepening of efforts to force working people to carry the cost of the Labour government’s multibillion-pound bailout of the banks. They mark a significant escalation in the attempts of successive governments to force down wages and fully dismantle essential social and welfare provision.

The IFS forecasts that there will be an exponential increase in the numbers of children and adults living in absolute and relative poverty, and a stagnation in the incomes of the broad mass of the population.

The numbers in absolute poverty—defined as households with income of less than 60 percent of the median in 2010/2011, adjusted for inflation—will rise by 900,000 by the end of 2014. Of these, some 200,000 will be children, the first rise in absolute child poverty in 15 years.

The numbers forecast to be pushed into relative poverty are just as damning. The benchmark for relative poverty is determined by median income. But, the IFS states, this target will itself fall, due to the decline in real earnings. As a consequence, relative poverty is forecast to rise by approximately 800,000.

The government’s cuts in housing and welfare benefits, combined with the previous Labour government’s decision to raise National Insurance contributions from next year, hit across the board. Poverty amongst working-age adults without children is expected to rise by 300,000 and 200,000 for absolute and relative poverty respectively.

Families with two children on “middle-incomes” have already suffered a 3.4 percent decline over the past two years, the IFS reported. They earned £988 a year less in 2010 than in 2008. They are expected to lose a further £300 in real terms over the next two years under the government’s spending cuts.

The IFS predictions come under conditions in which almost 2 million children in Britain are already living in conditions of “severe poverty” and fully 4 million are living in poverty.

The government’s measures have been condemned by anti-poverty charities—the very organisations tasked with filling the gap of declining social provision under the coalition’s grotesquely named “Big Society” plan.

They complained that the IFS projections will place the government in breach of the Child Poverty Act, passed into law earlier this year, which commits current and future governments to cut relative child poverty to 10 percent and absolute child poverty to 5 percent over the next decade.

But the government has already stated that it intends to redefine poverty so that “isn’t just about getting above an arbitrary line, but is about improving people’s life chances.”

It was Conservative Howard Flight who gave vent to the class sentiment motivating the assault on welfare. Speaking last month, just after he was selected as one of more than 20 new Tory peers, Flight complained that child benefit was being removed from higher earners. “We’re going to have a system where the middle classes are discouraged from breeding because it’s jolly expensive. But for those on benefits, there is every incentive. Well, that’s not very sensible”, he said.

His remarks came barely a week after Lord Young, one of Prime Minister David Cameron’s senior advisers, was forced to resign after stating, “For the vast majority of people in the country today, they have never had it so good ever since this so-called recession—started.”

A Treasury spokesperson dismissed the IFS report, claiming that “uncertainty” in the model it had employed meant that the “small differences they identify may not be meaningful”.

Elements of the coalition’s cuts package were also criticised by the Labour Party. The real measure of its stance, however, is made clear by the fact that it is Labour MP Frank Field who is drawing up the government report on “redefining” child poverty.

The coalition’s austerity measures come after a 30-year period in which successive governments have conducted a systematic assault on the social position of working people.

According to a report by the New Political Economy Network, the share of the national output going to wage earners fell from 65 percent in 1975 to 53 percent in 2007. It was Labour that fuelled the increase in the “working poor”. Through its various welfare “credits,” it ensured that business had access to a large army of workers on minimum pay, funded at taxpayers’ expense.

During the same time frame, as wage rises fell behind productivity, personal debt as a proportion of disposable income rose from 45 percent in 1980 to 160 percent in 2007.

As the report noted, “People did not borrow to increase their consumption. They borrowed to compensate for wages that were increasingly falling behind productivity increases. As household debt rocketed between 2001 and 2007, levels of consumption as a proportion of GDP actually fell”.

Even prior to the 2008 financial collapse, Labour’s policies had led to a vast increase in social inequality. A survey by the National Equality Panel based on figures from 2007/2008 found that the richest 10 percent of the population were over 100 times wealthier than the poorest 10 percent, and that income inequality had reached its highest point since the end of the Second World War.

Now, unemployment has crossed the 2.5 million mark, rising by 35,000 in the three months to October. Much of this was accounted for by the fall in pubic sector employment by 33,000, as the spending cuts began to make their mark.

The situation is even worse amongst the young. The number of 18- to 24-year-olds claiming unemployment benefit has quadrupled since 2008, from 5,840 to more than 25,800. In July, UKJobs.net reported that the average annual salary had dropped by more than £2,600 in the past six months, with across-the-board wages falling from £28,207 to £25,543.

As a consequence of huge levels of indebtedness, rising unemployment and the undermining of welfare provision, millions are now threatened with penury.

According to the Independent, the number of emergency welfare loans paid out to people in dire distress has almost trebled in the last five years. More than 3.6 million “crisis loans” were made in the last financial year—up from 1.3 million in 2005/2006. The government has now said that, from April, Job Centre staff will begin issuing vouchers for people to exchange for emergency food supplies.

The Bank of England has also forecast a tightening financial squeeze on many families due to soaring commodity and utility prices, and the planned Value Added Tax hike to 20 percent from January 1. It warned that more than one in two people with unsecured debts are struggling to cope. This is especially the case where some credit companies are charging up to 2,600 percent interest a year.

On Monday, the Confederation of British Industry warned that interest rates would have to rise almost sixfold due to inflation over the next 24 months—from 0.5 percent to 2.75 percent by 2012. This would mean millions of homeowners facing a hike of almost £200 on the average monthly mortgage payment.

Meanwhile, the directors of the FTSE 100 companies have seen their total earnings rise by an average of 55 percent over the past year. The Incomes Data Services revealed last month that chief executives at the 100 most highly capitalised firms on the London Stock Exchange had received an average of £4.9 million in total in the year to June.

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