A coalition of children’s charities has called on the Government to adopt a fairness test to assess the social impact of budgeting decisions.
The test will look at who bears the burden of tax rises or spending cuts in order to protect the poorest in society.
The campaign incorporating Child Poverty Action Group, Oxfam, Save the Children, the Trades Union Congress, and the End Child Poverty Campaign among others, builds on discussions with ministers and their advisers that have been occurring since the election campaign. It calls for data to be "marshalled" from service providing departments through to the Treasury for "robust analysis" and for the process to be open to public scrutiny.
"Despite promises of fairness from the coalition government, they appear to have no process in place for delivering it," said Tim Nichols, spokesman for the Child Poverty Action Group which has been coordinating demands for the 'Fairness Test'.
"We need to know why people on low incomes are being clobbered with cuts to free school meals and the Future Jobs Fund while many higher up the income scale have barely felt a pinch. We need every measure to go through an inequality impact assessment so that fairness is hardwired into the government's decisions to tackle the deficit."
Nichols believes if the government does not undertake this activity the country will not meet the targets in the Child Poverty Act or its legal duty in the Equality Act, having overflowing implications for the economy:
"If the government fails to make progress on its goal to end child poverty by letting the axe fall on the poorest households, it will not only be a moral disgrace but an economic catastrophe too.
"Research by the Joseph Rowntree Foundation has found that problems associated with child poverty cost the economy £25bn a year. We will derail the recovery if we fail to understand that family security and economic security go hand in hand."
Fairness test examples |
Increasing VAT: Fail Increasing VAT fails the Test because it hurts all families, regardless of income level. The richest tenth of families spend just 7 per cent of their disposable income on VAT; the poorest tenth spend 13.7 per cent. Increasing VAT hits poorest families twice as hard, especially disabled people who need to pay for equipment and bills subject to VAT. |
Capital Gains Tax rise: Pass A rise in capital gains tax, to bring it back in line with income tax, would impact most on those with more money to spare, so would pass the test. Currently under 250,000 people pay CGT every year and only one in six households own shares. Uprating CGT would also stop the wealthy using it as a means of avoiding paying their fair share of tax. |
Cutting free school meals: Fail The cancellation by the new government of a promised extension of free school meals - to primary school children with working parents on low incomes – fails the fairness test. The free meals would have improved children’s health, welfare and capacity to learn. They would have helped make work pay for many parents by allowing them to keep the benefit when taking up work, and would have provided much needed extra weekly income for hundreds of thousands of families. Some 50,000 children will now stay below the poverty line. |
Income tax rises: Pass Income tax is direct and progressive, particularly if the rise is targeted at those higher up the income scale. It offers much greater scope than most taxes for raising revenue in ways that reduce inequality. The government should explicitly recognise income tax as one of the fairest options for raising significant additional revenue. |
