David Cameron challenges child poverty figures

David Cameron today challenged claims that the Government's austerity measures will increase child poverty and hit the poorest hardest.

Official figures published in Chancellor George Osborne's autumn statement on Tuesday indicate that child poverty is set to swell by 100,000 over the coming years, while the respected Institute for Fiscal Studies thinktank suggested that lower income groups are bearing the brunt of the Government's cuts.

But Mr Cameron told ITV1's This Morning today that the rich were bearing a much larger share of the burden than the poor.

"If you look at the overall numbers, the top 10% pay 10 times as much as the bottom 10%," said the Prime Minister.

"That is the key to the whole package that we have produced."

Mr Cameron suggested that the predicted increase in child poverty was a statistical quirk caused by the "illogical" fact that it is recorded relative to average income rather than as an absolute measure.

Official statistics record a child as being in poverty if he or she is living in a household with below 60% of average income after housing costs.

The unusually-high £5.30-a-week increase in the state pensions announced by Mr Osborne had the unintended consequence of making households with children less wealthy in comparison to pensioners.

"I think there is a real problem with the way we measure child poverty," said the Prime Minister.

"Because it is done on relative poverty, it means that if you increase the pension, that means more children are in poverty. I think that is illogical.

"It is the right thing to do to increase the pension. It doesn't make any child in this country poorer because you are giving pensioners more money at a time when they need it.

"I think what we've got to start doing is measuring how we help children out of poverty and keep them out of poverty."

Mr Cameron accepted that the two-year cap of 1% on public sector pay hikes announced on Tuesday was "tough", but defended the decision to uprate benefits for the jobless by 5.2% at the same time.

He told This Morning: "It is obviously a tough decision, having frozen public sector pay, to then say for another two years we are going to to have a freeze plus 1%. I understand that's tough.

"We had a difficult decision to take on uprating benefits - whether to uprate them in line with (inflation in) September, the month they are normally uprated with.

"The judgment we came to in the end is, frankly, people on employment benefits or pension credit are some of the poorest people in the country and therefore it is right that their benefits are uprated."

In its analysis of the autumn statement, the IFS yesterday predicted a decade of austerity in which average household incomes would fall by £2,500 in real terms over three years and families with children would be worse off in 2016 than they were 14 years earlier.

Mr Cameron acknowledged that there were difficult times ahead.

"This is a tough time for our country, there's no denying it," he said.

"The job of the Government is to try to explain to people calmly and reasonably how we are going to come through this, how we are going to keep Britain safe in this debt storm that is engulfing Europe and build a better future for the country as we do so."

The Prime Minister said the Government was taking more action to help people get back into employment under its Work Programme than had happened since the 1930s.

He said ministers were targeting the hardest cases and were prepared to spend up to £14,000 per person to secure them a job.

"It is trying to make sure we don't just have schemes that help the easy to help. Let's help the hard to help, the ones who have been out of work for a long time."

Mr Cameron also reiterated his previous warnings about the potential impact on Britain of the eurozone collapsing and said it was "a real worry for our country".

"If it fails, if the euro fell apart, what you would see is a steep decline in the economic growth of all countries in the euro including Britain."

He added: "I spend a lot of my time putting pressure on other European leaders to come up with the solution that will actually make sure there is stability and growth in Europe."

PA