Hain Demands Action to Save Neath Children From Poverty

Peter Hain has condemned ‘failing’ Coalition policies in reaction to the news that one million children in the UK will be living in poverty by 2020, with thousands of Neath children likely to be affected.

It is news that has confirmed the worst fears of child poverty campaigners, with 200,000 children in Wales already living in poverty. The MP for Neath has repeatedly voiced his concerns regarding child poverty over the past few months, growing increasingly concerned about the effects that the Government attacks on Welfare Benefits are having on the most vulnerable in our communities.

Commenting Mr Hain said, “In Neath Port Talbot, more than 20,000 children are living in homes where weekly earnings total less than 60% of the average household and the number of children living in poverty is going up because the government isn’t creating jobs and is systematically removing the safeguards Labour put in like childcare solutions and tax credits”.

Mr Hain strongly criticised the Government’s “refusal to believe in relative poverty with an inability to promote policies that might help people out of absolute poverty” and is particularly angry about the undoing of all the progress made under Labour.

He warns, “what the IFS is talking about is so massive an increase in child poverty that it will effectively reverse all the work Labour did between 1997 and 2010 getting one million children out of poverty.”

Mr Hain was further worried, he said, about the burden on local services that increased child poverty would bring, pointing out that at the Neath foodbank alone, organisers are ‘already struggling’ to deal with the demand and desperation of local people.

Labour must not sign up to stagnation


Some – sadly including anonymous Labour frontbenchers – suggest that the only way for Labour to win back economic trust lost in the global banking crisis is to sign up to Tory-Lib Dem post-2015 election spending plans due to be announced in the Budget next week.
In fact the reverse is true. More cuts and austerity will continue Britain’s economic inertia – and destroy Labour’s claims to offer a serious alternative to the scorched earth economics being pursued in Britain and across Europe.
When Labour signed up pre-1997 to the then Tory spending plans, the economy was growing, not slowing. Our pledge was designed to reassure voters that we could be trusted to be prudent with the benefits of that growth.
But today the economy is stagnating. Economic credibility will not come from talking tough about ever-tightening the squeeze when what the economy desperately needs is a growth stimulus.
The way to cut borrowing and bring down Britain’s debt burden is to get the economy growing again. Most of the deficit will disappear once the economy returns to full capacity working. Any remaining shortfall can be tackled over the next Parliament, when a growing economy will make any unavoidable tax rises or spending cuts more bearable.
We are now living through the longest lasting slump since the 19th century. Output is some 14 per cent below where its trend pre-2008 banking crisis would have put it. Recession is costing us over £200 billion in lost annual income.
Government budget plans assume that the gap between actual and potential output is small, about 3 per cent. This is important because it means that most of today’s budget deficit would persist even after the economy eventually returns to full capacity working.
But this assumption is false, according to authoritative bodies like the National Institute for Economic and Social Research, the International Monetary Fund and the Institute for Fiscal Studies. They argue that the output gap is much bigger, meaning that the economy could grow quickly by taking up the slack. The deficit would shrink because economic growth would boost jobs and tax revenues and reduce welfare bills. The fiscal squeeze needed to end any ongoing budget deficit can be far less tight than that being planned by the Chancellor, and Labour should not touch it with a barge pole.
The CBI has called for an extra £10 billion in infrastructure investment, the  institute for Fiscal Studies for an extra £20 billion of public investment. My own preference is former chief economist at the Cabinet Office Jonathan Portes’ proposal for a £30 billion programme of infrastructure investment, because the scale of the problem is so large that vigorous action is required.
We should follow the example set by Alistair Darling in the 2009 recession when he brought forward £30 billion of public investment plans originally scheduled for later years. A big programme of social housing would be a good start.
The folly of George Osborne’s strategy is that in the year just ending his target deficit is twice what he said it would be in June 2010 and next year the Office for Budget Responsibility expects it to be three times what he planned in 2010. Is this really what the Prime Minister meant by going ‘further and faster on the deficit’?


He is missing his public sector debt target too. It was meant to be falling to 67 per cent of GDP in 2015-16, but now the OBR has it ‘falling’ to 79 per cent in 2016-17. Borrowing – another of his targets – is over £200 billion higher than he planned in 2010. And Britain has lost his cherished AAA credit status.
Why not learn from America instead of blaming the eurozone for Britain’s return to recession? The USA economy has been growing because President Obama gave it a boost in 2009 of the kind Britain urgently needs today.
Labour set out on the same path after the banking crisis but the Tory-Lib Dems have managed to turn Labour’s road to recovery into the road to ruin – a dismal, reactionary consequence of failed policies which Labour must not think of emulating, even for a few post-2015 years. To do so would destroy trust, not earn it.