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Emergency Budget: Osborne's plans 'will hurt poorest families'

Children, young people and families are in line to bear the brunt of the measures announced in the Budget to reduce the country's deficit, sector leaders have warned.

Despite assurances from Chancellor George Osborne that low-income and vulnerable families will feel the least impact of cuts, professionals have voiced concerns that the combination of measures, from rises in VAT to cuts to child tax credits, will pose a significant challenge to the poorest families.

Dr Katherine Rake, chief executive of the Family and Parenting Institute, said: "With the Child Trust Fund being abolished, child tax credits being cut for many ordinary families and child benefit frozen for three years, parents might be forgiven for suspecting they are in the frontline for cuts.

"Each separate announcement on the likes of raising VAT and cutting tax credits might sound manageable. But when considered together as a package, it’s clear this Budget will mean significant pain for families.

"The poorest families will feel the impact most acutely. But middle-income families will feel the squeeze too, especially as many work in the public sector, in schools and hospitals."

Bob Reitemeier, chief executive of the Children's Society, said: "We believe the new government has tried to be fair. The Chancellor claimed this Budget will not increase child poverty, but sadly we believe we are still in danger of creating the new poor. Hiking up VAT, ending payments like the Health in Pregnancy Grant and slashing child tax credits at a £40,000 joint income threshold is all going to put pressure on a lot of families already struggling to make ends meet. The freezing of child benefit for three years is a big blow for very vulnerable families. We are also concerned about the amount to be clawed back from the Welfare Bill over the next five years as the Chancellor aims to find savings of £40bn."

Anne Longfield, chief executive of 4Children, said: "We welcome the retention of child benefit as a universal means of support for all families. The poorest families will also benefit from the increase in income tax personal allowance and the rise in the children’s element of tax credits.

"However, the increase in VAT will come as a blow to low-income families who already pay a larger proportion of their income on VAT. The impact of the withdrawal of tax credits from hundreds of thousands of families with incomes above £40,000 should not be underestimated."

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