24 March 2006
Yes, the government missed its 2004/05 target for reducing the number of children in poverty – but it has made some heartening progress towards the overall goal. Ian Kearns explains what it needs to do now
This week's Budget was Gordon Brown's opportunity to get back on track with meeting the child poverty targets. This has been the subject of intense debate since the government announced on March 9 that it had missed by some 300,000 its 2004/05 target to get one million children out of relative poverty.
Some campaigning groups immediately slammed the government, calling the figures devastating for the future of the UK's poorest children. At the same time, opposition politicians, seizing on research conducted by the Institute for Fiscal Studies, accused the government of incompetence in the administration of the tax credits system, with up to 200,000 people erroneously receiving payments intended for lone parents.
A lot of heat has been generated but, sadly, not much light. We now need to step back and reflect on the progress made to date, on what it tells us about the nature of the current government, and on the scale of the problem we still face. Only against that backdrop is it worth asking where the policy should go next.
Let's get some facts on the table first. A country of this wealth cannot be satisfied with 3.4 million children still living in relative poverty. However, in the past six years, some 700,000 have been moved to the right side of the poverty line. This progress is no small achievement, regardless of what many of the critics say. It was this government, like none previously, that put the issue centre stage, despite the political risks.
Ministers deserve credit too, for immediately
re-committing to the target of halving child poverty by 2010, despite the failure to meet the 2004/05 target. We should also note that the improved child poverty figures form part of a wider set of achievements, in which government activity through the tax and benefits system has stopped further growth in income inequality and lifted a total of 2.4 million people out of poverty since 1997, a million of them pensioners. This tells us a lot about the character of this administration. The lesson we should learn from it is that the government certainly deserves to be challenged and supported to go further, faster, but it does not deserve to be condemned as a failure.
That said, there should be no illusions about the remaining challenge. To meet the 2010 target, and therefore to stay on track for eradicating child poverty by 2020, the government must now play catch up and not only sustain the current rate of progress but accelerate it. To achieve this, it must do four things.
First, it must keep the underlying causes of child poverty in the foreground as policy is developed. These causes are worklessness on the one hand and low pay on the other. The proportion of UK children living in workless households is the highest in Europe and many of these households are those of lone parents. It is a sobering fact that half of all children living with only one parent are living in poverty, where this is defined as an income of 60% of the median household income, or less.
Other groups affected particularly badly are the parents of disabled children, and more than three in five children in Pakistani and Bangladeshi families. There is also a particular problem in inner London, where more than half the children live below the poverty line. In terms of low pay, those in part-time and unskilled work suffer most, and often have few opportunities to progress further in the workplace.
This gives us some important clues as to where policy must focus. The government is right to stress, as in its recent welfare to work green paper, schemes aimed at getting key groups such as lone parents back into work. Pathways to Work pilots, which have been a particularly effective policy innovation in relation to disabled people, should have a positive impact on lone parent employment rates as they are rolled out to this group.
One of the biggest barriers to increasing the lone parent employment rate, however, is the inaccessibility of high quality and affordable child care. There is a lack of early years provision in the 20% most deprived wards in the country. In addition, some parents find it difficult to get child care, particularly those on low incomes, with disabled children and from some ethnic minority groups.
The Institute for Public Policy Research has called for a new child care settlement, which would offer all parents free, high-quality, part-time child care, with full-time care available on a means-tested basis.
Our proposals also called for improvements in the training and quality of child care staff and for measures to increase the availability of care in the most deprived areas. If these ideas were implemented, the government could wrap other measures around them, such as improved financial incentives for lone parents to work, language training and culturally sensitive child care provision. This would provide a platform to more conditionality in relation to benefits payments for lone parents with children of secondary school age.
Such a new settlement, in the context of continued benign macro-economic conditions, should put a significant dent in the level of lone parent and ethnic minority worklessness and reduce child poverty levels as a result.
Second, the government must use the findings of the annual Family resources survey to broaden its understanding of poverty and its effects. The most recent survey deployed additional questions relevant to new material deprivation indicators. The findings, when released, will tell us a lot about non-income aspects of poverty, such as bad, overcrowded housing, and limited leisure and education opportunities.
This data needs to underpin a fresh wave of policy thinking and the new indicators need to sit alongside the income measure in future as a guide to whether government action is improving the lives of millions of poor families.
Third, the government must increase spending on tax credits and benefits to the tune of at least £1.4bn a year – and most probably by up to £2bn a year – if it is to stay on track to meet the 2010 target. It must do so despite facing the tightest fiscal climate since it came to power. This means raising taxes, increasing borrowing, or finding savings from other budgets. None of these options is easy, but without the additional spending there is virtually no chance of staying on track for the desired outcome in 2010.
Fourth, and given the financial realities, the government must now explain more vigorously to the country why it is so important that the child poverty targets be met, even in the context of tough spending choices and other competing priorities. This government's main reason to exist, after all, is to deliver sustained and sustainable progress towards a more socially just society. This, it knows, requires far more than provision of a minimum income to fend off absolute poverty among the poorest of the poor.
It requires a commitment, as far as is possible, to remove the inherited disadvantages of class, ethnicity and gender which lock many into an unfair cycle of limited aspiration and opportunity. Since we now know from the available research that the most critical period affecting life chances is the period between birth and the age of three, it is clear that few objectives are more central to social justice than the objective of eradicating child poverty.
It is this, the vision of the socially just society as contrasted with its unfair and divisive alternative, that is at stake in this policy debate. The government, with all the clarity it can muster, now needs to say so.
Ian Kearns is deputy director of the Institute for Public Policy Research
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