Tim Nichols argues that Ruth Porter’s attack on child poverty targets misses the big picture in favour of a trojan horse attack on the European Union.
Tim Nichols is the Press and Parliamentary Officer of the Child Poverty Action Group
A vocal minority has been gunning for the child poverty targets for some time now. The latest attack comes from Ruth Porter of the Institute for Economic Affairs on Conservative Home.
She starts with a definition of poverty that we very much agree with at Child Poverty Action Group:
People are poor when they cannot participate in society. This means not being able to afford the basics, like housing, clothing and food etc., but it also means not being able to play a meaningful part in what is happening around them.
This almost quotes verbatim one of CPAG’s founders, Prof Peter Townsend, who did more than anyone to establish a relevant definition of poverty for developed economies.
But we cannot agree with her claim that
The way we currently measure poverty for the child poverty targets completely fails to take this into account.
True, during a recession the relative poverty line falls whilst average household income is falling. This makes it an imperfect measure alone. But that is why the act has four targets, the other three being focussed on absolute poverty, persistent poverty and material deprivation.
It was always intended that the focus should be broad across each of these measures to respond to the demands of changing economic circumstances.
Currently, it is important that we keep a particularly close watch on what is happening to the material deprivation measure. This will tell us whether or not more families are able to afford the goods, services and activities necessary to play a meaningful role in the mainstream of society.
Her suggestion that underlying causes of poverty, such as worklessness, were not addressed under Labour is a myth given that the last government explicitly pursued a ‘work first’ approach.
The Institute for Fiscal Studies carried out analysis of the reduction in child poverty by 900,000 children during Labour’s time in office. They concluded that about half the impact was achieved through greater parental employment.
The real agenda behind Ruth Porter’s article seems to be to use child poverty as a Trojan horse for a neoliberal economic attack on the EU. She says:
For families struggling to make ends meet reducing the price of things like fuel, housing and food is key.
You might think this would be a rather good apportunity to mention the shocking rise in fuel poverty, which has been linked at least in part to weak regulation of energy companies, allowing them to take advantage of their customers. But instead of attacking the lax regulatory regime, Porter’s fire moves on to the common agricultural policy.
CPAG’s expertise is of course not on EU agricultural and trade agreements and we do not enter such debates.
However, it is right that the EU prioritises poverty reduction in its social agenda as should any level of government. The cost of goods matters, but this has to be balanced against protection of pay and conditions so parents can earn enough to keep their children out of poverty.
Market failures on provision of decent wages and conditions are a major reason why 6 in every 10 children below the poverty line are in a working household. Wages as a share of GDP have shrunk from about 60 per cent in the 1960s to just 53 per cent today. Wages are less fairly distributed too, so there are now twice as many low paid jobs in the economy as there were in the 1970s.
Sadly, the IEA is banging the drum for the minimum wage to be scrapped. We believe this would result in even higher levels of in-work poverty and an even higher welfare bill as families would become more dependent on tax credits.
It is utter nonsense to conclude as she does that:
Whether the government hits the current targets is neither here nor there in terms of the lives of real people.
For the absolute income poverty target to be hit, the real incomes of the poorest families must increase significantly.
For the material deprivation target to be hit, far more families must be able to afford the goods, services and activities needed to be part of the mainstream of society.
For the persistent poverty target to be hit, far fewer families can languish in relative poverty longer than three years.
And for the relative income poverty target to be hit we must not only improve benefit adequacy, but also share wages and the profits of productivity more fairly.
How can anyone seriously entertain the notion that all of this will be neither here nor there to the lives of real people?
The Institute for Economic Affairs founding ideology is market liberalisation.
Unfortunately the evidence that this will end child poverty is detached from the facts. If the IEA is right and it is deregulation of markets that will end child poverty, then you would expect the most deregulated markets, such as the US and the UK, to have the lowest rates of child poverty, whilst regulated social market economies would have the highest.
But the reverse is true. You find (pdf) the world’s lowest levels of child poverty, and the highest levels of child wellbeing, in the strongest social market economies, such as the Nordic countries.
Ending child poverty is a massive challenge that requires fresh ideas. But ignoring relative poverty, being indifferent to low pay and cutting benefits don’t even have the excuse of being novel and untested. They’re the old ideas behind why child poverty exploded in the 1980s.
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• How can we fight child poverty without hitting people’s pockets? – Matthew Butcher, December 8th 2011
• To end inequality without redistribution of wealth, we should pay a living wage – Duncan Exley, December 8th 2011
• Economic gloom is killing Britons’ sense of common interest – Anne Summers, December 7th 2011
• New video from the Fair Pay Network makes the case for a living wage – Alex Hern, November 28th 2011
• Citizens UK: “The Big Society is flawed if people have to work two jobs” – Peter Carrol, October 21st 2011
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