Government has “no hope” of reaching its target on reducing child poverty

It has been clear for months that the government has no hope of meeting its legal target on reducing child poverty.

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Vidhya Alakeson is Research and Strategy Director for the Resolution Foundation

It has been clear for months that the government has no hope of meeting its legal target on reducing child poverty.

lady childThat realisation has kicked off a lively debate about whether or not the legal target itself should be scrapped.

While that debate has distracted many, a more important issue lurks beneath: how far can you reduce child poverty (whether or not you are trying to hit a target) by getting parents into work rather than through redistribution.

The current government thinks it can make employment alone an effective route out of poverty and is cutting back tax credits accordingly. But even in good economic times, employment was not sufficient.

Tax credits played a major role in making work pay. In fact, the challenge of trying to raise family incomes with less support from tax credits is the troublesome one of improving wages for Britain’s growing number of low paid workers.

Labour made in-roads in terms of reducing child poverty by moving lone parents into work. Worklessness among lone parent households fell by 10 percentage points between 1997 and the start of the recession.

But according to analysis by professor Richard Dickens, investment in tax credits and benefits contributed three times as much as employment to reductions in relative child poverty among lone parent households.

If Labour could not make a child poverty strategy based on work alone successful when the economy was strong, the chances of success in the current environment of a double-dip recession, high unemployment, significant under-employment and stagnant median wages seem remote.

However effective the work programme and universal credit prove to be, the government has set itself a tough test.


See also:

Tackling child poverty: the story so far 13 Jun 2012

Pickles’ plan to deal with ’120,000 trouble families’ in a tailspin 11 Jun 2012

Child poverty: Absolute and relative 30 May 2012


Today’s economic malaise won’t last forever but the challenge of raising incomes simply by moving people into work will remain because of the dominance of low pay in Britain.

Five million workers in Britain earn less than the ‘living wage’, which is designed to provide a minimum acceptable standard of living.

In six of the 16 sectors in the economy, nearly a third of workers earn below the living wage, with retail having the highest percentage of low-wage workers. And it is not just a problem for younger workers.

One in seven people between the ages of 34 and 45 is low paid and wages tend to plateau after this age. Add to this the fact that the minimum wage has been falling in real terms and wages in the bottom half of earnings are not expected to regain their 2003 level until 2020, it is hard to see how the government’s plan to move people into ‘mini-jobs’ will be adequate to move families out of poverty.

If the government sticks with its current focus on employment, it will have to find ways to raise the wages of low-paid workers, either through better hourly pay or by improving their prospects of progression, and it will have to reduce the costs of working, notably childcare and transport.

Making work pay before redistribution through the tax and benefits system is a goal that we could all agree with as a good route out of poverty. But it is one where policymakers in and out of government are struggling to find good answers.


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16 Responses to “Government has “no hope” of reaching its target on reducing child poverty”

  1. Anonymous

    Why do you give the government credit for trying to? They’re not.

    “current focus on employment”

    How does raising unemployment and involuntary part-time employment (lowering wages) help the situation?

  2. cutchswife

    RT @leftfootfwd: Government has "no hope" of reaching its target on reducing child poverty //t.co/uhbENKsl

  3. Inna Mood

    Government has “no hope” of reaching its target on reducing child poverty – //t.co/a3pNaA92

  4. FiveDee

    Government has “no hope” of reaching its target on reducing child poverty – //t.co/a3pNaA92

  5. Darth Badass

    Government has “no hope” of reaching its target on reducing child poverty – //t.co/a3pNaA92

  6. emmie baker larner

    @TheRightArticle: Government has “no hope” of reaching its target on reducing child poverty //t.co/KDv3WZhd<<and no intention, either.

  7. Mr. Sensible

    What’s more, reducing tax credits reduces insentive to work, so that strategy fails.

  8. Richard Brooks

    Why Labour's aim to eradicate Child Pov by 2020 would have failed, and why the Cons strategy will do worse. //t.co/sUAHpAbJ

  9. Clive Burgess

    Government has “no hope” of reaching its target on reducing child poverty – //t.co/a3pNaA92

  10. Katie Stanton

    RE: IDS's claim that ppl can work their way out of poverty, @leftfootfwd wrote yest about how that isn't possible: //t.co/Fli1vYZW

  11. Marcus A. Roberts

    RE: IDS's claim that ppl can work their way out of poverty, @leftfootfwd wrote yest about how that isn't possible: //t.co/Fli1vYZW

  12. BevR

    RT @leftfootfwd: Government has &quot;no hope&quot; of reaching its target on reducing child poverty //t.co/TMpJVrt4

  13. Ash

    “the chances of success in the current environment of a double-dip recession, high unemployment, significant under-employment and stagnant median wages seem remote.”

    Small point, but doesn’t a stagnant (or falling) median wage actually make it easier to tackle relative poverty? A *rising* median wage, combined with stagnant or falling incomes for low-paid workers, the unemployed etc., would mean more people ended up below the 60%-of-median level, in relative poverty.

  14. BevR

    RT @leftfootfwd: Government has &quot;no hope&quot; of reaching its target on reducing child poverty //t.co/TMpJVrt4

  15. Alex Braithwaite

    RT @leftfootfwd: Government has &quot;no hope&quot; of reaching its target on reducing child poverty //t.co/qNZCGgey

  16. Look Left – Cam and Salm at Leveson, child poverty and saving the NHS | Left Foot Forward

    […] Alakeson on how the government has “no hope” on reaching its target on reducing child poverty here, and the Child Poverty Action Group’s Lindsay Judge on the story so far […]

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