An elusive target

Has the government’s drive to end child poverty so far
been a success or a failure? It just depends on how you measure
poverty, writes France Rickford.

The Prime Minister and chancellor Gordon Brown have committed
themselves to reducing child poverty in the UK by a quarter by
2004, to halve it by 2010 and to abolish it entirely in 20 years.
But shortly before last month’s budget the opposition accused
Labour of moving the target when it emerged that only half as many
children as predicted had passed the threshold of 60 per cent of
median household income. Last December the Treasury claimed that as
a result of tax and benefit reforms introduced in the last
parliament, there were 1.2 million fewer children in poverty than
there would otherwise have been.¹ But figures released
last month showed there has been a much smaller fall in the
official child poverty rate. The resulting controversy has raised
questions about how to measure child poverty.

A paper by the Institute for Fiscal Studies explains why the
government could have been right about the effect of its policies
even though it was wrong about the figures.²

The first problem is that trying to change relative poverty
means aiming at a moving target. If average incomes grow each year,
the relative poverty line – the number of children in households
with incomes below 60 per cent of average – will also be constantly
changing, affected not only by wage levels but also by the number
of people in and out of work. If you measure child poverty today
against average incomes when the government first made its promise,
you would get a very different result.

The second problem is that things do not always happen as
quickly as you hope, and people do not behave as you expect.
Poverty figures are released on an annual basis and the full
effects of, say, recent benefits increases are likely to
underestimated.

Thirdly, people do not always claim the new benefits they are
entitled to, or as quickly as they could. Or they have to wait a
long time, sometimes in great hardship, before their applications
are processed and they receive the money they are due. So measures
which in theory should increase the incomes of the poorest may
impact only on some of those targeted.

The issue of measuring poverty only by counting the numbers
below a certain proportion of average income has been criticised by
many, and it can produce perverse results. In Ireland for example,
where the economy has been growing at about 7 per cent a year,
unemployment has fallen, wages have risen and social security
payments have increased. The incomes of low paid people and those
without jobs have been rising, but not as fast as average incomes,
so relative poverty has been rising. The same problem in reverse
has occurred in some eastern European countries where average
incomes – and living standards – have fallen sharply. So falls in
relative poverty can occur even when everyone, including or even
especially the poorest, are actually getting
poorer.³

There are other problems with using a single measure of relative
poverty alone, as John Hills of the Centre for Analysis of Social
Exclusion at the London School of Economics suggests.⁴
For example, it reveals nothing about the depth of poverty – you
would get the same result if everyone below the threshold was just
below it as you would if they were all destitute. Neither does it
measure how long children have lived in poverty, although the
persistence of poverty is likely to be very significant in terms of
its impact on children’s long-term prospects. Other problems
highlighted by Hills in measuring relative income are that the
cut-off point is inevitably arbitrary; that there are lots of
different ways of looking at and defining income; and that low
income is not necessarily the same thing as deprivation.

But few people want to do away with measures of relative poverty
altogether, especially when an important objective of reducing
poverty is to reduce social exclusion.

A league table of child poverty in 19 of the richest nations
drawn up by Unicef distinguishes relative from absolute poverty.
The UK is fourth from bottom on relative poverty and sixth from
bottom on absolute poverty – and the report suggests both are
equally important and should be monitored, and reduced with equal
vigour.

Another issue that complicates the discussion about measuring
and reducing child poverty is that governments can only measure
household income and have few means of monitoring or controlling
how income is distributed within households. This was a
controversial issue when child benefit was introduced in the UK by
Barbara Castle in 1975. Payment of the new benefit was delayed by
two years because it was to be paid directly to the main carer –
normally the mother. It had replaced both family allowance and the
child tax allowance, which would have benefited the pay packet of
family’s main wage earner – normally the father. Research quoted in
a report by Unicef’s head of research John Micklewright suggests
that money paid to mothers is more likely to be spent on children
than money paid to fathers, and according to one study low income
parents, especially mothers, are more likely to go without
essentials than their children.⁵

One way governments can contribute directly to children’s
welfare is through public services. Labour has introduced a series
of initiatives – Sure Start, the Children’s Fund and Connexions in
particular – which aim to compensate for the effects of family
poverty and disadvantage by providing new services directly to
children. The effectiveness of these interventions in improving
outcomes for children will take a decade or more to demonstrate,
and a key issue is whether they are able to provide support to
those children whose families are the most marginalised and
disadvantaged. Early results from the Sure Start national
implementation study released at the Sure Start conference in March
suggested that the hardest to reach groups were proving to be
prisoners’ families, parents infected with HIV and travellers.

Now the government is reviewing the way it measures child
poverty, looking at a series of proposals all of which take a wider
view of it than the current threshold of 60 per cent of median
national income. Among the additional indicators being considered
are absolute and persistent low income, worklessness, educational
attainment, health inequalities and housing standards. Cynics are
already accusing Labour of moving the goalposts on its election
commitment, but others believe that finding the most meaningful
method of monitoring progress is an important part of getting
policy right. No one is claiming the UK has not got a long way to
go before it can claim all its children have decent lives and
opportunities. But knowing where you’re aiming is a good first
step.

¹ Tackling Child Poverty – Giving Every
Child the Best Possible Start in Life: a pre-budget report, HM
Treasury, 2002

² M Brewer, T Clarke, A Goodman, The
Government’s Child Poverty Target: How Much Progress has been
Made? Institute for Fiscal Studies, 2002

³ See Child poverty in Rich Nations.
Unicef Innocenti Research Centre 2002, www.unicef-icdc.org

⁴ Child Poverty in the UK: Where Are We
Starting From? John Hills Centre for Analysis of Social
Exclusion, LSE, 2001 (Presentation at a conference organised by the
Institute for Public Policy Research)
http://www.ippr.org.uk/research/files/team24/project73/johnhillspres2.pdf

⁵ J Micklewright, Social Exclusion and
Children: a European View for a US Debate, 2002, Centre for
Analysis of Social Exclusion, London School of
Economics.

– The consultation document Measuring Child
Poverty can be found at
www.dwp.gov.uk/consultations/consult/2002/childpov/index.htm