Higher benefits and better indicators needed to cut poverty, claim charities

At a time when the government is looking increasingly
beleaguered, good news about the fight against poverty would help
disarm those arguing that the leadership is out of touch with
traditional Labour values. It is no surprise then, that the work
and pensions secretary Andrew Smith was upbeat about the latest
poverty statistics.

Opportunity for All, the government’s fifth annual poverty
report, shows it is making progress on key indicators, including
the numbers of children and pensioners living in
poverty.¹ Employment rates for disabled people, older
workers and people in deprived areas are also moving in the right
direction. Overall, only two measures out of 55 – burglaries and
the numbers of teenagers not in education, training or employment –
got worse in recent years.

But, as Smith acknowledges, there’s still a long way to go. On 10
of the measures, the government has failed to make any progress at
all since the poverty indicators were introduced. These include key
measures such as the number of children living in persistent
poverty (on a very low income in at least three of the four
previous years), the number of 16 to 18 year olds in education, and
life expectancy at birth.

On another 12 indicators, it is hard to say what the trend is,
either because it is too early or because only baseline data is
available – for educational attainment at age seven in Sure Start
areas, and smoking rates for pregnant women, for example.

Despite the progress made on reducing the number of children living
in poor families through measures such as Welfare to Work and the
introduction of higher benefits rates and tax credits for children,
there is a consensus that the government won’t reach its targets on
cutting child poverty without a substantial further uprating of the
child tax credit for the poorest.

Martin Barnes, director of Child Poverty Action Group, is
campaigning for an extra £5 a week on top of the £38.50
paid for every child in very low income families. He also believes
that reform of the Social Fund is vital to boost the incomes of the
very poorest children.

“The 60 per cent median income figure [the official measure used
for assessing relative poverty] doesn’t tell you enough about how
deep they are in poverty,” he says. “Some families are experiencing
very intense poverty and hardship, especially in families where
no-one is in work. Not all families receive all of the benefits
they are entitled to and many families are in debt. Half of lone
parents are paying back Social Fund loans.”

Benefit levels have never been intended to allow for the purchase
of essential items like beds and cookers, and for many poor
families the only means of replacing such essentials is through a
loan from the Social Fund. Barnes points to a recent report,
published by Save the Children, which highlights the plight of
children growing up in severe poverty in homes lacking essential
items and without access to key services.² He believes
the present poverty targets need to be augmented by the
introduction of specific indicators that measure severe
hardship.

The older people’s charities have similar worries about the lack of
progress on pensioners living in persistent poverty. Paul Cann,
director of policy at Help the Aged, says: “It’s a huge concern
that some two million pensioners live below the official poverty
line. The picture has hardly changed in the past decade. It’s a
failure of all governments to focus on the poorest.”

While the minimum income guarantee has lifted many pensioners out
of poverty, many more are failing to apply for it. “All the older
groups say ‘we hate handouts’. The government is trying to soften
it by presenting it as a credit. But around £2bn a year still
goes unclaimed,” Cann explains.

One step towards tackling the problem of persistent poverty would
be to increase substantially the entitlement of pensioners over 75
who are much more likely to be totally reliant on state benefits or
living on dwindling incomes than younger pensioners. Cann wants to
see clear targets set for cutting pensioner poverty similar to the
specific and timetabled child poverty targets.

Despite improvements in the proportion of older people in work,
Andrew Harrop, policy officer at Age Concern, is concerned about
high levels of unemployment among the over-50s. This is a time when
many people look to building up their pension contributions to
avoid poverty in retirement, Harrop says. “People in their 50s and
60s are often out of work because they are sick or disabled or
because they’ve been made redundant. We’d like to see much greater
support in terms of Welfare to Work and early implementation of the
EU Directive on age discrimination.”

Criticisms also remain about what the poverty indicators fail to
include. For example, only one disability-related measure is
included – the employment rate for disabled people – despite
disability being a potent cause of poverty.

This year’s report provides detailed discussion of disability and
poverty, showing for example that a household with either a
disabled adult or a disabled child is around 50 per cent more
likely to be poor than a family where no-one is disabled.

Lorna Reith, chief executive of the Disability Alliance, points out
that there are no targets for reducing the number of disabled
children in poverty or the numbers of families with a disabled
parent in poverty, both of which would reveal how far the
government is succeeding in targeting these groups who are
disproportionately likely to be poor. She adds: “They call it
Opportunity for All, but the indicators are all about
work. Most disabled people are not in work. Where’s the
government’s measure of how adequate their income is?”

Ruth Lister, social policy professor at Loughborough University,
questions why some of the indicators have been included in a report
on poverty. Take the education measures for example, she says.
“Some of the targets could be met without doing anything to tackle
poverty. While there are clear links between educational
achievement and poverty, you could have real improvements in
education but they would still be poor children.”

This ambiguity may partly reflect the government’s reluctance to
speak out publicly on child poverty out of fear of offending
elements of public opinion. Lister goes on: “The government is
doing a lot. In a sense they don’t give themselves enough credit
for what they’ve done. They’ve been quietly channelling financial
resources into families out of work.

“Initially people like me were shouted down for being Old Labour
dinosaurs for asking for it, but there has been a really
significant improvement in the real value of income support for
children.”

Aside from the question of children living in severe hardship, it
is not clear exactly how the government will be measuring progress
against its targets of halving child poverty by 2010 and reducing
it by 25 per cent next year. Barnes explains: “In the last budget,
the chancellor said he wanted to make faster progress, but we don’t
know what measure of child poverty he intends to make progress
against.”

The Department for Work and Pensions is looking at broadening the
60 per cent average income measure to include a basket of measures,
possibly including indicators of inequality in education and in
access to health and other services. These could be helpful,
provided the government doesn’t use it to wriggle out of its
commitment on improving poor children’s incomes.

But, as Barnes acknowledges: “I don’t think people are going to
condemn the government for falling just short of reaching the
target. It is the first government for a long time that has been
prepared to look at poverty.”

¹
Opportunity for
All, The Stationery Office, at
www.dwp.gov.uk/ofa

² Adelman, Middleton and
Ashworth, Britain’s Poorest Children, SCF,
2003