Now for the hard part


    Halfway through his first term, Tony Blair suddenly announced a
    20-year mission to eradicate child poverty. It was March 1999 and
    followed Labour’s self-imposed two-year public spending
    freeze and cuts to lone parent benefits that split the party almost
    before it had begun to govern. The number of children living in
    income-poor families had barely fallen from its 1997 peak. It
    hardly seemed the time for rhetorical gestures, but there it was:
    “Our historic aim is that ours is the first generation to end
    child poverty for ever.”



    Right on cue the introduction of the national minimum wage the
    following month and working families tax credit in October that
    year did begin to make a difference. The government set public
    service agreement targets that committed it to cutting the figure
    of 4.4m children in poverty by a quarter by 2005, a half by 2010
    and abolishing it altogether by 2020. Most pundits are agreed that
    this year’s first target will be met, bringing the mass of
    children in income-poor households down to 3.3m, though official
    confirmation will have to wait until the Households Below Average
    Income (HBAI) statistics are published next year.



    The same pundits, however, also tend to agree that meeting the next
    set of targets will be much tougher. While the better-off have paid
    more taxes to raise the living standards of the poor, though
    without any corresponding reduction in income inequalities, it has
    been a case of redistribution by stealth. All the indications are
    that the government will have to make a much more convincing public
    case for the further redistribution that will be necessary to reach
    the 2010 target.



    “Most of the gains have depended on those who can start work
    – two-thirds of the reduction in poverty can be put down to
    people getting jobs,” says Jonathan Bradshaw, professor of
    social policy at the University of York. “Even if the labour
    market stays bright, there aren’t many more gains to be made
    through it. Most of those it is easy to get into employment are in
    it.”



    Chancellor Gordon Brown’s redistributive energies have gone
    largely into subsidising employment, much of it low paid. The most
    recent HBAI figures, for 2002-3, showed that about half of all
    children in poverty were poor even though at least one parent in
    each family was in work and receiving tax credits. The Labour years
    had brought a 6 per cent reduction in poverty figures for families
    with a lone parent who was in work and a 22 per cent reduction for
    two-parent families where one of the parents was employed. If this
    situation has improved since, much of it is due to nearly £4bn
    of Treasury investment in families with children – child tax
    credit was hiked by £2.8bn in April 2003 and a further
    £850m a year later.



    Harder still will be shifting more workless families above the
    poverty line. “An anti-poverty strategy based on employment
    is relatively cheap, but lifting people out of poverty who are out
    of work is tougher and much more expensive,” Bradshaw
    says.


    Poverty among children in households with workless couples
    increased by 4 per cent in the first five years of Labour. While
    child benefits have risen in line with overall earnings, adult
    rates of income support have gone up more slowly in line with
    inflation. As poverty is measured relative to general earnings,
    adults dependent on benefits tend to pull families below the
    line.



    The poverty threshold for a couple with two children – set at
    60 per cent of median income – is £336 a week. If they
    are out of work, this couple will receive £161, leaving them
    £175 adrift of the poverty line.(

    1)


    Kate Green, director of the Child Poverty Action Group, says if the
    government is to meet its future targets it will have to raise
    income support in line with earnings and ensure that lone parents
    receive any maintenance entitlements through the Child Support
    Agency.



    “You can’t see benefits for children in isolation from
    those for adults,” she says. “The chancellor announced
    a 55p increase in income support in the pre-budget report, but the
    value of income support needs to rise more rapidly if families are
    to continue to be lifted out of poverty. Otherwise adults end up
    sacrificing the necessities of life in order to provide for their
    children.”



    Lone parents exemplify the risks of emphasising employment rather
    than benefits as the cure for poverty. After eight years Labour has
    increased the proportion in work to about 55 per cent, up 10 per
    cent thanks to a buoyant economy and the New Deal for Lone Parents.
    But the 2010 poverty target depends on getting seven out of 10 into
    work – “most commentators don’t think
    they’ve got a cat in hell’s chance,” says
    Bradshaw – when many live in deprived areas with few jobs,
    where such jobs that exist are part-time and low paid, and where
    lone parents may have little education and few marketable skills.
    Six out of 10 in work may be more realistic.



    So has the work-based approach to poverty run its course? Green is
    more optimistic, but accepts the need for a step change in policy.
    She says: “We’re now dealing with people much further
    below the poverty line, so it’s going to be that much harder
    to get them above it than it was for those just below the line in
    the first five years.”



    More readily available skills training to meet the ever growing
    demands of the knowledge economy is one answer; more accessible,
    affordable child care another, brought a step closer by the
    chancellor’s new 10-year child care strategy. Low income
    families in work qualify for a child care tax credit that covers 70
    per cent of costs, increasing to 80 per cent next year. There are
    331,000 recipients, two-thirds of whom are lone parents. But a
    report from the Institute for Fiscal Studies suggests that the
    child care tax credit has had “almost no direct impact”
    on child poverty.(

    2)


    Like child tax credit, child care tax credit reaches well up the
    income scale. Most recipients, says the institute, are middle
    income families rather than the poorest.



    Former community worker Bob Holman, who has written extensively on
    poverty, says the bill for 30 per cent of child care costs is still
    prohibitive for people paid a pittance in dead-end jobs.
    “Getting people back into work doesn’t necessarily take
    them out of poverty,” Holman points out. “Women pay
    very high child care costs. Even if they get tax credits, once you
    take food and travel into account, they may be no better
    off.



    “First, the government needs to tackle the whole issue of
    child benefits – the best way of relieving poverty is to
    provide universal benefits, which is what child benefit is. It is
    simple, not means-tested and reaches


    99.9 per cent of eligible people. Tax credits are means-tested, not
    easy to apply for and not always well administered.



    “Second, the minimum wage needs to be put at a reasonable
    level, and set according to the cost of a decent
    lifestyle,”  says
    Holman.



    Green, however, says that making child tax credit available to
    middle and even some higher income earners gives it the cachet of a
    universal benefit. Though the government has yet to publish the
    figures, she believes take-up is high. But in its new manifesto,
    Ten Steps to a Society Free of Child Poverty, the CPAG
    calls for the child benefit component to be maximised, while urging
    the introduction of free, good quality universal child
    care.



    Whereas some say the pressure on lone parents to use child care and
    go to work has devalued parenthood, others argue that children in
    workless families should be able to take up child care places.
    Children dragged down by the persistent poverty that often
    accompanies long-term unemployment may gain most from the social
    and educational advantages of good quality child care.



    Research published by the Department for Education and Skills has
    shown that integrated pre-school education has lasting benefits for
    deprived children’s social and cognitive development. It
    could help break the cycle of poverty at a time when social
    mobility between classes is now less than at any time in the past
    50 years.



    The chancellor’s billions are also making little impact on
    several groups of particularly vulnerable children, such as those
    with disabilities or from ethnic minorities (see panel, facing
    page). “There could be as many as a million children here who
    are the most prone to severe and persistent poverty,” says
    Neera Sharma, principal policy and practice officer at
    Barnardo’s. “The government needs to be braver about
    broadcasting the benefits of redistribution. Poverty has such a
    huge cost – excluded children grow up poor with low
    expectations and little education, ending up on
    benefits.”

    A Labour former chancellor allegedly threatened to “squeeze
    the rich until the pips squeak”. Some time between now and
    2020, another chancellor may have to take him at his word. 
     

     


    (1)


    J Bradshaw, , address to JRF centenary conference, December
    2004


    (2)


    Institute for Fiscal Studies, , 2005


     


     


    Child poverty – the facts


    • The cost of bringing up a child averages £50,000 (1997
      prices).

    • In 2002 the estimated cost of a nursery place for a child younger
      than two was £6,650 a year.

    • In 2002 about one-fifth of eligible lone parents took up their
      entitlement to have 70 per cent of their child care costs paid for
      them.

    • In 2001-2 30 per cent of children were living in poverty compared
      with 14 per cent in 1979.

    • Child poverty peaked in


      1996-7 when 34 per cent were income deprived.

    • In 2001-2 54 per cent of children in lone parent households and 22
      per cent in two-parent households were in poverty.

    • Schools in the poorest areas have 10 to 25 per cent of children
      obtaining five GCSEs compared with a national average of nearly 50
      per cent.

    • Nearly 90 per cent of “failing” schools are located in
      deprived areas.


    Poverty – Risk Factors


     


    Percentage of children in different kinds of household who are
    poor:


    • Lone parent, not working: 76 per cent.

    • Couple, neither working: 80 per cent.

    • Family with four or more children: 48 per cent.

    • Family with one or more disabled adults: 39 per cent.

    • Family with one or more disabled children: 31 per
      cent.

    • Asian or Asian British family: 55 per cent.

    • Black or black British family: 46 per cent.

    • Children in all households: 28 per cent

       


    Poverty – the Final
    Frontier


     


    Ethnic Minority Children:


    Percentage of children living in poverty:


    • 22 per cent of children in Indian families.

    • 39 per cent of children in black Caribbean families.

    • 53 per cent of children in black non-Caribbean
      families.

    • 75 per cent of children in Pakistani and Bangladeshi
      families.

    • 35 per cent in Chinese or other ethnic group families.

    • 26 per cent of children in white families.


     


    Disabled Children


    •   55 per cent of the
      families of Britain’s 320,000 disabled children experience
      poverty at some point.

    • 3 per cent of mothers with a disabled child work full time compared
      with 22 per cent of mothers with non-disabled
      children. 

    • There is little specialist child care for disabled children, though
      the new national child care strategy may improve
      matters. 

    • On average it costs three times as much to raise a child with a
      severe impairment as a non-disabled child, a differential not
      covered by benefits. 

    • 70 per cent of disabled adults are dependent on
      benefits.

       


    Homeless Children


    • The number of homeless families has risen 123 per cent to 100,813
      since 1997 – 18 per cent live in bed and breakfasts, hostels
      or refuges.* 

    • The Office of the Deputy Prime Minister has pledged to halve the
      number of people in temporary accommodation by 2010.

    • 750,000 families with children live in poor housing.

    • More than 300,000 families with children live in overcrowded
      housing.


    Asylum-seeking Children


    • 30 per cent live below the poverty line.

    • 85 per cent experience unreasonable hunger.

    • 95 per cent cannot afford to buy clothes or shoes.

    • 80 per cent are unable to maintain good health.


     


    Proportion of children in
    poverty


     


    The measurement of poverty is controversial itself. The standard
    definition, used here, is children living in households with less
    than 60 per cent of median income after housing costs. The 2005
    target will be assessed by this measure. 



    But the 2010 target will have a new threefold measure, comprising
    absolute low income (60 per cent of the 1998-9 median uprated for
    inflation); relative low income (less than 60 per cent of the
    contemporary median before housing costs); and material deprivation
    (less than 70 per cent of the contemporary median before housing
    costs and lacking material necessities).



    The relative low income measure, which comes closest to the current
    one, relies on income before rather than after housing costs. On
    the revised measure, the official statistics for 2002-3 show 21 per
    cent of children in poverty (before housing costs) rather than the
    commonly accepted figure of 28 per cent (after housing costs)
    – see graph. 



    The government denies this is a ploy to make the 2010 target easier
    because it must meet all three measures. The after housing costs
    figure will continue to be published, so cheating will be
    apparent.


     


     


     


     


     


     


     

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