Budget 2008: The child poverty debate

Alistair Darling’s first budget will test the government’s commitment to reducing child poverty. Charities have outlined what is needed for the government to keep on track.  

The government’s pledge on child poverty

On coming to power, Labour said that it would aim to reduce child poverty by a quarter from 1998-99 to 2004-5, halve it by 2010-11 and eradicate it by 2020. Its chosen measure of child poverty is the number of children living in households where income is 60% of the median, before housing costs are taken into account, (although it originally chose to measure it after housing costs).

Progress so far

According to 2005-6 figures, 3.8 million children lived in poverty after housing costs and 2.8 million before housing costs (22% of all children). Had the 2004-5 target been met, child poverty should have been reduced to 3.3 million after housing costs and 2.5 million before housing costs.

Even the 2005-6 is a backward step as child poverty before housing costs actually rose from 2.6 million in 2004-5.
Latest figures from the poverty site show:

• Children are one and a third times more likely to live in low income households as adults.

• Half of all the children in low income households have someone in their family doing paid work

• Although the number of children who are in workless households has fallen by a fifth over the last decade, the UK still has a higher proportion than any other EU country.

Government commitment to 2010 target

A DWP report last month effectively admitted that the target to halve child poverty by 2010 would not be met. However, as recently as December, in the Children’s Plan, the government reiterated its commitment to the 2010 target with the launch of it Children’s Plan. In October, the government set up a child poverty unit, based in the Department for Children, Schools and Families, designed to drive its child poverty agenda. However, this came directly after the pre-budget report (also in October), when the government was heavily criticised for producing measures designed to only lift 100,000 children out of poverty.

What measures are needed 

The Child Poverty Action Group called on the government last week to spend an extra £4bn. Commenting on a report from MPs it said that the extra investment was needed to keep the government’s pledge to reduce child poverty. It also warned that the rush to “force lone parents into the unsuitable Jobseekers Allowance regime may go badly wrong”.

The IPPR has called for the chancellor to take steps to lift the working poor out of poverty – 1.4 million children in poverty live in households where one parent works, the same as in 1997. It calls for increased tax credits and for individual tax allowances for couples allowing each parent to earn up to £100 a week each before having to pay tax. The think-tank also outlined a series of other measures to improve social care services
The Institute for Fiscal Studies estimated last year that for the government to have a 50:50 chance of meeting the 2010 target it must spend an extra £3.4bn.

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