Cuts In Child Poverty Reversed By Coalition!

The Tory-led coalition has specialised in attacks on the poor and the young
The Tory-led coalition has specialised in attacks on the poor and the young

Reductions in child poverty are being reversed by the Tory-LibDem Coalition’s onslaught on welfare benefits, a report from the Child Poverty Action Group (CPAG) has warned.

The charity says the last government cut child poverty at a scale and pace unmatched by other industrial nations – although it did miss targets.

But the CPAG warns that changes to tax and benefits are hitting low income families hardest.

The CPAG report, Ending Child Poverty by 2020, draws on the views of national experts to evaluate progress towards the target set by the Labour government in 1999.

The authors highlight figures produced last year by the Institute for Fiscal Studies (IFS) which show that the number of children living in poverty went down by 900,000 between 1999 and 2010 and that an additional 900,000 were prevented from falling into poverty.

But the report also notes that the interim target set by the Labour government, to reduce by half the number of children living in poverty by 2010, was missed.

In fact, the proportion in poverty fell by just over a quarter from 27% in 1996-7 to 20% in 2009-10.

The report says that although the rate of poverty reduction was lagging behind the original target ‘if the rate of poverty reduction observed over the past decade could be sustained, the 2020 target for eliminating child poverty in the UK would be achieved only seven years later in 2027’.

‘The child poverty approach pursued between 1998 and 2010 was broad-based, made a significant and long-lasting difference to families with children and reduced child poverty on a scale and at a pace unmatched by other industrial nations during the period.’

This verdict comes from a group of leading national experts in a landmark report published today by Child Poverty Action Group, which marks the half-way point to ending child poverty by 2020.

Between 1998 and 2010, child poverty was reduced by around a million children with many other children’s lives being positively affected by the polices used; but the ambitious interim target for 2010, set by the last government, will have been missed.

However, if the rate of poverty reduction observed over the past decade could be sustained, the 2020 target for eliminating child poverty in the UK would be achieved only seven years later in 2027.

The report shows that every year between 1991 and 2008, about seven per cent of people began a lengthy spell of poverty.

But the risks were not evenly distributed: twice as many lone parents (14 per cent) became poor, as did 17 per cent of people living in households in which no one was employed.

Only four per cent of people living in households without dependent children risked slipping into poverty.

While employment offers considerable protection against poverty, most spells of poverty are precipitated by negative labour market events; 42 per cent of spells are associated with a fall in the earnings of the household head due, for example, to unemployment or short-time working.

Eleven per cent of spells are related to a fall in the income of a second worker, emphasising the fact that many families are dependent on two or more workers to keep them out of poverty, a characteristic of a low- wage economy.

People are also vulnerable to falls in benefit income; 27 per cent of all spells of poverty are attributable, in part at least, to this cause.

Risks of poverty for lone parents are particularly high, with almost one in three (29 per cent) experiencing sustained poverty following the onset of lone parenthood.

The decline in the chances of leaving poverty is not necessarily due to people becoming resigned to their status, let alone becoming workshy.

The people who remain in poverty for long periods are often people who enter poverty with characteristics that might conspire to make it difficult for them to leave.

They may live in an area with few job opportunities; they may have limited skills or work experience; they might have health issues.

People may find work and still not move out of poverty, such are the limited opportunities available to people who have been poor for long periods.

Indeed, only 39 per cent of household heads who manage to secure a 20 per cent increase in wages or greater succeed in getting out of poverty as a consequence; for second earners, the proportion is even smaller, at 29 per cent.

An increase in benefit income, usually the result of receiving a different (and sometimes an additional) benefit, is also a mechanism through which long spells of poverty are brought to an end.

Indeed, in numerical terms, this is just as important as increases in the earnings of the household head.

What is less clear, however, is whether in the majority of these cases people are finally getting the benefits to which they are entitled or whether it is changes in their circumstances that make them eligible for benefits that take them above the poverty line.

Kitty Stewart (London School of Economics) who contributed a section on the reduction in relative income poverty, said: ‘Without Labour’s changes to the tax-benefit system, there would have been around 1.8 million more children living in poverty today.

‘Claims that money was thrown into tax credits with little measurable return are simply mistaken, as the evidence shows that the investment paid off, with future benefits still to come.

‘In families most at risk of poverty, such as lone parent households, we observe higher self-esteem, less unhappiness and less risky behaviour among teenagers.

‘That’s not only a good thing for those young people today, but it should mean better life chances in the long-run too.’

Mike Brewer (Professor Economics, University of Essex, and formerly Institute for Fiscal Studies), who contributed a chapter on financial support for children and families, said: ‘It is not accurate to describe the successful reduction in child poverty as just “poverty plus a pound”.

‘The extra investment on benefits and tax credits for families with children between 1997 and 2010 increased incomes amongst millions of families in the bottom half of the income distribution, not just those clustered around the poverty line, providing an unprecedented improvement to the material wellbeing of British families.

‘As a result, child poverty looks to have fallen between 1997 and 2010 regardless of where precisely we set the relative poverty line.’

Alison Garnham, Chief Executive of Child Poverty action Group, said: ‘The verdict is clear that prioritising child poverty across government improved the childhoods and life chances of millions of children and strengthened our economy; but even so, much more needed to be done given the size of the challenge.

‘The warnings for the current government are crystal clear.

‘Under current policies they risk wiping out all these hard-won gains. Unless their strategy improves, their legacy threatens to be the worst child poverty record of any government for a generation.

‘Some critics of the targets to reduce child poverty say we should downsize our ambition and move the goalposts.

‘But that would destroy the life chances of millions of children and force future governments and taxpayers to pick up the bill for the massive and miserable social and economic costs of poverty.

‘As the Prime Minister has said, child poverty is a moral disgrace and an economic waste.

‘Other countries in Europe already have the low levels of child poverty we are targeting, so nobody should make excuses for why we can’t do better for British children.’