RESPONSE TO ANNUAL CHILD POVERTY FIGURES

Leading child poverty group welcome new figures but warn government of ‘crunch time’ ahead
30.03.04

Responding to the annual Household Below Average Income Figures for 2002/03 (HBAI) which is published today and which are recognised as the key indicators of child poverty in the UK, the Child Poverty Action Group’s Dr Paul Dornan said,

“Today’s statistics show a further 200,000 children have been lifted out of income poverty in 2002/03 which is good news. We also recognise that the increases in tax credits in April 2003 are not covered by these figures and so, the child poverty figures will get better and will ensure the government are close to their five year target.” said Dr Dornan.

“But a real crunch time is coming up for the Government.” He added. “We still experience extremely high levels of child poverty in the UK. This summer we know the government is to conduct its spending review, which will influence future priorities. It is essential that the government mark out large levels of spending to ensure that substantial reductions in child poverty is a year on year event.”

“Again we see that when you measure income poverty more children are categorised as poor after you have accounted for housing costs (3.6 million) than before (2.6 million). Housing costs bear particularly on families with children, since housing costs are fixed and usually the largest element of a families’ spending. It is therefore crucial to include this in an effective measure of child poverty to properly understand the disposable income families have to spend”

“We recognise that the government has demanding pressures on its finances, but the UK still has some of the highest levels of child poverty in the EU, compared to countries such as Denmark and Finland. There is much to do and we call on the government to re-double its efforts.” he said.

ends

For further information:
Ashley Riley
Press Officer
020 7812 5216 or 07811 324339
ariley@cpag.org.uk

Notes:

• The 2002/03 HBAI report is published by the Department for Work and Pensions. Press Copies can be obtained by calling 020 7238 0866, or download a pdf fo the DWP press release: http://www.dwp.gov.uk/mediacentre/pressreleases/2004/march/nsfirstrelease0203.pdf
  
• The official targets on reducing child poverty are to reduce by a quarter the number of children living in low-income households (defined as living in households with a needs adjusted income below 60 per cent of the national median, both before and after housing costs) between 1998/99 and 2004/05. Beyond 2004/05 the target is to halve child poverty by 2010 and end it by 2020, but this appears to rely on a different way of measuring child poverty.
  
• The Department for Work and Pensions brought out a review of the way in which it measures child poverty in December 2003 proposing three new measures: an absolute low income measure, a relative low income measure and a material deprivation measure. The relative low-income measure is similar to the one currently used but only on a before housing costs basis only. Housing costs bear particularly on families with children and so it is important to account for housing costs in the measurement of child poverty. The impact on the numbers of children categorised as poor on this new relative income measure is substantial. Using data from 2002/03 the impact of this shifts the number of children defined as poor from 3.6 million (relative income, on an after housing cost basis) to 2.9 million (on the new relative income measure on a before housing costs basis). CPAG is arguing for housing costs to be properly included for in the material deprivation measure to account for this.
  
• CPAG promotes action for the relief, directly or indirectly, of poverty among children and families with children. We work to ensure that those on low incomes get their full entitlement to welfare benefits. We receive no money from the Government and rely on donations. In our campaigning and information work we seek to improve benefits and policies for low-income families, in order to eradicate the injustice of poverty.