Rethinking Child Poverty - our response

29 May 2012

Today we had a taste of the debate we’re going to hear more about in the coming weeks – whether the Coalition government should move the goalposts when it comes to measuring child poverty.

A report published by the Centre for Social Justice today voices ‘serious concerns’ with the current headline measures that are encoded in the Child Poverty Act 2010.

It claims ‘our main concern is that the exclusive use of an arbitrary line to measure child poverty tells us almost nothing about how the disadvantaged live their lives’. Except that the poverty line isn’t arbitrary. It is an accepted international measure employed by the OECD and EU, and we use it because when incomes go below this level, material deprivation and many other indicators of well-being deteriorate too.

And the poverty line is not an exclusive measure either. There are four separate ways of measuring child poverty encoded in the CPA, along with a broader duty to take action to tackle socio-economic disadvantage. The Act also requires government to consider a number of ‘building blocks’ in its strategy including skills, parental employment, education, childcare and housing.

So far, so wrong. But the CSJ report goes from bad to worse. It gets into an unholy mess by claiming that a relative poverty measure is ‘methodologically flawed’ in that ‘the poor will always exist statistically’, making the 2020 child poverty targets ‘almost impossible to achieve’.

This is nonsense, and can only stem from a failure to understand the difference between the median income (the middle income) and the mean income (the average income). In fact, it is statistically possible for every household currently below the poverty line to move above it without the poverty line itself shifting as a consequence. And other countries have already met the 2020 targets: if they can, so can we.

At other points the report is just sloppy. For instance, it states that ‘during Labour’s 13 years in office, there was only a 6 per cent reduction in the number of children deemed to be in poverty’. In fact, child poverty reduced from by 900,000 children to reach 2.6 million in 2010 (before housing costs). This is a 26% reduction in the number of children living in poverty. What they should have said was the child poverty rate was reduced by 6 percentage points (from 26% of children to 20% of children, before housing costs according to HBAI 2009/10).

Finally, it raises the tired old claim the child poverty targets resulted in families being moved just below the poverty line to just above it. Yet the ‘poverty plus a pound’ thesis has been decisively disproved: IFS analysis shows for example that the poverty line could have been set at any point between 43% and 100% of median income in the last decade, and we would still have witnessed significant reductions in child poverty.

Few would dispute that poverty is not just about income alone, and that is why we all concern ourselves with a wide range of other indicators of child wellbeing, many of which have been highlighted in the UNICEF report also published today. The CSJ takes a large leap in logic when it asserts that because income is not the only dimension of poverty, we should relegate it as a measure.

In fact, the CSJ discloses its real objection to an income measure when it attacks the last government’s approach to child poverty. Characterising previous strategy as ‘short term, narrow and expensive’, the report suggests that the measure led to ‘astoundingly high levels of income redistribution, but has very little to show for it’.

It is difficult to see how anyone could consider lifting 900,000 children out of poverty as a waste of money. In fact, it is difficult not to regard many of the arguments advanced in the CSJ report as little more than a smokescreen to allow the government to claim to do ‘something’ about poverty without spending any money. If poverty is about income, self-evidently we need to bolster family incomes. But those who attack poverty measures (however poorly) provide cover for the coalition to keep cutting the incomes of poor families, while claiming to champion their cause.