Falling child poverty raises questions
The most recent child poverty figures show the success of the previous government's approach. But it also shows the limits. The coalition has identified some weaknesses, but leaves fundamental problems unaddressed.
The latest child poverty figures, for the year 2009/10 have been published. They relate to a period under the previous administration, putting them in a slightly strange position. If they are good, the government has little interest in trumpeting them. If they are bad, there is no one to take the blame.
And they were, actually, quite good. On the Before Housing Costs measure, the number of children living in households whose income was below 60% of the median fell by 200,000, to 2.6 million. This is the biggest single year fall since 2000/2001. It means that, since the start of the recession, the number of children in poverty actually fell by 300,000.
Almost the entire fall in the last year seems to be among lone parent families. Among them, the vast majority was among workless families. One explanation for this fall lies in the tax credit system. Between 2007 and 2009 the maximum amount of money payable per child through Child Tax Credit rose from £47.45 to £56.11 per week. Workless families stood to benefit the most from this increase.
This was Labour's default tactic for attacking child poverty. It was one from which lone parent families– which contain most of the children in workless poverty – benefited especially. And it was effective. At the end of the 1990s, 46% of children in lone parent families were in poverty. In the most recent figures, this had fallen to 28%.
Over the same period, the poverty risk for children in couple households fell from 19% to 17%. The policy had been genuinely successful for one high risk group, and much less so for others. So when the Secretary of State points to the high price of this progress (he indicates around £150bn spent on tax credits), he has a point.
Iain Duncan Smith says that paying workless households tax credits to keep them out of poverty is unsustainable. Work, he says, echoing the previous government, is the route out of poverty. But it is no guarantee. Most of the children in poverty this year (and for several years now) live with a working adult. Although we may tire of saying that, to really lift families out of poverty, jobs need to pay well, offer enough hours of work and be sufficiently flexible for parents, it doesn't stop being true.
That utopia of well paying, secure work seems miles away. There are 2.5 million people unemployed, a similar number wanting work yet not officially unemployed and around a million more in part time work wanting a full time job. We can add to this disabled benefit claimants being moved from "passive" benefits to more "active", job seeking benefits, and the increasing number of older workers who, due to the rising retirement age or lack of adequate pension provision, will be working for longer than previous generations.
Where will these jobs come from? This combination of economics, policy and demography requires a broad set of policy solutions. It also requires a set of priorities. This may be evident in the new apprenticeship scheme for unemployed young adults. This appears to make the under 25s – rather than, for instance, working parents or disabled people –the priority.
Opposition criticism of the coalition’s approach is understandable. After all, the previous administration’s policies reduced child poverty to levels not seen since the 1980s. But if the coalition is not addressing the problem of low income in work, then nor did Labour. And Labour did not come close to fixing the country’s fundamental shortage of jobs.