Income and Poverty

Measuring poverty: a response to the Independent Review of Poverty and Life Chances

  • Published: Nov 22, 2010
  • Author: Tom MacInnes
  • Category: Income and Poverty

In October, we sent a submission to the Independent Review on Poverty and Life Chances, led by Frank Field MP. The Review posed three questions:

  1. What constitutes child poverty in modern Britain?
  2. How can our measures of child poverty be reformed to better focus policy development and investment on delivering positive outcomes and improved life chances for children?
  3. What are the strong predictors of children’s life chances which might beincluded in any new measure of child poverty?

Below is our submission, concentrating on the second question. 

Measuring poverty

In our series of reports Monitoring Poverty and Social Exclusion, we have taken a broad view of poverty alongside other forms of disadvantage.  We have always looked at low income, most often measured relative to median income in the year in question. But as well as income, we have looked at household employment status, educational attainment, ill health and even crime.There are now four overlapping measures of child poverty on the statute books. Earlier in 2010, the Child Poverty Act passed into law that, by 2020, there should be no more than

  • 10% of children in “relative” poverty – children in households below 60% of the median for that year
  • 5% of children in “absolute” poverty – children in households below 60% of median income for 2010, adjusted for inflation
  • 5% of children in material deprivation and relative low income combined
  • an as yet undefined proportion of children living in relative poverty for long periods of time

 With the possible exception of the “absolute” target, they take their lead from the definition of poverty elucidated by Peter Townsend in 1979, that poverty is inherently relative to the norms of contemporary society. He said that

"Individuals, families and groups in the population can be said to be in poverty when they lack the resources to obtain the type of diet, participation in the activities and have the living conditions and the amenities which are customary…in the societies to which they belong”

In the Act, household incomes are the “resources”  and a low household income is seen as synonymous with poverty. The main flaw in such an approach is that it narrows the focus, and does so here in two important ways.

Firstly, concentrating on one income threshold disregards the depth of poverty – all those below the threshold are considered equally poor. As a result, the growing number of people living a long way below the poverty threshold was largely unremarked upon by the previous administration. However, a measure of “deep” or “severe” poverty is only a variation of the measure of “normal” poverty. It would not be different in approach or data source so this problem is easily remedied.

The other way in which it narrows focus is that it neglects all the other types of disadvantage which are associated with low income. When looking at indicators relating to children in our reports, we do look at low income but we also look at poor educational outcomes and ill health.

We do not think that, given that low income is associated with these negative outcomes, it is sufficient to concentrate on the incomes alone. This broader approach was used by the previous government in it “Opportunity for All” series of reports, although the report has not been published for three years. This series could easily be reawakened, the measures covering a wider range of topics. 

In all of these indicators, the type of measure is key. But the measure, and the indicators, are only a means to an end. So long as the measure is comprehensible and defensible, it has value. But it is supposed to suggest the direction of trends, and tell us which factors are impacting on the overall direction.  When, in the middle of the last decade, progress in reducing child poverty stalled, it was not the measure that needed reassessing. It was the policies and the overall strategy.

Finally, though, we would suggest that the focus of this review is somewhat narrow itself and the focus on children and life chances repeats one of the strategic mistakes of the previous administration. Under the New Labour government, a once broad strategy for reducing poverty and social exclusion was allowed to narrow to a focus on child poverty. By concentrating on life chances, it will inevitably centre on children in general and early years in particular. Both of these are undoubtedly important.

But as well as a good start in life, people deserve a good middle and a good end. The danger of assuming that all that matters is getting the first few years right, is that, when this does not work, and it cannot possibly work for everyone, there is no safety net to pick people up later in life. Moreover, concentrating only on those who are currently children ignores those who are no longer, and this has led to the current record rates of poverty among working age adults.

In summary, then, measurement of poverty can afford to be broad – in terms of topic, population and extent. The state has the resources to do this kind of measurement, so should do it properly.


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