Progress | Centre-left Labour politics

Fuzzy thinking on child poverty and social security

The chair of the Social Mobility and Child Poverty Commission, Alan Milburn, was right to state today the until-now unspoken truth on child poverty – that we are no longer on course to meet the 2020 target.

Better to reappraise the road ahead – and produce a detailed, costed map of what is needed to end child poverty once and for all, as quickly as possible – than to allow that ambition to drift over the horizon.

That drift has been caused by fuzzy thinking that sees the costs of prioritising children as too high, without thinking about the costs stored up for the taxpayers of tomorrow. For child poverty has impacts that are far-reaching and long-lasting.

Independent estimates produced for Child Poverty Action Group and Joseph Rowntree Foundation put the combined cost of children being prevented from reaching their potential, and of government spending on the symptoms of child poverty, to be £29bn a year.

Despite lamenting the poor performance on child poverty, the SMCP assessment seems relatively incurious about why this has happened. Cuts to social security, especially the compounding impact of uprating benefits below inflation are the single biggest reason why Institute of Fiscal Studies projections suggest child poverty is expected to rise steeply in the next few years. Child benefit alone will have lost 14 per cent of its value over the course of this parliament due to a combination of freezes and below-inflation increases.

That is not to say the analysis the commission has published is wrong. It makes strong points on low pay and expensive housing, both of which are major headwinds against poverty reduction. But the commission’s assessment misses an important link – between these drivers of poverty and social security. Progressive politicians and thinkers need to fill this gap, and start making the connections between the broken housing market and low wages and social security.

In the United Kingdom, redistribution does more than in most countries to reduce poverty rates – without it, we would have the second highest poverty rate in the European Union. But UK child poverty remains too high because social security is being asked to do too much of the heavy lifting. There are two linked problems: our starting point is bad, because of the kinds of things the commission identifies – unequal opportunities, low wages, high housing costs. And the social security budget is spread more thinly because of the need to address the costs of these market failures – think tax credits that prop up poverty wages; think the high and rapidly increasing housing subsidy for private landlords.

That said, even where room for manoeuvre is limited, to govern is to choose. Expensive policies like higher personal tax allowances or a new 10p band benefit mostly middle and high earners, while doing little for those on low incomes, and nothing for the lowest earners.

Meanwhile, cuts to social security feed directly into increases in child poverty. Successive governments have made different choices with regard to children, and the evidence is clear that a broad approach is effective. Making work pay, investing in childcare and children’s services and decent family benefits are what lifted a million children out of poverty and led to the UK having the best poverty-reduction performance in the Organisation for Economic Coordination and Development before the recession. So, we would say: yes, progress has stalled, but that is no reason to turn our backs on what we know works.

The target to end child poverty is the right one – morally, of course, but also fiscally, because the costs of its symptoms and the wasted potential it embodies are too high. But the silent retreat from those commitments needs to end, and we agree with the commission that we urgently need a credible plan to achieve the ambitions of the Child Poverty Act – with an equally credible and ambitious target date.

That needs clear thinking, and an understanding that it’s not a question of choices between addressing structural problems in the labour and housing market and protecting social security, between cash transfers and services, or between poverty and financial prudence. What we need is to remake the big choice the parties all signed up to in 2010, to put our children first – and to commit to the steps needed to get us there.

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Alison Garnham is chief executive of Child Poverty Action Group

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Alison Garnham

is chief executive of the Child Poverty Action Group

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