By Neil O'Brien, Director of Policy Exchange.
In the FT this morning Nick Timmins suggests that the Conservatives are considering widening the child poverty target into a wider set of indicators in order to get a more in-depth measure of poverty.
The current child poverty targets certainly need to be reassessed, because they are distorting and undermining anti-poverty policy.
As Professor Peter Saunders pointed out in a recent Policy Exchange paper, the current targets are not really child poverty targets at all. They are in fact income inequality targets – aimed at reducing the number of children living in households below 60% of median income.
Among many other perverse aspects of using this as a target, it means that recessions “appear” to reduce child poverty, because the median income falls while the incomes of those on benefits do not. This suggests there’s something seriously wrong with the target.
The most serious problem with the current targets - which the government’s Child Poverty Bill reproduces in slightly modified form - is that they push policy makers relentlessly towards tackling the symptoms of poverty (by increasing benefits) rather than tackling the causes of poverty. According to the Institute for Fiscal Studies, the Government needs to spend £4 billion extra on benefits to hit the 2010 target or and £19 billion to hit the 2020 target.
But if what you want to do is tackle poverty, is this really the best use of the money in the long term? Is it better to spend a pound on increasing benefits, or a pound on improving education for the poorest?
Simply increasing benefits could potentially worsen poverty in the long term if it creates incentives not to work and makes it harder to escape from the benefits trap. But the Bill makes it legally binding that the government must choose to spend the money on benefits.
If only it were so simple – if we could just write a big cheque and make poverty history. Sadly it isn’t. On one level the government recognises this: the Bill says the government will have a strategy looking at all kinds of aspects of poverty. But this more broadly based approach is undermined, because only the income measures are turned into legally binding targets.
Social research has identified the factors that put people at risk of ending up in poverty: living in a jobless household; low educational attainment and erratic school attendance; living in sub-standard housing or temporary accommodation; infant mortality rates, serious childhood injuries and registration on the Child Protection Register; teenage smoking and obesity; family breakdown; teenage pregnancy; children in care homes who are not adopted. All of these factors should be given equal weight with income, rather than picking on only one aspect of poverty.
The 60% target also tells you nothing about the depth of poverty. Incomes cluster just above and just below the line, so possible to bring about big changes in the headline numbers by giving people just below the line just enough cash to get over it. It is also an arbitrary measure. If you picked 50% of median income rather than 60%, then exactly the same proportion of people are in poverty as in 1997. If you chose 40% of median income then the proportion in poverty has gone up since 1997 (from 8% to 10%). So hitting getting people over one arbitrary line is not a guarantee that you are making overall progress.
If instead you target the causes of poverty directly - then progress is unambiguous. We could start by looking at some of the dimension of poverty on which the UK is the most extreme. Why does the UK have more children growing up in workless households than any other country in Europe? Why is our youth unemployment rate the highest?
Yvette Cooper has acknowledged that "Labour’s child poverty targets have never been just about poverty; they have always been about narrowing the unfair inequalities”. But the government should recognise that there is sometimes a choice between tackling inequality and tackling poverty. Most people think poverty is more important.
