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Charlie Elphicke: How Labour has made the very poorest in society even poorer

Picture 1 Charlie Elphicke is PPC for Dover, a regular contributor to the CentreRight blog and a research fellow at the Centre for Policy Studies. Here he summarises his new paper, A House Divided, which is published today and is available to dowload at the CPS website.

Do you remember those heady days back in 1997 when the country was swept with a new hope following the Labour landslide?  Even I, a tribal Tory, wanted to believe in the same way Americans wanted to believe in Obama.  The nation believed that things were going to be different. That change would bring about a better future. That we would, in the words of the 1997 Labour Manifesto “build a Britain we all feel part of” and “tackle the division and inequality in our society.”

Yet hope was drunk.  Nowhere more so than for the poorest in our society. Twelve years on, the gap between the richest and the poorest in our land has increased as my paper published today with the Centre for Policy Studies explores. The rich are richer and the poor are poorer.

The 5 million poorest households are paying more in tax and receiving less in benefits than when Labour came to power, a difference that adds up to £1,300 per annum. And when you have an income of just £4,651 a year that’s a serious amount of money: the effective tax rate for the poorest is actually higher than that for the richest.

Child poverty is rising. It’s up by 400,000 to 4 million on the Government’s preferred measure of relative poverty since 2004/05. Meanwhile, the number of children in deeper poverty has also risen by 400,000 to 2.7 million in the same period. Child poverty is now as high as it was six years ago. And in the recession it can be expected to rise further still.

It doesn’t take a maths genius to see that the Government’s focus on the richest of the poor means that the really poor kids have been neglected and that the number of utterly destitute kids is rising fastest. These are the children that go to school in worn out shoes, don’t necessarily get to eat the amount they need and whose life is a wasteland of deprivation.

A Government that cared would have focused on these poorest of poor children. But not this one. This one focussed on the richest of the poor to meet their target of tackling official child poverty. It’s all a bit like the Tin Man: no heart.

The least well off are hardest hit but, you know, we’re all suffering. Real household income has been stagnating since 2004/05. Back then it was £660.  The latest available figures are that it had fallen to £659 in 2007. Disposable income in the same period fell from £537 to £534. Of course, those figures were before the current bitter recession.

So what are we going to do about it?  Here we are, the wasted boom years behind us and little but debt to show for it. Tough decisions on taxes and on public services await us if we gain office. How on earth are we going to pay down all that debt so we can just get by, let alone make our society more just and fair?

It doesn’t need to be like this. As President Roosevelt said, the only thing we have to fear is fear itself. We know that ourselves, because 1979 was only 30 years ago. So I actually feel very optimistic. Together we can face the challenges of this recession, work together and come out even stronger. Our nation is at its best when our backs are against the wall, a nation of make do and can do in tough times.

We know the best cure for deprivation is a job. We see that the best way to create jobs is to rebuild the enterprise economy so shattered by the current Government. We can and will repair our nation’s finances and get ourselves back to the head of the global river.  That will help the least well off.  So too will focusing our efforts on lifting the poorest of our children out of poverty and measures like increasing the tax threshold so that the poorest are taken out of income tax altogether.

A job, lowest taxes for the lowest paid and compassion for the most desperate of children will not only help make our country fairer – these things go to the heart of the mission that a Conservative Government must be. Because we know that a house divided against itself cannot stand.


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