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Why targets don't help the poor

By Paul Goodman
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"If child poverty really is to be abolished, the Government's anti-poverty programme must reach beyond raising incomes, and address the human dimension of poverty in a holistic way - increasing good parenting, aiding family stability, raising levels of educational attainment and healthcare and thus boosting children's life chances."

Select Committee reports are often shaped by a bargain.  The minority parties on the committee attack the detail of Government policy, and the majority party defends its the aims (though some majority members delight in assailing their own Ministers).  The final report reflects both activities, the independence of the committee is thereby preserved, and honour satisfied all around.  If the Committee is incompetently led or its members particularly obstreperous, this deal may break down and a minority report be issued.  Such an outcome is seen as reflecting badly on the Chairman and appallingly on the committee clerks, who will therefore move heaven and earth to try and avoid it.

I made plenty of mistakes during my ten years in the Commons, and think that trying to number any successes would be futile.  But I took a bloody-minded pleasure at getting the words I quote above inserted into a Work and Pensions Select Committee report on Child Poverty during the 2001-2010 Parliament (though some forms of poverty can never be abolished, of which more later).  This wouldn't have happened without the unstinting support of Andrew Mitchell and Andrew Selous, my fellow commitee Tories, and the eventual acquiesence of the Labour members, who let some of our amendments pass in order to clinch the bargain I describe above.  I remember that Labour's Karen Buck didn't care for "holistic", and I have to confess I don't blame her.

I thought of all this yesterday when reading about an IFS Report claiming that the Government is likely to miss its child poverty targets.  The IFS said: "Even if there were an immense increase in the resources made available, it is hard to see how child poverty could fall by enough to hit this supposedly legally binding target in just nine years."  It also pointed out that targets were toughened in the Child Poverty Act of 2010.  Conservatives disagree on whether relative poverty targets are useful.  Greg Clark believes they are, seeing society as a caravan journey, in which no traveller should be left too far behind.  Fraser Nelson believes they aren't, suggesting that what matters most is whether travellers are moving forward, not what the gaps between them are.

I agree with Clark that society is better viewed as a caravan than as Churchill's image of a ladder, beneath which welfare acts as a safety net.  Such a net may ensure that a disabled man gets incapacity benefit, but it won't help him to find and keep work, as organisations like the Shaw Trust in my old Wycombe constituency used to.  But I strongly agree with Nelson that such attempts to close the gaps as the child poverty target can go tragically awry.  Making poor people richer usually takes time, since it often involves getting them off benefits, keeping them in work, finding affordable childcare, tackling the effects of disability or alcohol or drugs.  Making rich people poorer is a quick business: tax them - and lo, the child poverty target is hit.

In other words, it's much easier to hit the targets by making the rich poorer than making the poor richer, a gambit attempted with such outstanding success by the late Soviet Union (where, as we all know, there were no rich elites, just as there are none in modern-day North Korea and Cuba).  Nelson rages against the cynical politics of targets under Labour: the miniscule increases in incomes for poorer people in some households - which floated them above the poverty line, though their life chances weren't improved - so that richer people in others could ease their consciences and Gordon Brown could get clap lines for his speeches.  David Cameron made a rod for his own back in Government by consenting to see tougher targets introduced in the 2010 Act.

What matters most is absolute poverty.  This is harder to assess than it may seem at first glance - yes, even during the 1980s.  Measured in terms of income, the prosperity of the poorest ten cent under Mrs Thatcher rose before housing costs are taken into account. (The calculation is complicated by trying to calculate the income-boosting effects of the broader ownership of consumer durables and the rising value of benefits in kind).  Measured in terms of expenditure, the prosperity of this group increased after those costs are taken into account, too: some believe that spending is a better measure than income, since some groups, such as students, may have some access to capital but less to income, and those of others, such as the self-employed, fluctuate.

The philosophical arguments rage: whether or not public policy should aim for equality of outcome, and whether this would be either just or possible, or both.  So do the practical ones: whether static snapshots of deciles, which take no account of people moving between groups or of the public services they receive, are decisive - Nick Clegg claimed that they aren't last August, in the aftermath of a controversial IFS study of George Osborne's first budget.  Whatever the debate about the IFS's view, I see no reason to dispute its facts.  It says now that the Government may well miss its absolute as well as relative poverty target, and that "2012–13 is likely to be dominated by a large decline in real incomes across the income distribution".

Team Cameron took the view that voting against the tougher targets in Opposition would be nasty party stuff, and would that think changing them in Government to be even more so.  But Ministers need to drive forward the alternative to dry statistical snapshots - namely, compassionate conservative measures such as as taking poorer workers out of tax, pay protection for the poorest public sector workers, the universal credit, the pupil premium, extra apprenticeships, a new approach to drug rehabilitation, a more generous state pension, an immigration cap to help unemployed people, and better early intervention - as supported by Duncan Smith and the Labour MP Graham Allen. As the imperfect words buried in a dust-gathering Select Commitee report put it:

"If child poverty really is to be abolished, the Government's anti-poverty programme must reach beyond raising incomes, and address the human dimension of poverty in a holistic way - increasing good parenting, aiding family stability, raising levels of educational attainment and healthcare and thus boosting children's life chances."


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