Child poverty: Labour needs to stand up for its objectives as well as its record

By Declan Gaffney

As the public is softened up for expenditure cuts, we can expect the ConDem criticism of New Labour’s record on poverty to move from results to objectives. Labour will be accused not only of having failed dismally on child poverty by ‘throwing money at the problem’ but of having cast its net too widely by setting a relative poverty objective rather than focussing on ‘the poorest’.

Some within Labour’s own ranks may be tempted to buy into this line of argument. Progress on child poverty stalled in 2005/6 and then went into reverse. This has undoubtedly contributed to the loss of optimism in Labour’s ranks to which Jon Cruddas has drawn attention.

The most vocal advocate of abandoning Labour’s commitment is Frank Field, whose criticisms long pre-date his appointment as coalition ‘Child Poverty Tsar’. Frank has his own robust views on poverty, and even those who disagree with him need to listen to what he has to say on the subject. But his recent attacks on Labour’s child poverty target and the means adopted to advance it show a surprising lack of understanding of what Labour in government was trying to achieve, and what it did achieve. The record is obviously not one of unqualified success; nor is it one of unqualified failure.

Let’s take the target first: poverty is defined as living in a family with income below 60% of the median (the median is the mid-point in the income distribution). Frank says:

“Any candidate sitting GCSE maths should be able to explain that raising everybody above a set percentage of median income is rather like asking a cat to catch its own tail. As families are raised above the target level of income, the median point itself rises. Not surprisingly, therefore, no country in the free world has managed to achieve this objective, not even in those Scandinavian countries whose social models many of us admire.”

Frank of all people should be aware that this is innumerate nonsense, based on a failure to distinguish between median and mean. There is no mathematical reason why anyone should have an income below 60% of the median. It is true that it is virtually impossible to reach zero on any realistic measure, relative or ‘absolute’, not because of the maths but because some element of frictional poverty will always be present, but Labour in government was clear that the objective of eliminating child poverty was to be understood in terms of the toughest international comparisons.

The chart below shows child poverty rates calculated on the more stringent relative threshold of 50% of median income from UNICEF’s 2007 comparison. Four countries had child poverty rates below 4% on this definition. They did not achieve these results by breaching the laws of mathematics. And they certainly belong to ‘the free world’.

Frank also describes Labour’s anti-poverty strategy in an over-simplified manner which ignores precisely what was most innovative about it:

“Over recent decades, the Left and centre-Left’s answer to poverty and inequality has been to spend more money, to redistribute from richer to poorer. Yet this central social democratic ideal is being tested to the point of destruction…..”

This is a caricature of Labour’s approach to child poverty, which was much more consistent with the view that the ‘central social democratic ideal’ is greater equality rather than redistribution per se. Poverty reduction was as much about the indirect effects of tax credits, along with childcare provision and employment services, on access to the labour market – the removal of the ‘unemployment trap’ which characterised earlier models of social security – as the direct effect of transfers on family incomes. This was a different way of thinking about the role of the state in addressing inequality: less in terms of after-the-event corrective redistribution and more in terms of how different types of institutional mechanism and policy could be used to provide a better framework for individual decision-making. As someone who has expressed his admiration of Amartya Sen’s work, one might expect Frank to recognise that this strategy was as much about expanding freedom as with improving welfare.

Finally, let’s look at the mixed record of what happened over Labour’s term in office. Overall, the child poverty rate fell from the peak of 34% registered in both 1996/7 and 1998/9 to a low of 28% in 2004/5, but then rose back to 31% in 2008/9.

The chart below summarises developments from 1994/5 to 2008/9 for children in couple and single parent families. Figures are for incomes after housing costs, using the 60% median threshold.

Two things are obvious. The first is that the record on child poverty reduction differs by family type. While poverty rates remain far worse for children in single parent families, they were much lower in 2008/9 than in 1996/7, down from 67% to 50%, reflecting both increased employment and redistribution. For children in couple families, the improvements were modest and were reversed over the period. Any future approach to child poverty would need to focus much more on couple families – who account for 60% of all children in poverty – as well as building on this qualified but nonetheless substantial progress among single parent families.

The second is that Labour’s achievements on child poverty were concentrated in its first two terms in government. There is little question that the interlocking innovations of tax credits, minimum wage, Sure Start and the New Deal made a major contribution to reducing child poverty between 1999 and 2005, helped by a booming labour market and demographic change. Whether the much more aggressive approach to welfare adopted in Labour’s last term will prove similarly effective remains an open question.

As noted, the record is mixed. Tackling poverty is a long term task, and progress can not be expected to be linear. But would the progress that was made have happened without a relative income child poverty target? And will further progress be made if the architecture of poverty reduction which Labour established in its first two terms comes under attack, as seems all too likely? Labour needs to understand where its child poverty strategy was less effective than it should have been, but it should be unabashed in defending the objective which it set itself and which improved so many lives during its period in office.

Sources: international data: UNICEF INNOCENTI report card 4.2 2007; UK child poverty DWP Households below average income 1994/5-2008/9 Table 4.11.