Why poverty really is relative

Frank Field is wrong to claim that we need to change our definition of poverty.

The Labour MP Frank Field, who is leading a government-commissioned independent review of poverty, has said that he will examine how poverty is measured. This matters because measuring child poverty is crucial to understanding and tackling it.

There are a few myths that need dispelling about the targets in the Child Poverty Act:

1. The government target is a relative poverty target that takes no account of other factors. Wrong. The Child Poverty Act contains four targets: relative low income, absolute low income, persistent low income and material deprivation. This basket of measures picks up a range of factors crucial to ensuring that children's lives and well-being are improved.

2. The relative low income target is mathematically impossible to meet. Wrong. Unfortunately, in an article for the Telegraph, Frank Field, the former head of the Child Poverty Action Group, confused the mean and the median. Relative low income is set at 60 per cent of median income. Yes, this creates a moving target when incomes rise (and sometimes fall). But it is still mathematically possible for every household to be moved from below 60 per cent of the median to above without the median moving: if every household below 60 per cent moved to the range between 60 per cent and 100 per cent, then the median would not move at all. It is only when incomes increase above 100 per cent that the median shifts.

3. No developed world country has achieved the relative low income target. Wrong. Finland, Denmark and Sweden are all, or have recently been, in a situation of less than 10 per cent of households with children below the 60 per cent median income -- the standard set by the Child Poverty Act for 2020.

4. The 60 per cent median income line is arbitrary. Wrong. This is the accepted international measure used in the OECD and the EU. In fact, the previous government gave long consideration to where to set the line, including consulting with expert organisations. The 60 per cent line was chosen because, for incomes at this level, a clear correlation with material deprivation has emerged. As there are already clear signs of correlation with material deprivation at 70 per cent of median income, it could be argued that a more ambitious anti-poverty strategy would have defined poverty at income below 70 per cent of median earnings.

5. Relative poverty is not poverty. Wrong. No child should be left behind. A paper last year from the right-wing think tank Policy Exchange, by Peter Saunders, argued that the dictionary definition of "poverty" does not include relative poverty. The paper even quoted the Oxford English Dictionary to try to prove that poverty really means destitution only. Curiously, the quotation omitted the line "relative lack of money or material possessions". Go check -- it's there!

6. The relative poverty target can only be met by raising benefits to unaffordable levels. Wrong. Many people on benefits do not have sufficient incomes and raising benefits must be a part of the long-term strategy. However, six out of ten children below the poverty line are in homes where a parent has a job. This is not just about redistribution to benefit claimants; it is about making work pay and ensuring public services help improve the life chances of children.

7. It is poverty of ambition that is the problem. Half wrong. Children who grow up below the poverty line start out with ambitions very similar to wealthy children. It is only when they get older that their ambitions are scaled back. Certainly their ambition needs to be nurtured, but it is hard when the real problem is lack of opportunity because of socio-economic disadvantage. These kids need more than a pep talk, they need equal opportunity.

Returning to dodgy definitions of poverty, the idea that relative poverty is not "real" poverty is often made by a vocal minority. But arguing over the correct definition of a word is beside the point. It is well understood by anti-poverty campaigners that the public more readily associates "poverty" with the horrific images on TV of destitution in the developing world. What matters most is another "p" word: problem.

Does the public see high levels of economic inequality in the UK as a problem? Yes. Is the public concerned at the high social and economic costs resulting from high levels of economic inequality? Yes. Does the public believe that politicians should do something about the fact that the poorest UK children are likely to live ten years less than the wealthiest? Are twice as likely to die in infancy? Twice as likely to acquire a disability during life? Much more likely to leave school with low skills and qualifications? Yes, yes, yes and yes!

Many members of the public may associate "poverty" with the situation of destitute children in the developing world rather than with the UK. But that doesn't mean they've stopped believing in tackling problems resulting from social and economic inequalities in our own country. The public cares. People don't want to live in a rat-race society of grotesque inequality. They want a fair resolution to inequality that produces a better quality of life for all.

The confused objections to the current measures and targets are at best worrying. At worst, by diluting how we measure child poverty and thereby making the government less accountable for tackling it, these calls are dangerous and could have a real impact on the childhood and the life chances of youngsters living in poverty.

That really would be thinking the unthinkable.

Imran Hussain is head of policy at the Child Poverty Action Group.

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What's to be done about racial inequality?

David Cameron's words on equal opportunities are to be welcomed - now for some action, says Sunder Katwala.

David Cameron made the strongest, clearest and most high profile statement about ethnic inequalities and the need to tackle discrimination ever yet offered by a British Prime Minister in his leader’s speech to the Conservative Party conference in Manchester.
“Picture this. You’ve graduated with a good degree. You send out your CV far and wide. But you get rejection after rejection. What’s wrong? It’s not the qualifications or the previous experience. It’s just two words at the top: first name, surname. Do you know that in our country today: even if they have exactly the same qualifications, people with white-sounding names are nearly twice as likely to get call backs for jobs than people with ethnic-sounding names? … That, in 21st century Britain, is disgraceful. We can talk all we want about opportunity, but it’s meaningless unless people are really judged equally”, said Cameron.
While the proof of the pudding will be in the eating, this was a powerfully argued Prime Ministerial intervention – and a particularly well-timed one, for three reasons.

Firstly, the Prime Minister was able to root his case in an all-but-universally accepted appeal for equal opportunities. It will always prove more difficult in practice to put political energy and resources behind efforts to remedy discrimination against a minority of the population unless a convincing fairness case is made that values cherished across our whole society are at stake. Cameron’s argument, that any party which tells itself that it is the party of the ‘fair chance’ and ‘the equal shot’ must have a response when there is such clear evidence of discrimination, should prove persuasive to a Conservative Party that has not seen race inequalities as its natural territory. Cameron argued that the same principles should animate responses to discrimination when it comes to race, gender and social class. Put like that, wanting job interviews to be fair – by eradicating conscious and unconscious patterns of bias wherever possible – would strike most Britons as offering as clear a case of the values of fair play as wanting the best baker to win the Great British Bake-Off on television.
Secondly, Cameron’s intervention comes at a potential "tipping point" moment for fair opportunities across ethnic groups. Traditionally, ethnic discrimination has been discussed primarily through the lens of its impact on the most marginalised. Certainly, persistent gaps in the criminal justice system, mental health provision and unemployment rates remain stark for some minority groups. What has been less noticed is the emergence of a much more complex pattern of opportunity and disadvantage – not least as a consequence of significant ethnic minority progress.

Most strikingly of all, in educational outcomes, historic attainment gaps between ethnic minorities and their white British peers have disappeared over the last decade. In the aggregate, ethnic minorities get better GCSE results on average. Ethnic minority Britons are more likely, not less likely, to be university graduates than their fellow citizens. 

As a result of that progress, Cameron’s intervention comes at a moment of significant potential – but significant risk too. Britain’s ethnic minorities are the youngest and fastest-growing sections of British society. If that educational progress translates into economic success, it will make a significant contribution to the "Great British Take-Off" that the Prime Minister envisions. But if that does not happen, with educational convergence combined with current ‘ethnic penalties’ in employment and income persisting, then that potential could well curdle into frustration that the British promise of equal opportunities is not being kept.  Cameron also mirrored his own language in committing himself to both a ‘fight against extremism’ and a ‘fight against discrimination’: while those are distinct challenges and causes, actively pursuing both tracks simultaneously has the potential, at least, depolarise some debates about responses to extremism  - and so to help deepen the broad social coalitions we need for a more cohesive society too.

Thirdly, Cameron’s challenge could mark an important deepening in the political competition between the major parties on race issues. Many have been struck by the increase in political attention on the centre-right to race issues over the last five to ten years. The focus has been on the politics of representation. By increasing the number of non-white Conservative MPs from two to seventeen since 2005, Cameron has sent a powerful signal that Labour’s traditional claim to be ‘the party of ethnic minorities’ would now be contested. Cameron was again able to celebrate in Manchester several ways in which his Cabinet and Parliamentary benches demonstrate many successful journeys of migrant and minority integration in British society. That might perhaps help to ease the fears, about integration being impossible in an era of higher immigration, which the Home Secretary had articulated the previous day.

So symbolism can matter. But facial diversity is not enough. The politics of ethnic minority opportunity needs to be about more than visits to gurdwaras, diversity nights at the party conference fringes and unveiling statues of Mahatma Gandhi in Parliament Square. Jeremy Corbyn’s first speech as Labour leader did include one brief celebratory reference to Britain’s ethnic diversity – “as I travelled the country during the leadership campaign it was wonderful to see the diversity of all the people in our country” – and to Labour bringing in more black, Asian and ethnic minority members - but it did not include any substantial content on discrimination. Tim Farron acknowledged during his leadership campaign that the Liberal Democrats have struggled to get to the starting-line on race and diversity at all. The opposition parties too will no doubt now be challenged to match not just the Prime Minister’s rhetorical commitment to challenging inequalities but also to propose how it could be done in practice.

Non-white Britons expect substance, not just symbolism from all of the parties on race inequalites.  Survation’s large survey of ethnic minority voters for British Future showed the Conservatives winning more ethnic minority support than ever before – but just 29 per cent of non-white respondents were confident that the Conservatives are committed to treating people of every ethnic background equally, while 54 per cent said this of Labour. Respondents were twice as likely to say that the Conservatives needto do more to reach out – and the Prime Minister would seem to be committed to showing that he has got that message.  Moreover, there is evidence that ethnic inclusion could be important in broadening a party’s appeal to other younger, urban and more liberal white voters too – which is why it made sense for this issue to form part of a broader attempt by David Cameron to colonise the broad centre of British politics in his Manchester speech.

But the case for caution is that there has been limited policy attention to ethnic inequalities under the last two governments. Restaurateur Iqbal Wahhab decided to give up his role chairing an ethnic minority taskforce for successive governments, unconvinced there was a political commitment to do much more than convene a talking shop. Lib Dem equalities minister Lynne Featherstone did push the CV discrimination issue – but many Conservatives were sceptical. Cameron’s new commitment may face similar challenges from those whose instinct is to worry that more attention to discrimination or bias in the jobs market will mean more red tape for business.

Labour had a separate race inequalities manifesto in 2015, outside of its main election manifesto, while the Conservative manifesto did not contain significant commitments to racial inequality. The mid-campaign launch in Croydon of a series of race equality pledges showed an increasing awareness of the growing importance of ethnic minority votes - though the fact that they all involved aiming for increases of 20 per cent by 2020 gave them a slightly back-of-the-envelope feel. 

Prime Ministerial commitments have an important agenda-setting function. A generation ago the Stephen Lawrence case opened the eyes of middle England to racist violence and police failures, particularly through the Daily Mail’s persistent challenging of those injustices. A Conservative Prime Minister’s words could similarly make a big difference in the mainstreaming of the issue of inequalities of opportunity. What action should follow words? Between now and next year’s party conference season, that must will now be the test for this Conservative government – and for their political opponents too. 

Sunder Katwala is director of British Future and former general secretary of the Fabian Society.