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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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10 comments

Dave's picture

I'm really fed up with Frank Field. I hope whoever gets elected as Labour leader has the guts to kick him out.

writeoff's picture

Falco - actually there is plenty of evidence to suggest getting rid of everyone earning over 100k would make for a much better society - read 'Spirit Level' et al. Old Git is talking out of the wrong end. Poor parents have poor children because inequality and social mobility have worsened continually due to 30 years of neo-liberal policies. It ain't rocket science, but to here these policy units talk you'd think it was. All these 'investigations' just chuck a tarp over the truth.

jeremiah's picture

Frankie boy is a disgrace. I hate the Tories but at least they are who they claim to be.

The fact he is now working for a Tory Government is galling.

I can imagine that the party members and volunteers of Birkenhead CLP worked their butts off in April for that to happen!

Field has now entered Reg Prentice territory. Field should be expelled from the party due to the fact he is working for the Government!

samysellers23's picture

Falco - you're repeating the mistake referred to in point 2 of the article. Very very few people earn over £100k a year (less than 1%, I think) so "removing" them would make almost no difference to the *median* income and therefore almost no difference to the number of people in relative poverty.
The strength of using median income as the standard is that it means comparing the poorest in our society with the average member of society, and the needs of the poorest are affected by the income of the average, because the structure of the economy is strongly influenced by the demands of the average. The income of the tiny, super-wealthy elite is pretty irrelevant.

Graeme's picture

He certainly is a disgrace, and should be expelled. But he probably won't care. There is no chance he could ever be elected again in Birkenhead. So I assume he is likely to retire after he has done his dirty work.

The Old Man's picture

I feel like being very non-PC.

Isn't child poverty cause by poor parents? And hasn't 60 years of steering money towards those poor parents been a failure? Don't tax credits and other benefits reward the silly act of having children one can't afford to provide for? Wouldn't the nation be financially and socially better if women were rewarded for not giving birth?

Leftist policies on these matters seem based on the assumption that getting pregnant is like catching a cold, that you just can't do anything to prevent it. Actually, you can, and some women do, and they do not have children until they are established in a career and can provide for them without the assistance of a begging bowl. Some people call those women very sensible, some call them mugs.

jeremiah's picture

@oldgit. I don't think the state reward feckless people who have loads of kids. However child benefit should remain as a universal benefit.

The idea that all child poverty is caused by poor parents is a ridculous assertion that would not be out of place at the CPS or the IEA!

Colin's picture

The Old Man is exactly right. There is no good reason for a child to grow up in poverty in modern Britain. The causes of this are almost inevitably parents who are drug or alcohol abusers or those who have inherited the entitlement mentality from their own parents.

Falco's picture

The reason that relative poverty is relatively unimportant is easy to show: You could raise a great many children from relative poverty by just getting rid of anyone earning over 100K a year. It would do nothing to raise their circumstances, society as whole would be impoverished but by your preferred measure these children would be better off.

What they need is relief from absolute poverty combined with decent chances to better themselves.

Spinozin's picture

I appreciate that it is beyond the remit of the CPAG but if we really care about 'fairness' for all then we need to extend this to all children not just the British. World population is set to hit 9 billion by 2030-2040. Should we not be spending our time and resources to tackle this larger issue instead? Glad to see you (Imran) get some prime time exposure on Monday night on BBC News.

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