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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The Brexit Beartraps, #2: Could dropping out of the open skies agreement cancel your holiday?

Flying to Europe is about to get a lot more difficult.

So what is it this time, eh? Brexit is going to wipe out every banana planet on the entire planet? Brexit will get the Last Night of the Proms cancelled? Brexit will bring about World War Three?

To be honest, I think we’re pretty well covered already on that last score, but no, this week it’s nothing so terrifying. It’s just that Brexit might get your holiday cancelled.

What are you blithering about now?

Well, only if you want to holiday in Europe, I suppose. If you’re going to Blackpool you’ll be fine. Or Pakistan, according to some people...

You’re making this up.

I’m honestly not, though we can’t entirely rule out the possibility somebody is. Last month Michael O’Leary, the Ryanair boss who attracts headlines the way certain other things attract flies, warned that, “There is a real prospect... that there are going to be no flights between the UK and Europe for a period of weeks, months beyond March 2019... We will be cancelling people’s holidays for summer of 2019.”

He’s just trying to block Brexit, the bloody saboteur.

Well, yes, he’s been quite explicit about that, and says we should just ignore the referendum result. Honestly, he’s so Remainiac he makes me look like Dan Hannan.

But he’s not wrong that there are issues: please fasten your seatbelt, and brace yourself for some turbulence.

Not so long ago, aviation was a very national sort of a business: many of the big airports were owned by nation states, and the airline industry was dominated by the state-backed national flag carriers (British Airways, Air France and so on). Since governments set airline regulations too, that meant those airlines were given all sorts of competitive advantages in their own country, and pretty much everyone faced barriers to entry in others. 

The EU changed all that. Since 1994, the European Single Aviation Market (ESAM) has allowed free movement of people and cargo; established common rules over safety, security, the environment and so on; and ensured fair competition between European airlines. It also means that an AOC – an Air Operator Certificate, the bit of paper an airline needs to fly – from any European country would be enough to operate in all of them. 

Do we really need all these acronyms?

No, alas, we need more of them. There’s also ECAA, the European Common Aviation Area – that’s the area ESAM covers; basically, ESAM is the aviation bit of the single market, and ECAA the aviation bit of the European Economic Area, or EEA. Then there’s ESAA, the European Aviation Safety Agency, which regulates, well, you can probably guess what it regulates to be honest.

All this may sound a bit dry-

It is.

-it is a bit dry, yes. But it’s also the thing that made it much easier to travel around Europe. It made the European aviation industry much more competitive, which is where the whole cheap flights thing came from.

In a speech last December, Andrew Haines, the boss of Britain’s Civil Aviation Authority said that, since 2000, the number of destinations served from UK airports has doubled; since 1993, fares have dropped by a third. Which is brilliant.

Brexit, though, means we’re probably going to have to pull out of these arrangements.

Stop talking Britain down.

Don’t tell me, tell Brexit secretary David Davis. To monitor and enforce all these international agreements, you need an international court system. That’s the European Court of Justice, which ministers have repeatedly made clear that we’re leaving.

So: last March, when Davis was asked by a select committee whether the open skies system would persist, he replied: “One would presume that would not apply to us” – although he promised he’d fight for a successor, which is very reassuring. 

We can always holiday elsewhere. 

Perhaps you can – O’Leary also claimed (I’m still not making this up) that a senior Brexit minister had told him that lost European airline traffic could be made up for through a bilateral agreement with Pakistan. Which seems a bit optimistic to me, but what do I know.

Intercontinental flights are still likely to be more difficult, though. Since 2007, flights between Europe and the US have operated under a separate open skies agreement, and leaving the EU means we’re we’re about to fall out of that, too.  

Surely we’ll just revert to whatever rules there were before.

Apparently not. Airlines for America – a trade body for... well, you can probably guess that, too – has pointed out that, if we do, there are no historic rules to fall back on: there’s no aviation equivalent of the WTO.

The claim that flights are going to just stop is definitely a worst case scenario: in practice, we can probably negotiate a bunch of new agreements. But we’re already negotiating a lot of other things, and we’re on a deadline, so we’re tight for time.

In fact, we’re really tight for time. Airlines for America has also argued that – because so many tickets are sold a year or more in advance – airlines really need a new deal in place by March 2018, if they’re to have faith they can keep flying. So it’s asking for aviation to be prioritised in negotiations.

The only problem is, we can’t negotiate anything else until the EU decides we’ve made enough progress on the divorce bill and the rights of EU nationals. And the clock’s ticking.

This is just remoaning. Brexit will set us free.

A little bit, maybe. CAA’s Haines has also said he believes “talk of significant retrenchment is very much over-stated, and Brexit offers potential opportunities in other areas”. Falling out of Europe means falling out of European ownership rules, so itcould bring foreign capital into the UK aviation industry (assuming anyone still wants to invest, of course). It would also mean more flexibility on “slot rules”, by which airports have to hand out landing times, and which are I gather a source of some contention at the moment.

But Haines also pointed out that the UK has been one of the most influential contributors to European aviation regulations: leaving the European system will mean we lose that influence. And let’s not forget that it was European law that gave passengers the right to redress when things go wrong: if you’ve ever had a refund after long delays, you’ve got the EU to thank.

So: the planes may not stop flying. But the UK will have less influence over the future of aviation; passengers might have fewer consumer rights; and while it’s not clear that Brexit will mean vastly fewer flights, it’s hard to see how it will mean more, so between that and the slide in sterling, prices are likely to rise, too.

It’s not that Brexit is inevitably going to mean disaster. It’s just that it’ll take a lot of effort for very little obvious reward. Which is becoming something of a theme.

Still, we’ll be free of those bureaucrats at the ECJ, won’t be?

This’ll be a great comfort when we’re all holidaying in Grimsby.

Jonn Elledge edits the New Statesman's sister site CityMetric, and writes for the NS about subjects including politics, history and Brexit. You can find him on Twitter or Facebook.