Child poverty is set to soar under the coalition

Cameron promised that there would be no "increase in child poverty". But the IFS says it will soar.

David Cameron has previously insisted that the government's austerity programme will not result "in any increase in child poverty". But today's IFS report suggests that entirely the reverse is true: the coalition's policies will lead to a dramatic rise in absolute poverty and relative poverty.

The number of children in absolute poverty in 2015 is forecast to rise by 500,000 to 3 million, while the number in relative poverty (defined as households with less than 60 per cent of the median income) is estimated to rise by 400,000. The planned introduction of IDS's Universal Credit will reduce the number in relative poverty by about 450,000 children and 600,000 working-age adults in 2020-21. However, other changes such as indexing benefits in line with the lower Consumer Prices Index (CPI), rather than the higher Retail Prices Index (RPI) (see James Plunkett's Staggers blog on the coalition's £11bn stealth cut), will more than offset the impact on poverty of the Universal Credit.

It's a finding that should set alarm bells ringing in Downing Street. Cameron and George Osborne have chosen, against the judgement of some in their party, to claim that their austerity package is a "progressive" one. Should poverty increase on their watch (as it is now certain to), they will stand accused not only of being unfair but of being insincere. It was Cameron, after all, who made the Rawls-esque pledge that "the right test for our policies is how they help the most disadvantaged in society" and not the wealthy. A year later he promised: "We can make British poverty history, and we will make British poverty history."

There are plenty on the right who have urged the coalition to shift the goalposts and reject the internationally recognised definition of poverty (Imran Hussain, head of policy at the Child Poverty Action Group, defended this definition on The Staggers last year). For instance, Neil O'Brien, the director of Policy Exchange, has argued: "The problem with what the IFS is saying is that the measure they use isn't an indicator of real poverty; it's a measure of inequality.

"It defines 'poverty' as being below 60 percent of the average income. This is a hangover from the Gordon Brown era. Real poverty isn't the same as inequality. The IFS's definition would mean that there are actually more people in poverty in Britain today than there are in Poland."

But the government, to its credit, has so far refused to abandon the relative measure of child poverty. When Cameron claimed that the Spending Review would not increase child poverty, he used the same definition as Gordon Brown. He may soon wish he hadn't.

George Eaton is political editor of the New Statesman.

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Brexit is teaching the UK that it needs immigrants

Finally forced to confront the economic consequences of low migration, ministers are abandoning the easy rhetoric of the past.

Why did the UK vote to leave the EU? For conservatives, Brexit was about regaining parliamentary sovereignty. For socialists it was about escaping the single market. For still more it was a chance to punish David Cameron and George Osborne. But supreme among the causes was the desire to reduce immigration.

For years, as the government repeatedly missed its target to limit net migration to "tens of thousands", the EU provided a convenient scapegoat. The free movement of people allegedly made this ambition unachievable (even as non-European migration oustripped that from the continent). When Cameron, the author of the target, was later forced to argue that the price of leaving the EU was nevertheless too great, voters were unsurprisingly unconvinced.

But though the Leave campaign vowed to gain "control" of immigration, it was careful never to set a formal target. As many of its senior figures knew, reducing net migration to "tens of thousands" a year would come at an economic price (immigrants make a net fiscal contribution of £7bn a year). An OBR study found that with zero net migration, public sector debt would rise to 145 per cent of GDP by 2062-63, while with high net migration it would fall to 73 per cent. For the UK, with its poor productivity and sub-par infrastructure, immigration has long been an economic boon. 

When Theresa May became Prime Minister, some cabinet members hoped that she would abolish the net migration target in a "Nixon goes to China" moment. But rather than retreating, the former Home Secretary doubled down. She regards the target as essential on both political and policy grounds (and has rejected pleas to exempt foreign students). But though the same goal endures, Brexit is forcing ministers to reveal a rarely spoken truth: Britain needs immigrants.

Those who boasted during the referendum of their desire to reduce the number of newcomers have been forced to qualify their remarks. On last night's Question Time, Brexit secretary David Davis conceded that immigration woud not invariably fall following Brexit. "I cannot imagine that the policy will be anything other than that which is in the national interest, which means that from time to time we’ll need more, from time to time we’ll need less migrants."

Though Davis insisted that the government would eventually meet its "tens of thousands" target (while sounding rather unconvinced), he added: "The simple truth is that we have to manage this problem. You’ve got industry dependent on migrants. You’ve got social welfare, the national health service. You have to make sure they continue to work."

As my colleague Julia Rampen has charted, Davis's colleagues have inserted similar caveats. Andrea Leadsom, the Environment Secretary, who warned during the referendum that EU immigration could “overwhelm” Britain, has told farmers that she recognises “how important seasonal labour from the EU is to the everyday running of your businesses”. Others, such as the Health Secretary, Jeremy Hunt, the Business Secretary, Greg Clark, and the Communities Secretary, Sajid Javid, have issued similar guarantees to employers. Brexit is fuelling immigration nimbyism: “Fewer migrants, please, but not in my sector.”

The UK’s vote to leave the EU – and May’s decision to pursue a "hard Brexit" – has deprived the government of a convenient alibi for high immigration. Finally forced to confront the economic consequences of low migration, ministers are abandoning the easy rhetoric of the past. Brexit may have been caused by the supposed costs of immigration but it is becoming an education in its benefits.

George Eaton is political editor of the New Statesman.