Coalition should "come clean" on child poverty

Even the government doesn't think it can meet its own targets. A new plan is needed.

In his first speech as the government's child poverty adviser, Alan Milburn today told the coalition to "come clean" on the impossibility of meeting the poverty reduction targets enshrined in the 2010 Child Poverty Act. The challenge of reducing child poverty to less than 10 per cent by 2020 has been laid bare by analysis revealing the heavy work done by tax credits in raising family incomes above the poverty line over the last 15 years. Work did not do enough: parental employment rates rose considerably over this period but low wages limited the contribution of paid work to reducing family poverty.

This is now the central challenge for the child poverty agenda: how to reduce poverty when the only tool that been shown to be effective -- more generous cash transfers -- is no longer available on any meaningful scale. The task is made harder by analysis highlighting the contribution that women's paid work has made to rising family incomes over the last few decades. This source of income is likely to diminish as public sector jobs are lost and support for childcare is reduced for some families. As a result, the Institute for Fiscal Studies has stated that it's "almost incredible" that the child poverty targets can be met as they stand.

So Alan Milburn is right to challenge both the coalition and Labour to get real about child poverty. The Chancellor's Autumn Statement, featuring cuts to tax credits that will push 100,000 more children into poverty, implicitly confirmed that the government doesn't think it can meet its own targets either. But officially the coalition remains committed to the 2010 Act, so it needs to say where it will focus its efforts. Milburn makes a strong case for prioritising the under fives, ensuring that no child is born into poverty. If we cannot afford to lift all children out of poverty, concentrating on the youngest gives them the best chance to flourish later in life.

The importance of raising incomes in poor families is obvious, but families also need good quality services to give children the best start. There is no "either/or" deal here. Milburn's call for the coalition to set out a long-term plan to deliver free childcare for all families is right. IPPR research shows that universal childcare could pay for itself over the medium-term once the extra taxes paid by working parents are taken into account, while the extra earnings would help lift many families out of poverty. A mechanism for enabling childcare spend to contribute towards the child poverty targets would drive a duel strategy of investment in incomes and services. In the longer term, labour market reforms that support higher wages for parents would take some of the burden off the benefits system.

The public's ambiguous support for ending child poverty demonstrates the failure of this agenda to resonate with families. Milburn's broader plea to locate the child poverty debate in a wider discussion of economic security is spot on. Few families are continually stuck in deep poverty, but many move in and out of poverty as short-term jobs come to an end or families grow. Free childcare, flexible working opportunities, decent wages and job security matter for most low-to-mid income families, not just the poorest.

Kayte Lawton is a senior research fellow at the IPPR

Kayte Lawton is senior research fellow at IPPR.

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North Yorkshire has approved the UK’s first fracking tests in five years. What does this mean?

Is fracking the answer to the UK's energy future? Or a serious risk to the environment?

Shale gas operation has been approved in North Yorkshire, the first since a ban introduced after two minor earthquakes in 2011 were shown to be caused by fracking in the area. On Tuesday night, after two days of heated debate, North Yorkshire councillors finally granted an application to frack in the North York Moors National Park.

The vote by the Tory-dominated council was passed by seven votes to four, and sets an important precedent for the scores of other applications still awaiting decision across the country. It also gives a much-needed boost to David Cameron’s 2014 promise to “go all out for shale”. But with regional authorities pitted against local communities, and national government in dispute with global NGOs, what is the wider verdict on the industry?

What is fracking?

Fracking, or “hydraulic fracturing”, is the extraction of shale gas from deep underground. A mixture of water, sand and chemicals is pumped into the earth at such high pressure that it literally fractures the rocks and releases the gas trapped inside.

Opponents claim that the side effects include earthquakes, polluted ground water, and noise and traffic pollution. The image the industry would least like you to associate with the process is this clip of a man setting fire to a running tap, from the 2010 US documentary Gasland

Advocates dispute the above criticisms, and instead argue that shale gas extraction will create jobs, help the UK transition to a carbon-neutral world, reduce reliance on imports and boost tax revenues.

So do these claims stands up? Let’s take each in turn...

Will it create jobs? Yes, but mostly in the short-term.

Industry experts imply that job creation in the UK could reflect that seen in the US, while the medium-sized production company Cuadrilla claims that shale gas production would create 1,700 jobs in Lancashire alone.

But claims about employment may be exaggerated. A US study overseen by Penn State University showed that only one in seven of the jobs projected in an industry forecast actually materialised. In the UK, a Friends of the Earth report contends that the majority of jobs to be created by fracking in Lancashire would only be short-term – with under 200 surviving the initial construction burst.

Environmentalists, in contrast, point to evidence that green energy creates more jobs than similar-sized fossil fuel investments.  And it’s not just climate campaigners who don’t buy the employment promise. Trade union members also have their doubts. Ian Gallagher, Secretary of Blackburn and District Trade Unions Council, told Friends of the Earth that: “Investment in the areas identified by the Million Climate Jobs Campaign [...] is a far more certain way of addressing both climate change and economic growth than drilling for shale gas.”

Will it deliver cleaner energy? Not as completely as renewables would.

America’s “shale revolution” has been credited with reversing the country’s reliance on dirty coal and helping them lead the world in carbon-emissions reduction. Thanks to the relatively low carbon dioxide content of natural gas (emitting half the amount of coal to generate the same amount of electricity), fracking helped the US reduce its annual emissions of carbon dioxide by 556 million metric tons between 2007 and 2014. Banning it, advocates argue, would “immediately increase the use of coal”.

Yet a new report from the Royal Society for the Protection of Birds (previously known for its opposition to wind farm applications), has laid out a number of ways that the UK government can meet its target of 80 per cent emissions reduction by 2050 without necessarily introducing fracking and without harming the natural world. Renewable, home-produced, energy, they argue, could in theory cover the UK’s energy needs three times over. They’ve even included some handy maps:


Map of UK land available for renewable technologies. Source: RSPB’s 2050 Energy Vision.

Will it deliver secure energy? Yes, up to a point.

For energy to be “sustainable” it also has to be secure; it has to be available on demand and not threatened by international upheaval. Gas-fired “peaking” plants can be used to even-out input into the electricity grid when the sun doesn’t shine or the wind is not so blowy. The government thus claims that natural gas is an essential part of the UK’s future “energy mix”, which, if produced domestically through fracking, will also free us from reliance on imports tarnished by volatile Russian politics.

But, time is running out. Recent analysis by Carbon Brief suggests that we only have five years left of current CO2 emission levels before we blow the carbon budget and risk breaching the climate’s crucial 1.5°C tipping point. Whichever energy choices we make now need to starting brining down the carbon over-spend immediately.

Will it help stablise the wider economy? Yes, but not forever.

With so many “Yes, buts...” in the above list, you might wonder why the government is still pressing so hard for fracking’s expansion? Part of the answer may lie in their vested interest in supporting the wider industry.

Tax revenues from UK oil and gas generate a large portion of the government’s income. In 2013-14, the revenue from license fees, petroleum revenue tax, corporation tax and the supplementary charge accounted for nearly £5bn of UK exchequer receipts. The Treasury cannot afford to lose these, as evidenced in the last budget when George Osborne further subsidied North Sea oil operations through increased tax breaks.

The more that the Conservatives support the industry, the more they can tax it. In 2012 DECC said it wanted to “guarantee... every last economic drop of oil and gas is produced for the benefit of the UK”. This sentiment was repeated yesterday by energy minister Andrea Leadsom, when she welcomed the North Yorkshire decision and described fracking as a “fantastic opportunity”.

Dependence on finite domestic fuel reserves, however, is not a long-term economic solution. Not least because they will either run out or force us to exceed international emissions treaties: “Pensions already have enough stranded assets as they are,” says Danielle Pafford from 350.org.

Is it worth it? Most European countries have decided it’s not.

There is currently no commercial shale-gas drilling in Europe. Sustained protests against the industry in Romania, combined with poor exploration results, have already caused energy giant Chevron to pull out of the country. Total has also abandonned explorations in Denmark, Poland is being referred to the European Court of Justice for failing to adequately assess fracking’s impact, and, in Germany, brewers have launched special bottle-caps with the slogan “Nein! Zu Fracking” to warn against the threat to their water supply.

Back in the UK, the government's latest survey of public attitudes to fracking found that 44 per cent neither supported nor opposed the practice, but also that opinion is gradually shifting out of favour. If the government doesn't come up with arguments that hold water soon, it seems likely that the UK's fracking future could still be blasted apart.

India Bourke is the New Statesman's editorial assistant.