Moving the goal posts won't hide the coalition's failure on child poverty

Iain Duncan Smith's plan to change the way child poverty is measured is a distraction.

The consultation on child poverty measurement announced by Iain Duncan Smith today is generating exasperated groans from those who have been engaged with the subject for decades.

It is not as if we haven’t been here before. The last extensive consultation ended in 2003 but the indicators have continued to be refined since then. The portfolio of measures that eventually became the targets in the Child Poverty Act 2010 were developed through a discussion between government and social scientists over many decades after the publication of Abel Smith and Townsend’s "rediscovery of poverty" book The Poor and the Poorest in 1965.

And the measures we now have are very good, arguably the best of any country in the world.  They encompass understandings of poverty as relative, absolute (actually constant), deprivation, overlaps of income and deprivation, and persistence. They have been adopted by international organisations such as the EU, OECD and UNICEF, and copied by other governments. Of course they are not perfect. It would be good to add an indicator of how deep poverty is (poverty gap). But do we really need a consultation to add new measures?

Without any fuss the government have already added a new severe measure of poverty – less than 50 per cent of the median and materially deprived – following the Frank Field review. The Child Poverty Strategy published in 2011 proposed a sensible list of ten indicators (additional to the five Child Poverty Act indicators) that they would use to monitor progress. Or the government could go further and revert to the list of 24 child indicators that DWP published in the Opportunity for All series between 1999 and 2007 covering poverty, health, education, housing and child protection.

There is no dearth of indicators; what we lack are policies that will continue to drive the figures downwards after a decade when 1.1 million children were lifted out of poverty. Instead, we have a consultation that is seeking to develop a "multidimensional indicator" of child poverty, relegating income – and especially the relative income measure – in the process.

Some people have never liked the relative poverty measure because it is a measure of inequality. Before Iain Duncan Smith, Conservative social security secretary John Moore, attempted to do away with it in the 1980s. Ministers now try to ridicule the relative measure because it showed a fall in child poverty in 2010-11, partly driven by a fall in median income. But that is why we have a portfolio of measures.

It is a national tragedy that after a decade of progress that has seen child poverty and child well-being improving, from a pretty low base, the coalition’s policies have sent it into reverse. Moving, adding or blending the goal posts will not hide this fact.

Jonathan Bradshaw is a Professor of Social Policy at the University of York and a trustee of the Child Poverty Action Group

Work and Pensions Secretary Iain Duncan Smith speaks at last month's Conservative conference in Birmingham. Photograph: Getty Images.
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I was wrong about Help to Buy - but I'm still glad it's gone

As a mortgage journalist in 2013, I was deeply sceptical of the guarantee scheme. 

If you just read the headlines about Help to Buy, you could be under the impression that Theresa May has just axed an important scheme for first-time buyers. If you're on the left, you might conclude that she is on a mission to make life worse for ordinary working people. If you just enjoy blue-on-blue action, it's a swipe at the Chancellor she sacked, George Osborne.

Except it's none of those things. Help to Buy mortgage guarantee scheme is a policy that actually worked pretty well - despite the concerns of financial journalists including me - and has served its purpose.

When Osborne first announced Help to Buy in 2013, it was controversial. Mortgage journalists, such as I was at the time, were still mopping up news from the financial crisis. We were still writing up reports about the toxic loan books that had brought the banks crashing down. The idea of the Government promising to bail out mortgage borrowers seemed the height of recklessness.

But the Government always intended Help to Buy mortgage guarantee to act as a stimulus, not a long-term solution. From the beginning, it had an end date - 31 December 2016. The idea was to encourage big banks to start lending again.

So far, the record of Help to Buy has been pretty good. A first-time buyer in 2013 with a 5 per cent deposit had 56 mortgage products to choose from - not much when you consider some of those products would have been ridiculously expensive or would come with many strings attached. By 2016, according to Moneyfacts, first-time buyers had 271 products to choose from, nearly a five-fold increase

Over the same period, financial regulators have introduced much tougher mortgage affordability rules. First-time buyers can be expected to be interrogated about their income, their little luxuries and how they would cope if interest rates rose (contrary to our expectations in 2013, the Bank of England base rate has actually fallen). 

A criticism that still rings true, however, is that the mortgage guarantee scheme only helps boost demand for properties, while doing nothing about the lack of housing supply. Unlike its sister scheme, the Help to Buy equity loan scheme, there is no incentive for property companies to build more homes. According to FullFact, there were just 112,000 homes being built in England and Wales in 2010. By 2015, that had increased, but only to a mere 149,000.

This lack of supply helps to prop up house prices - one of the factors making it so difficult to get on the housing ladder in the first place. In July, the average house price in England was £233,000. This means a first-time buyer with a 5 per cent deposit of £11,650 would still need to be earning nearly £50,000 to meet most mortgage affordability criteria. In other words, the Help to Buy mortgage guarantee is targeted squarely at the middle class.

The Government plans to maintain the Help to Buy equity loan scheme, which is restricted to new builds, and the Help to Buy ISA, which rewards savers at a time of low interest rates. As for Help to Buy mortgage guarantee, the scheme may be dead, but so long as high street banks are offering 95 per cent mortgages, its effects are still with us.