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.