Yesterday in the House of Commons, Iain Duncan Smith read out the obituary notice for compassionate conservatism. He announced the demise of the Child Poverty Act, which was agreed with all party support in 2009-10. He plans to replace the clear targets set out in the Act with a requirement to publish a jumble of loosely connected statistics – and apparently no targets at all.
In their 2015 manifesto, the Conservatives said they would “work to eliminate child poverty”. Yesterday’s announcement means they have no intention of doing any such thing.
The internationally accepted definition of a household in poverty, used across OECD countries, is a household whose income is less than 60 percent of the current median income for a household of its size. It is sometimes referred to as relative poverty. A household in absolute poverty is one whose income is less than 60 per cent of the median income at a fixed point in time – our current measures use the benchmark of 2010.
In government, Labour lifted more than a million children out of relative poverty, reducing the proportion from 26 per cent in 1998 to 18 per cent in 2010, and more than 2 million out of absolute poverty. The Child Poverty Act includes four measures of poverty: relative, absolute, persistent and material deprivation. The Act set targets to be achieved by 2020, including that relative poverty should be below 10 per cent. New data published last week shows that progress on reducing child poverty has stalled, and that absolute child poverty is going up under the Tories.
Duncan Smith told the Commons that he was arguing against the relative poverty measure over a decade ago. At the same time, David Cameron in his 2006 Scarman was embracing it. He said then: “We need to think of poverty in relative terms – the fact that some people lack those things which others in society take for granted” and committed that “The Conservative Party will measure and act on relative poverty … Poverty is relative and those who pretend otherwise are wrong”.
In a speech last week, the Prime Minister had clearly changed his mind. “Take the historic approach to tackling child poverty”, he said. “Today, because of the way it is measured, we are in the absurd situation where if we increase the state pension, child poverty actually goes up.” That is correct. If you increase the income of better off people, you make others relatively poorer.
The Prime Minister said with conviction last week that focusing on relative poverty is absurd. But in 2006 he set out the diametrically opposite view, with apparently equal conviction, that “the Conservative Party will measure and act on relative poverty”.
In addition to setting clear targets, the Child Poverty Act set up the Child Poverty Commission, with a statutory duty to report annually on progress in reducing child poverty. The Coalition Government changed it to the Social Mobility and Child Poverty Commission. And yesterday, Iain Duncan Smith said “we will reform the Social Mobility and Child Poverty Commission to become the Social Mobility Commission”. The abandonment of effort on child poverty could not be clearer.
The Child Poverty Act requires the preparation and updating of a UK strategy for delivering the child poverty targets, an obligation to which the Coalition paid lip service It also requires local authorities to work with partners “with a view to reducing, and mitigating the effects of, child poverty in the responsible local authority’s area”. Yesterday, Duncan Smith said he would remove all the “other duties and provisions” in the Act.
The announcement means that all the measures forcing governments to act on child poverty are being scrapped. It’s not surprising, ecause, next week, it is widely expected that George Osborne will use his emergency budget to announce drastic cuts in tax credits in order to deliver his £12 billion package of social security cuts, increasing child poverty.
The announcement means that all the measures forcing governments to act on child poverty are being scrapped. Its not surprising, because, next week, it is widely expected that George Osborne will use his emergency budget to announce drastic cuts in tax credits, in order to deliver his £12 billion package of social security cuts, increasing child poverty. One tax credit cut under consideration by Cameron and Osborne would save £5 billion per year, and increase child poverty by 300,000.
Tax credits have been by far the most effective measure ever introduced in Britain to make work pay. The lone parent employment rate has risen in Britain from less than 45 per cent in 1997 to over 60 per cent today –thanks in large part to tax credits.
With only lip service now being paid by Ministers to fighting child poverty, the deck is clear for the next stage of the Tories’ attack on the low paid.
Stephen Timms is Labour’s acting shadow Secretary of State for Work and Pensions