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6 September 2016

Want to beat poverty? Then look at it differently

Rather than focusing on resources, look at how these compare to essential needs. 

By Chris Goulden

Much has changed since the early noughties, when Tony Blair’s pledge to end child poverty in a generation was beginning to be put into practice. Much has also been written about the pros and cons of that approach (a National Minimum Wage, child and working tax credits, investment in education and children’s centres) as well as, of course, about the notorious targets embodied in a Child Poverty Act that has now effectively bitten the dust.

Criticism of the New Labour approach to child poverty has been overdone in some areas, while being fair in others. There never was a strategy of settling for “poverty plus a pound” as characterised infamously by Nick Clegg, among others, and there was always more to it than fiscal transfers – as their policies and progress on the labour market and education prove. However, the economic growth that underpinned early reductions in relative and absolute child poverty was taken for granted. And there were warning signs (such as a slowing in the rate of decline in absolute poverty) showing some years before the recession finally hit in 2008. In the end, their incremental approach wasn’t enough.

When the coalition came to power in 2010, it finally gave Iain Duncan Smith the opportunity to implement his vision of social justice from the Department for Work and Pensions. Meanwhile, the Liberal Democrats (confusingly) tried to kick off their social mobility strategy in parallel from the Cabinet Office. David Cameron, backed by proponents such as the Labour MP Frank Field, then offered instead a distilled vision looking more narrowly at life chances. Now we must wait and see exactly what formulation Theresa May is going to put forward.

These competing plans can only get us so far. They all contain some merit in terms of their framing of the problem and insights into how to achieve lower child poverty, greater social justice, higher social mobility or improved life chances. What none of them do is provide a vision for solving poverty from cradle to the grave in all its forms – from destitution to in-work poverty – for all ages across the UK. That is the ambition that the Joseph Rowntree Foundation has for its new long-term deal to solve poverty, launched today.

This sets out a five-point plan that would:

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  1. Boost incomes and reduce costs – for instance by building 80,000 genuinely affordable homes to rent and buy in England each year.
  2. Deliver an effective benefits system – reversing the cuts to the work allowance under Universal Credit and setting it at a level that provides a decent safety net.
  3. Improve education standards and raise skills – closing the attainment gap and giving five million adults who lack basic reading, writing and numeracy skills the training they need.
  4. Strengthen families and communities – building a family hub in every area so parents and families can access parenting support.
  5. Promote long-term and inclusive economic growth – by giving mayors the powers, incentives and budgets to generate growth that reaches everyone in their boroughs.

The strategy is rooted in a definition, which in turn is designed to broker agreement across the political spectrum. This is simply that poverty is when your resources are well below your minimum needs. Putting needs at the heart of the strategy, and the costs of meeting them, opens up a broad front of action on the markets that exist for essential goods and services. This needs to become a routine part of all approaches to poverty, yet has been neglected in the past.

Not only are high costs – for housing and childcare in particular – a poverty problem, but so is the “poverty premium” where people on low incomes pay more for the same goods and services. Ending this should be a priority requiring governments, regulators and companies to work together. Regulators need to be given the necessary powers, making this an explicit aim of their remit, identifying people in need of help earlier on. Businesses need to offer fairer tariffs and deals and, with charities and social enterprises, shake-up the market by developing new products and services. This would be emblematic of May’s ambition to reform capitalism.

Although addressing the cost of living is vital, so are the more traditional areas of social security, the labour market, education, skills and inclusive growth. Our strategy marks a step forward from previous approaches to poverty by taking a comprehensive look at all the areas that matter, not just those that appeal to the left or the right of the political spectrum.

It aims to give a child starting school this week, the first generation of Brexit children, a chance to grow up in a more prosperous and poverty-free UK by 2030, where no-one is destitute, fewer than one in 10 live in poverty at any one time and no one lives in poverty for more than two years. Getting there requires a broad approach beyond simply left versus right.

Chris Goulden is deputy director of policy and research at the independent Joseph Rowntree Foundation (JRF).