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What
is poverty?
The 1999 Government report Opportunity
for All [footnote 1]
contained a range of indicators of poverty. Whilst a multi-dimensional
approach to tackling poverty is necessary, CPAG believes it is crucial
that the Government recognises the importance of an adequate income.
A 'minimum income standard' could be set at what the Government
considered to be a 'minimum level of decent living without major
deprivations or exclusions and the income level, which gives access
to it.' [footnote 2]
The statistical
measure of poverty most commonly used by the Government is the 'half
of average incomes after housing costs' (Households Below Average
Income) measure. While HBAI is a useful measure of inequality, it
is not a measure of income adequacy.
The
number of people living in poverty
1
in 4 (14 million) people in the UK were living in poverty (defined
as below 50 per cent of average income after housing costs) in 1997/98
compared with 1 in 10 in 1979.
1 in 3 (4.4 million) children were living in poverty in 1997/98
compared with 1 in 10 in 1979.
Different
family types face different risks of failing into poverty:
63 per cent of lone parent families live in poverty.
Couples with children account for the largest number of people in
poverty (4.7 million).
36 per cent of children live in a family without a full-time worker.[footnote
3]
The
effects of poverty
Children whose fathers are unskilled have death rates double that
of their counterparts in professional classes. The differential
is particularly pronounced for death rates from injury and poisoning.
This has increased from a threefold difference of classes IV/V over
classes I/II to a five-fold difference. Children from social class
V are four times as likely to die in accidents as those from social
class I.[footnote 4] Children
living in social housing are more likely to consult their GP, particularly
for a serious condition, than those living in owner-occupied housing
[footnote 5].
Children
who grow up in poverty have poorer attendance records at school
and are less likely to continue into further education. They are
more likely to have poor standards of literacy and numeracy.[footnote
6] These differences are apparent from age 22 months.
Children whose parents are in social class I/II are on average 14
points higher up the educational distribution than those from social
class IV/V.[footnote 7]
They are also more likely to have lower hourly wages, low employment
rates, experience of prison and lone parenthood [footnote
8].
Social
security benefits/tax credits
There are currently around 2.4 million children living in families
on income support. In January 1998, income support fell £39 a week
short of a 'low cost but acceptable' budget [footnote
9] for a family with two children under 11. Following
increases in successive Budgets, it now falls £20 a week short.
More needs to be done to provide families on income support with
an acceptable level of income.
1.5 million families are expected to be claiming tax credits by
2001. On average, these families will be £24 a week better off than
on family credit. However, working families' tax credit does not
lift all working families out of poverty. For example, a couple
with two children under 11 will not have sufficient income to meet
the 'low cost but acceptable' budget set by the Family Budget Unit
if they earn less than around £129 gross per week (the average for
claimants of the former family credit).
The
impact of Labour Budgets on families with children
Budgets since 1997 have introduced the working families' tax credit,
increases in child benefit and increases in the allowances for children
in means-tested benefits. As a result, the great majority of households
with children in the bottom half of the income distribution have
gained by more than £10 a week. However, a considerable proportion
of children in the poorest income groups (15.1 per cent) are worse
off than they would be under policy existing prior to the 1997 election.
Many of the low-income losers are lone-parent families.[footnote
10]
How
much will have been achieved by the end of this Parliament?
Analysis of Government
measures to tackle poverty by Professor David Piachaud found that
measures announced in Budgets since May 1997 will reduce the number
of children in poverty by 800,000 by the end of this Parliament
(2002). (This coincides with Treasury estimates).
The number of people in poverty will be
reduced by 2 million to 12 million over the same period.[footnote
11]
What
more needs to be done for the Government to reach its target of
ending child poverty in 20 years?
Professor Piachaud concludes that 'this represents a most significant
step on the Prime Minister's 20-year mission to end child poverty.
Yet to achieve the goal would require acceleration in the future.
If the current rate of progress were maintained – a very big 'if'
– only two-thirds of child poverty would be abolished in 20 years,
and its extent would be no lower than it was 20 years ago in 1979.'
He argues 'most of those who remain in poverty will be those who
cannot work. If they are to keep up, let alone catch up with the
rest of society then redistribution…will have to increase'.
CPAG looks forward
to seeing further progress in the March 2000 Budget.
Footnotes
1. Opportunity for all, tackling poverty &
social exclusion, 1999 London: Stationery Office [back
to text]
2. Setting a governmental minimum income standard:
the next steps, J. Veit Wilson Poverty 105 2000 London: CPAG
[back to text]
3. Households below average income 1994/5-1997/8,
1999 London: CDS [back to text]
4. Growing Up in Britain 1999 London:
BMA [back to text]
5. Mother, fetus, infant and child & family:
socio-economic inequalities, C.Law in Inequalities in Health,
the evidence 1999 Bristol: Policy Press [back
to text]
6. Child development and success or failure
in the youth labour market, P.Gregg & S.Machin 1998 London:CESP
discussion paper 387 [back to
text]
7. Pre school educational inequality?,
L.Feinstein 1998 London:CESP discussion paper 404 [back
to text]
8.Child Development & Family Income,
P.Gregg, S.Harkness & S.Machin 1999 York:Joesph Rowntree Foundation
[back to text]
9.The 'Low Cost But Acceptable' budget was drawn
up by the Family Budget Unit at King's College London and is defined
as the threshold below which good health, social integration and
satisfactory standards of child development are at risk.[back
to text]
10. Budgeting for fairness? The distributional
effects of three Labour Budgets, 1999 Microsimulation Unit,
University of Cambridge [back
to text]
11. Progress on Poverty, D.Piachaud
New Economy Vol 6 issue 3 Oxford:IPPR [back
to text]
February 2000
For more information, please contact Djuna Thurley,
020 7837 979 x 220 or email dthurley@cpag.demon.co.uk
or Tim Marsh 020 7837 979 x 220 or email tmarsh@cpag.demon.co.uk
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