According to the Joseph Rowntree Foundation’s annual report [PDF] on poverty and social exclusion:
the strategy against poverty and social exclusion pursued since the late 1990s is now largely exhausted. … ‘Doing nothing new’ no longer means, as it did a few years ago, slow but steady progress. Instead, it essentially now means that nothing changes.
Child poverty rates have been more or less stagnating since about 2003; the latest figures are for 2005/06, which recorded a fall of 600,000 children living below the official poverty line (60% median earnings after housing costs) since the 1998/99 baseline.
Tax credits, though, continue to have a substantial effect:
tax credits have been lifting a million children a year out of poverty since 2003/04. The comparable figure for the early years of the decade was around 0.6 million a year. In the late 1990s, the predecessor benefit Family Credit lifted about 0.3 million a year above the poverty line.
This figure of a million fewer in poverty is larger than the 600,000 I mentioned because the latter is a simple comparison of numbers across years, while the former is comparing against a calculation of what things would be like now without tax credits.
The trouble is that other economic factors are pushing more families into a position of pre-redistribution poverty:
At the same time, however, the number of children in working families who either are, or would be, in poverty but for tax credits, has risen steadily… In short, as the number of children helped by tax credits to escape poverty has increased, so too has the number needing tax credits in order to do that.
Another new report, from the Commons Treasury Select Committee, suggests that there is some recent progress that hasn’t yet showed up in the figures:
The Government's proposals in the 2007 Budget… are expected to mean that child poverty will be 200,000 lower than it would have been had no changes to tax credits or benefits been announced in that Budget.
The committee adds that the Chancellor expects further measures, announced in the pre-budget report this autumn but obscured by the inheritance tax idiocy, to lift 100,000 more children out of poverty (I’ve not seen an independent audit of this claim).
Barring a surge in employment (particularly among lone parents) or a big rise in benefits, the target of halving child poverty by 2010/11 would seem beyond reach.
True, this deadline and the 60% poverty line itself are arbitrary, but stalling progress is stalling progress. It can be argued, though, that focusing on such a threshold may lead to perverse results, with a focus on those just below it rather than those in the direst poverty.
In light of this possibility, the committee recommends that the Government should prioritise “measures concerned in particular with the very poorest households”, and I think they’re right.
Looking more broadly at the income distribution, the JRF notes (figure 6A) that, from 1996/97 to 2005/06, the richest 10% of people have done well in terms of income rises. The second- and third-poorest deciles have also done well, with those in the top half (barring the top tenth) doing progressively less well. An equivalent graph for 1979-97 would show a very straightforward ‘the more you start with, the richer you get’; there is very substantial redistribution going on.
However, the bottom 10% have had, by a good distance, the smallest income rises over the decade. These people are where attention is most desperately needed.
For me – and I glumly know I’m in a minority on this – child poverty is the single most important political issue there is. I’m proud of what Labour has achieved here, and I’m frustrated by what it hasn’t yet achieved. I don’t want to end up growing less and less proud, and more and more frustrated.