From the TUC

The latest poverty figures

21 May 2010, by in Society & Welfare

Today the Department for Work and Pensions published this latest Households Below Average Income statistics. There’s a new edition every year, and they are an invaluable tool for checking on whether the number of people in poverty has been rising or falling.

It’d be easy to see these figures as the final verdict on Labour’s efforts to fight child poverty. In fact, it’s too early to say – the latest figures are for 2008/9, the figures for poverty in Labour’s closing months will be published next year and the impacts of Labour’s last policies won’t show up until the figures after that.

(Memo to Opposition politicians – these figures won’t be a searing indictment of the new government for another couple of years at least.)

Having said all that, the old government can take some pleasure in the new figures. For a couple of years the HBAI figures haven’t shown much change in the number of children in poverty – last year’s report had to admit that:

“between 2006/07 and 2007/08, the numbers and the proportions [of children in poverty] either stayed the same or rose, depending on the measure. The number and proportion of children who were living in low-income and material deprivation increased over the last year.”

This year’s headline is that, compared with last year’s results, the number of children in poverty is down by 100,000. If we use the before housing costs measure that the government relies on, since 1996/7 600,000 children have been taken out of poverty, one in six. Of course, the government’s own target was that the number of children in poverty should be halved by now, but this still compares very well with the previous government’s record of more than doubling the number of children in poverty.

(Memo to Coalition politicians: it is definitely too early to claim that your policies are turning the corner on poverty.)

The overall message is that, at a time when it was tremendously difficult for governments to resist the growth of inequality the last government held the bridge and achieved real reductions in the number of children in poverty. The Institute for Fiscal Studies got the balance about right when it said:

“tax and benefit measures implemented by Labour since 1997 have increased the incomes of poorer households and reduced those of richer ones, largely halting the rapid rise in income inequality we saw under the Conservatives. Despite this, inequality was still slightly higher in 2007–08 than when Labour came to office …”

Jane Waldfogel has led American anti-poverty academics in pointing to Britain’s war on child poverty as an example for Americans. The HBAI statistics include a measure for ‘absolute’ poverty which approximates the poverty level used in the United States; Prof Waldfogel has pointed out that, on this measure, 1.6 million children were lifted out of poverty in just five years, with the proportion in absolute poverty falling from 26% to 14% – compared to a US reduction of one third over ten years.

It took tremendous political commitment and prioritisation to achieve this. The performance on poverty among working age adults – where there wasn’t the same priority – is something that worries me. Since 96/7, using the government’s definition, the number of working age adults in poverty has gone up one million.

There’s a telling set of figures in the new statistics: the risk of poverty for working age adults with children has gone down while the risk for working age adults without children has gone up.

Percentage of working-age adults living in households with less than 60% of contemporary median household income, by family type, United Kingdom

Percentage of working-age adults 96/97 08/09
Poverty measured before Housing Costs:
Working-age adults without children 12 15
Working-age adults with children 20 18
Poverty measured after Housing Costs:
Working-age adults without children 17 19
Working-age adults with children 27 26

(Taken from table 5.7ts)

Even more worrying is the fact that, for adults without children, the risk of poverty has gone up a little for working families.

For those relying on part-time work – whether or not they have children –  the risk of poverty is now quite serious: the proportion in poverty has gone up from 6% to 9% for those without children, 8% for those with children. As we know that women over-represented among part-time workers this is a growth in working poverty that will mainly affect women.

The main story about the new figures is that the number of children in poverty is falling again, but they also indicate that poverty is an increasingly significant problem for families without children, including those in employment.