The experience of poverty in the UK is the struggle to make ends meet, the frustration and debilitation of dealing with inflexible and unsympathetic bureaucracies, employers, landlords and creditors, and, for many, the shame and alienation that can come with it. It can mean facing pernicious material choices that in today's Britain are unimaginable for most of us, such as whether to put adequate food on the table or to heat the home. It can mean lack of dignity, absence of control and immense time pressures without commensurate reward. Poverty is often compounded and reinforced by other aspects of disadvantage, including challenging neighbourhoods, absence of support and a lack of assets.
We believe that this is the context in which child poverty needs to be situated. Growing up in this kind of poverty has a profound impact on both childhood experience and life chances, at many different levels. For example, children from poor households have worse average educational outcomes and are much more likely to suffer from significant ill health, both in childhood and in adulthood. (1)
In an attempt to address the issue of children living in poverty, Labour pledged to eradicate child poverty in a generation, focusing on three main lines of attack: supporting family incomes (largely through child contingent measures); welfare to work policies; and a broader agenda aimed at improving children's life chances. This pledge was backed up by investment, energy and commitment, and initially substantial progress was made. There were 900,000 fewer children in poverty (i.e. living below 60 per cent of median income (2)) when Labour left office than in 1998-9; and there was good progress on a range of other indicators, in terms of parental employment, family incomes and child well-being. (3) A number of reviews of Labour's approach have concluded that where there was significant investment, positive gains were made, particularly in the early years of New Labour. (4)
Yet to acknowledge these successes should not mask the failings. Labour's goal of halving child poverty by 2010 was not met. And their goal of eradicating child poverty within a generation would require a sustained reduction over the next decade at a level that has not been seen since comparable records started being collected fifty years ago. At present, the Institute for Fiscal Studies predicts that by 2012-13 child poverty will begin to rise. (5)
The Conservatives and Liberal Democrats signed up to the agenda of eradicating child poverty during the last parliament and both supported the Child Poverty Bill just prior to the 2010 election, but there are significant differences in approach. The Conservative narrative focuses substantially on welfare dependency; their critique of Labour is that they concentrated on the wrong thing and exacerbated the problem. This view is coupled with the notion that the state simply can't deliver the kinds of social change which Labour hoped for. Here the 'big society' is central. Meanwhile Nick Clegg has expressed scepticism about efforts to increase family incomes - 'poverty plus a pound is not enough' - and has sought to define 'fairness' in terms of social mobility rather than income inequality: 'For old progressives, reducing snapshot income inequality is the ultimate goal. For new progressives, reducing the barriers to mobility is'. (6)
With current policy proposals likely to exacerbate poverty, we are seeing little sign of the kind of shift in direction that would be needed to meet the 2020 target. In addition, the conditions have changed substantially: we are no longer 'sharing the proceeds of growth' - instead we are in a period of unprecedented cuts, and arguing over the future of the welfare state. What's more, the poorest parts of our society have still not recovered from the dismantling of industrial communities and livelihoods of a generation ago.
The large rise in child poverty in the 1980s stemmed from the wider poverty caused by the profound changes of that period in economic organisation and the labour market, as well as from changes in the family. Yet over the past decade the policy agenda around child poverty became increasingly narrow. It remained at the margins of policy-making, as a separate agenda, unconnected to wider questions about the nature of our economy or society, and in particular the labour market. Moreover, the agenda on child poverty failed to resonate beyond narrow political and policy elites, never captivating a sense of mission among those it was aiming to support, or a wider public concerned with social justice and inequality.
Below we examine three areas where we believe the approach of any party serious about tackling poverty needs re-thinking. Firstly, as many have pointed out, poverty must be thought of in the context of inequality. Secondly, we need to think on the micro level about the way we work, and on the macro level about the type of work available. Thirdly, we need to think about how this debate is framed in a way that builds a sense of solidarity rather than reinforcing divisions between 'the poor' and 'the rest'.
Poverty in the context of inequality
When thinking about poverty, overall inequality levels matter, but debates about poverty have in the main taken high levels of inequality as a given. Indeed, for most of their period in office Labour refused to make inequality an explicit target of policy. As the National Equality Panel concluded, 'Britain is an unequal country, more so than many other industrialised countries and more so than it was a generation ago'. Both income and earnings inequality are high, with the ratio between the income of the top 10 per cent and that of the bottom 10 per cent being more than 4:1. Wealth inequality is higher still, with the ratio between the top and bottom 10 per cent being an astronomic rate of almost 100. (7)
However the story of inequality during the last decade is more complex than that of a simple continuous increase, particularly when looking at earnings. Earnings growth at the very top was rapid throughout the period, but, apart from this, growth appears to have been relatively even across the earnings distribution - without significantly higher growth at levels that are quite near the top (as opposed to at the very top) than at the bottom. (8) In the early period of the Labour government, the introduction of the minimum wage acted to strongly increase earnings growth in the bottom income groups, and there is some evidence that earnings inequality overall reduced in the last decade (at least between the bottom and middle of the earnings distribution). (9)
Moreover, the IFS have shown that levels of inequality growth (or reductions) were not even over Labour's period in office: income growth was 'mostly inequality reducing' during the first term, except for at the very top and bottom of the income distribution; it was 'unambiguously inequality reducing' during the second term, when the largest income growth was at the bottom, partly as a result of increases in government financial support; and then during their final term in office it was inequality increasing. (10)
Why does inequality matter for poverty? To say that what it means to be poor depends on the general standard of living within a certain society is a truism that dates back to Adam Smith, when he argued that necessaries are 'whatever the custom of the country renders it indecent for creditable people, even of the lowest order, to be without' (Wealth of Nations, Vol II). The standard measure of poverty is a relative one - households falling below 60 per cent of median income. Widening inequalities between median income and the incomes of the poorest therefore mean that anti-poverty measures have to work harder to achieve their goal.
It is possible, as the last decade has shown, to close the gap between the bottom and the middle, without seeing the incomes of those at the top change substantially. But there are several reasons to think that we should also care about the gap between the middle and the top when thinking about what a successful anti-poverty policy might look like.
Firstly, the perspective taken by those in the 'middle', and their willingness to support investment in improving the position of those with lower incomes than them, is likely to be significantly influenced by comparisons with those who earn more than they do. Louise Bamfield and Tim Horton have shown that most people view themselves as occupying the 'middle' group; even those on high incomes do not consider themselves 'well off', as their reference group includes only those with similar or higher incomes. (11) In other words, as long as there is a group of very high earners, the middle group will be more focused on increasing their own incomes than on thinking about how to alleviate the position of those surviving on less than them.
Secondly, income inequality and poverty often originate from the same source. We discuss below how in-work poverty has grown, and the role of low wages in contributing to this poverty (despite the evidence cited above showing that wages at the bottom have risen). Looking at the increase in pay at the top levels, it is hard to escape the conclusion that a different distribution of these profits might have helped tackle the low pay problem. Will Hutton's report on fair pay within the public sector points out that in the last decade executive pay has risen dramatically in both the private and public sectors:
In 2009 median pay for FTSE 100 chief executives has risen to 88 time UK median earning and 202 times the national minimum wage, up from 47 times and 124 times respectively in 2000. Pay ratios in the public sector have also increased over the last decade, with pay for top earners in most public sector workforces increasing faster than for bottom earners since 2001. (12)
It's possible to imagine a situation in which this income was being put to more effective use to combat poverty.
A third reason to be concerned about the income gap is the substantial evidence that high levels of inequality in any given society are associated with generally lower levels of happiness or well-being - and in themselves bring social and economic costs. This argument is best known from the work of Kate Pickett and Richard Wilkinson in The Spirit Level, which argues that differences in social status resulting from inequalities in income are the key mediating mechanism between inequality and many other poor outcomes, including teenage pregnancy and poor overall educational attainment - many of which may themselves lead to greater poverty. (13) Low levels of social mobility have also been shown to be linked to high levels of income inequality; (14) the further the gaps between the rungs of a ladder, the harder it is to ascend them. To cite the National Equality Panel once more: 'Wide inequalities erode the bonds of common citizenship and recognition of human dignity across economic divides'.
The way we work
A consideration of inequality draws attention both to the importance of the distribution of income from paid work, and to the role of government policy in altering this distribution. But in addition to worrying about how the financial rewards of work are shared out, we need to think about the way we work; the security, autonomy and work-life balance available to different groups of people.
Labour's time in office saw a significant increase in parental employment, particularly in the employment of lone parents. (15) This followed active labour market policies, an increase in the quantity of childcare available, and, most significantly, an increase in financial support to make work pay via the Working Families and then Working Tax Credits. Yet while the IFS have shown that the increase in the number of parents working helped reduce overall levels of child poverty, the proportion of families in work and yet in poverty also sharply increased. (16) Well over half of all poor children in the UK have a parent who is in paid work, and many families continue to experience a 'low pay no pay' cycle, characterised by temporary and insecure employment. (17)
Progress was also made by Labour in trying to ensure a better work-life balance for parents, with the introduction of the right to request flexible working for parents. But the government sent fairly mixed messages about what it considered the 'ideal' working pattern for families - other than a clear decision, backed up by benefit conditionality, that lone parents should be working at least part-time. While the DWP piloted a major programme to improve 'employment retention and advancement' for lone parents, with the idea that parents would progress from 'poor' jobs at the time of work entry to better jobs in the future, this succeeded in raising wages in large part by encouraging parents to work more hours - something that many were reluctant to do.
Other than the significant intervention of the National Minimum Wage, which, as discussed, contributed to a faster rise for those at the bottom of the income distribution than for those in the middle, Labour's labour market interventions predominantly saw government expenditure doing the work of adding to the incomes of the poorest families. The 'heavy lifting' that tax credits are required to do to lift families out of poverty has increased hugely over the past fifteen years. (18) While there have been a number of projections that an increase in skilled jobs will lift wages and working conditions for many in the future, even the most optimistic scenarios suggest that a substantial proportion of jobs will remain low paid. Recent modelling suggested that the projected increase in skilled jobs by 2020 could at best reduce child poverty by two percentage points. (19)
What are the implications of this? Labour repeatedly asserted that 'work is the best route out of poverty', but it is clearly no longer a stable path. Moreover, assumptions that work will lift families out of poverty are often based on the idea that all adults in that family will be working full-time. Labour's child poverty strategic directions paper published in March 2010 followed this route. (20) It made a number of assumptions about increased parental employment being capable of reducing the numbers of children living in poverty, and put forward models based both on increases in the lone parent employment rate, and on increases in the amount of hours worked by 'second earners' in couples. These assumptions are often at odds with more implicitly held views about appropriate gender roles. Thus the Coalition government are currently sending extremely mixed messages in this area; they are reducing incentives for second earners (usually women) to work through the structure of the Universal Credit whilst at the same time asking both members of a couple who are claiming the Credit to actively seek work. Families often seem to be being asked to trade income poverty for time poverty. (21)
Thinking about the quality of work raises questions about who is responsible for tackling poverty, and the relative burden to be borne by government and employers. The dire warnings that the introduction of the Minimum Wage would cost jobs were misplaced, which shows that government have at times been successful in asking businesses to play a greater part, but policies that tackled the 'supply side' of the labour market - rather than relying on incentives for parents to enter work - were largely absent from Labour's child poverty strategy. The next section looks further at what a greater focus on employers might look like.
How the economy develops matters
As has been widely discussed, the recession called into question New Labour's underlying economic and social model. The strategy of redistribution based on sharing the proceeds of growth driven by financial services, consumer spending and debt hit the wall.
As Tony Dolphin has argued, until the financial crisis, spending was at relatively sustainable levels. (22) The deficit has its roots in economic and regulatory policy rather than social policy. However, even if the recession had not arrived, it would still be necessary to ask whether the approach of New Labour to wealth creation helped or hindered the goals of tackling poverty. Questions about the type of economy we lived and worked in seemed unaskable when times appeared good; now that we're searching to re-gear our economy, there is perhaps a greater readiness to reflect on these issues.
The great rise in child poverty in the 1980s was the consequence of substantial economic change that left many groups and places without an obvious way to earn a living. This meant that under New Labour, while the economy generated significant resources for investment in public services and redistribution by stealth (albeit not sustainably), the continued economic divisions within the UK by place (both at the regional and sub-regional level) and by type of work (in terms both of sector and grade) made the work of poverty reduction much harder.
The example of London makes it clear that overall wealth is not the only thing that matters. Eight out of the ten areas in the country with the highest levels of child poverty are London boroughs; (23) yet London has been a city rich in economic opportunities over the past decade. Many other places, however, lack the wealth in the first place. Some of the challenges of Hackney and Hull are similar, yet the fact that one sits in the shadow of the City of London and the West End, while the other sits in the shadow of the dockyards, highlights the discrepancy in fundamental economic opportunity across places.
Economic polarities around place and type of work reflect the operation of the market, but within a policy context which shapes it. The presence of so much low-wage work in London is in part a product of economic choices. A major recent comparative study of low-wage work in wealthy economies highlights how a commitment to better job quality for all can drive improved productivity and better conditions, as an alternative to the current race to the bottom of temporary and low-skill labour. (24) Similarly, whilst some Northern English cities have fared relatively well from the agglomeration of creative and retail sectors and the urban renaissance agenda of the past decade, overall the north has continued to suffer at the expense of the south. (25)
If poverty is seen as a question of access to livelihoods, and work as the best route out of poverty, there must be more focus on this dimension of poverty alleviation. But Labour's focus was never on the task of creating livelihoods for all, and this made the long-term goal of sustainable poverty reduction much harder. In the past decade, links between economic growth strategies and those to tackle poverty seem only to have been made through the general belief that a successful economy would pay for policies to tackle poverty.
This matters economically. We're wasting potential by not investing sufficiently in low-resource areas or low-skilled people, and being satisfied with an economy that can get by on easily churning low-skilled work, and is skewed to one main sector. It also matters socially. It's clearly corrosive to a sense of social solidarity for some to perceive that others are not taking their share of the burden. And it also matters morally. The concept of 'full employment', that all should have the right to work, was for a long time at the centre of our national political debate. That discourse has evolved into one that instead demonises welfare claimants - as if the problem is that people don't want a livelihood to support themselves and their family, rather than a lack of decent employment opportunities. Campaigners and politicians need to become much more interested in how policy is shaping these fundamental economic opportunities.
Framing the fight for social justice
The language that defines the fight against poverty is important. Few people were aware of Labour's child poverty reduction goal, and indeed public attitudes to poverty hardened under New Labour. (26) These changes were not solely caused by government actions, yet they surely played a role in fermenting them. The Labour administration's high profile benefit fraud campaign, and constant focus on the need for 'welfare reform', were fundamentally aimed at pushing the same buttons as the current Coalition's series of misleading statistics about benefit 'fraud' and worklessness. Some research into ways of improving public awareness of poverty issues indicates that it is important to focus on highlighting solutions, demonstrating that change is possible; and to communicate through real life stories, which are powerful in engaging the public but are severely under-represented in media coverage. Others have suggested the greater use of a human rights framework, and a focus on the economic and social costs of poverty to society. It has also been argued that a focus on poverty more broadly - rather the euphemistic 'child poverty', as if the parents are doing just fine - would make for a stronger coalition and a more coherent narrative.
There may be some merit in all these suggestions, but there is an inherent problem in all of them, in that the focus on poverty suggests - to sympathetic and unsympathetic alike - that the challenges faced by those living in poverty are very different from those faced by others (including those who are living in poverty but are highly disinclined to accept that label). This is unhelpful in fostering any notion of solidarity or shared fate, and nor is it a reflection of what the evidence tells us. Research consistently shows that poverty is dynamic: few are poor permanently; and many experience recurrent poverty, reflecting the fluctuations and complications of employment and family life in the bottom half of the income distribution. The most recent Joseph Rowntree Foundation research shows that chronic poverty only affects 10 per cent of the poor population, and 3 per cent of the population as a whole. Yet poverty at some point affects the lives of ten times more people than that. We have known this for a while, yet we have found it hard to adapt our language or policy to accommodate this reality. The static view of poverty seems easier to conceptualise and articulate.
The way this agenda is framed in political discourse matters considerably. Labour ministers often spoke of the need for more political space to act on child poverty; they felt that they lacked the critical mass of demonstrable public backing for an anti-poverty agenda. Moreover, many may now feel that the steps that were taken went largely unrecognised. The widespread desertion of working-class voters from Labour at the last general election reflected many factors, but one must surely be the lack of connection between a core part of Labour's discourse around social justice and the lives of voters.
This agenda also matters because if poverty makes people feel alienated, a belief that politicians do not think the issue is important will compound that alienation. Diminishing voter turnout at general elections may be indicative of a mounting problem. According to Ipsos Mori, the gap in turnout between social classes AB and DE has been progressively widening at each recent election, and in 2010 stood at 19 per cent.
Discourse also matters because it continually shapes the policy response. The more that child poverty is characterised as an issue of welfare reform, the more welfare reform is seen as the paramount solution. Unlike 'the welfare state', which retains some positive connotations of collective social support, 'welfare' on its own is now used in the American pejorative sense of residualised support given as last resort. And the operation of more punitive and residualised welfare policies on the ground in turn helps to open up social distance between 'the poor' and 'the rest'. We rarely talk about 'social security' any more, though these ideas should be at the core of the financial aspect the welfare state. The recent political trend for discussing 'social mobility' instead of poverty itself lays the groundwork for a new agenda that shifts the debate still further in the wrong direction. Prioritising the 'meritocratic ideal' and a narrow conception of desert allows policy-makers to avoid the big questions about unequal life chances, structural barriers and the fact that our society rewards different lives so unevenly - and to focus instead on pursuing policies to open up mobility routes for very small numbers.
We draw four broad conclusions. Firstly that anti-poverty policy has to be about the initial distribution, more than just the redistribution of income - that is, labour market opportunities are as important as fiscal policies aimed at compensating for their absence; secondly, that greater equality in the labour market is not a simple question of the right or opportunity to work more hours, or even of better pay - it is a also question of the security, autonomy and flexibility that better paid work typically offers; thirdly, that ending child poverty needs an approach and language which describes and attempts to overcome barriers shared by many, rather than taking the form of a moral crusade with which few identify; and, fourthly, that the strategy needs to remain focused on the longer term rather than quick wins.
The Coalition government is currently proposing a strategy based on taking the debate further away from the structural causes of poverty and inequality, to focus on questions of personal agency and responsibility, with a heavy focus on individualistic explanations for why people are poor. This threatens to stigmatise 'the poor' still further. Any critique of this approach needs to start with an alternative view of what can be done at a political and policy level to address the bigger issues. The urgency of tackling poverty requires us to find new answers - or perhaps to revive those of the past.
We would like to thank Dalia Ben-Galim, Mike Brewer, Graeme Cooke, Lisa Harker, Tina Haux, Ruth Lister, Tom MacInnes, and Jonathan Rutherford, as well as participants at a Westminster Seminar organised by The New Political Economy Network, for comments on earlier drafts of this piece. We are grateful to the Webb Memorial Trust for supporting an ongoing piece of work which has contributed to this essay.
(1.) Significant evidence on this is set out in Frank Field's review of the early years for the coalition government, The Foundation Years: preventing poor children becoming poor adults, HM Government 2010.
(2.) As measured before housing costs - although there are good reasons to focus on the figures after housing costs.
(3.) John Hills, Tom Sefton and Kitty Stewart (eds), Towards a more equal society? Poverty, Inequality and Policy since 1997, Policy Press 2009.
(4.) See Towards an Equal Society (note 3); and Jane Waldfogel, Britain's War on Poverty, Russell Sage Foundation 2010.
(5.) Mike Brewer and Robert Joyce, Child and working age poverty to 2013-14, Institute for Fiscal Studies 2010.
(6.) Guardian, 9.11.10; and Nick Clegg's Hugo Young Lecture 2010, Guardian, 23.11.10.)
(7.) Quotation and statistics from National Equality Panel, An Anatomy of Economic Equality in the UK - Summary, Government Equalities Office 2010.
(8.) Abigail Self and Linda Zealey (eds), Social Trends 37, Office for National Statistics 2007.
(9.) An anatomy of economic inequality in the UK.
(10.) Robert Joyce, Alastair Muriel, David Phillips and Luke Sibieta, Poverty and Inequality in the UK 2010, Institute for Fiscal Studies.
(13.) Richard Wilkinson and Kate Pickett, The spirit level: why more equal societies almost always do better, Penguin 2009.
(14.) See http://www.ifs.org.uk/publications/5261.
(15.) Office for National Statistics: Work and worklessness among households: Statistical Bulletin - September 2010: www.statistics.gov.uk/statbase/product.asp?vlnk=8552.
(16.) Mike Brewer, James Browne, Robert Joyce and Luke Sibieta, Child poverty in the UK since 1998-99: lessons from the last decade, Institute for Fiscal Studies 2010.
(17.) Anushree Parekh, Tom MacInnes and Peter Kenway, Monitoring poverty and social exclusion 2010, Joseph Rowntree Foundation 2010.
(18.) Monitoring poverty and social exclusion 2010.
(19.) Andy Dickerson and Jo Linley, Parental qualifications and child poverty in 2020, Joseph Rowntree Foundation 2008.
(20.) HM Treasury, Department for Children Schools and Families, and Department for Work and Pensions, Ending child poverty: mapping the route to 2020, HM Government 2010.
(21.) See Mike Brewer, James Browne and Wenchao (Michelle) Jin, Universal credit: a preliminary analysis, Institute for Fiscal Studies 2011; Tania Burchardt, Time and income poverty, Joseph Rowntree Foundation 2008.
(22.) Tony Dolphin, Debts and deficits: how much is Labour to blame?, IPPR 2011.
(23.) HMRC, Child poverty rates by Local Authority, 2010.
(24.) J. Gautie and J. Schmidt, Low Wage Work in the Wealthy World, Russell Sage 2010.
(25.) A. Power, J. Ploger and A. Winkler, Phoenix Cities: the fall and rise of great industrial cities, Policy Press 2010; N. Lee, The Geography of the recovery: no city left behind, Work Foundation 2010.
(26.) See Tom Sefton in Towards an Equal Society (note3); and Michael Kelly,
Public Attitudes to Child Poverty, DWP 2009.…